The True Cost of Herceptin

If you’ve been reading this blog recently, you know that I am very concerned about the high cost of cancer drugs. I get two of the most expensive, Herceptin and Avastin, every three weeks, and as a result of the cost of these drugs I am going to max out my health insurance coverage before the end of the year.

This morning, I had a very cordial conversation with a spokeswoman for the company that makes both drugs, San Francisco-based Genentech Inc., (Ge-NEN-tech, please. It turns out I’ve been pronouncing the name wrong all these years. Who knew?).

I’ve been bugged by press reports, in USA Today and elsewhere, that say Herceptin, a targeted antibody used to treat breast cancer, costs $3,000 a month.

That’s not what I pay. (Or not what my insurance company pays, anyway.)

Herceptin costs my insurance company $78,812 a year.

Why? The short answer is, it’s all in the markup, both by distributors who sell to cancer centers, and then a further markup by the cancer centers themselves.

How about some legislation to limit how much cancer centers and distributors can mark up these drugs? I don’t think Genentech is the bad guy here.

What’s the Deal?
For those of you who like math, follow on.

The Genentech spokeswoman, who didn’t want her name used because she is going out of town for two weeks and won’t be available to answer questions from others, told me that the company’s price for a 440 mg. vial of Herceptin is $2,400, or about $3,100 a month.

That’s the price that is usually quoted in the press, but no cancer patient actually pays that, so it’s misleading. It is, essentially, the wholesale price.

And let’s ignore the monthly figure, because it’s confusing. Some women get Herceptin once every three weeks, some get it every week, depending on what their doctors think is best.

I get 411 mg. of Herceptin once every three weeks. So that’s a little less than one 440 mg. vial.

But my dose doesn’t cost 93 percent of $2,400, which would be $2,232.

Until recently, I got my care at the Seattle Cancer Care Alliance, which charged me $6,254.95 for one dose of Herceptin. In November, I began going to the Swedish Cancer Institute for my care, and Swedish charges me $9,599.10 for one dose of the same drug.

My insurance company, WSHIP doesn’t pay that amount, but it still pays $4,635-and-change for each dose of Herceptin.

More math: Fifty-two weeks in a year. One dose every three weeks means 17 doses a year, and the total is $78,812 for one year’s worth of this life-saving drug.

So back up to the price per dose--who gets the $2,403 that is the difference between what Genentech charges for that one dose and what my insurance company pays?

This more than 50 percent markup goes to the distributor and the cancer center. I don’t know yet what the split is, but let’s assume it’s 50/50.

My cancer center also charges me about $2,000 to deliver my drugs each time I go in for this out-patient treatment. (My bill from Swedish shows nine separate line items labeled simply “hospital” and two more labeled “treatment room.” SCCA charged about the same.)

Then there’s the mark up on the other two drugs I receive, and the cancer center is being paid something like $5,000 for its services each time I receive treatment.

Seems a bit excessive to me.

@ Jeanne Sather 2007.

Comments

[Dee]

Jeanne,
I've just found this site and I love it. My doctor is strongly suggesting Herceptin and I was looking for costs. Thank you for a site that offers some humor, sensitivity and perspective.

Dee

[Bish]

Hi Jeanne,

I am from Kolkata,India, and my mother underwent a mastectomy in Mar-2005 followed by Chemo & Radio Therapy.

Just stumbled upon your blog and thought of that if you could share all the best-pratices & management ( especially post treatment) guidelines so that I can benefit from them.

You can reply me back to my email id.

~Thanks in Anticipation

[Bish]

Hi Jeane,

Sorry I forgot to mention my email : ranjita.joone@yahoo.co.in

~Thanks

[jeanne]

Hi Bish--sorry, but this is not something that I am qualified to do. Sorry. Jeanne