Funding a new drug: A Devil’s Advocate, back-of-the-envelope approach

The Guardian headline reads: “New heart treatment is biggest breakthrough since statins” and the article goes on to claim that “cancer deaths were also halved”.

Sounds impressive. So how should we decide whether to fund this drug?

The New England Journal of Medicine published the findings of a randomised controlled trial into this new treatment just two days ago.

The study was well constructed, with an impressive sounding 10,061 participants. All participants had previously had a heart attack and had high levels of one marker for inflammation.

The study counted whether participants had another heart attack, stroke, or died during the follow-up period of approximately 4 years.

During that time 16% of people taking the placebo suffered one of the primary outcomes (535/3344) compared with 14% (320/2284) in the best-performing treatment group (the group that took a medium dose).

Basically, if I was a random member of the study population taking the placebo, I would have had a 16% chance of having another heart attack, stroke or dying in that 4 year period. Crudely, this is a risk of about 4% per annum.

If I’d been taking the study drug, I’d have had a 3.5% risk per annum.

So what does a reduction of 0.5% mean? It means (very roughly) that to prevent one additional heart attack, stroke, or death, we need to treat 200 people for one year.

Now, I have no idea what price this drug will be sold for, but new drugs of this kind often command prices of $10,000 per year, or more.

That’s $2 million dollars.

And there was no reduction in ‘all cause mortality’ in the treatment group.

That means that the ‘halving of cancer deaths’ was balanced out by increases in deaths from other causes, such as serious infections.

That’s $2 million dollars without saving a life.

So, what else can we buy for $2 million? What is the opportunity cost of funding this drug?

Well $2 million is a lot of dietician appointments, a lot of personal trainers, a lot of quit smoking programmes, a lot of health insurance, a lot of income protection insurance, a lot of cardiologists.

Basically that’s a lot of prevention and resilience against future problems that could benefit all 200 of those patients, not just the one who would go on to have the extra heart attack.

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Author: Adapt Research

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