Fighting Cancer Now a Matter of Money - When is a Profit Enough?

Those suffering from breast or lung cancer have something new to anguish over. In addition to dealing with chemotherapy, weakness and mortality, they now must worry if they have the resources necessary to pay for extremely expensive medicine. Not the $50,000 price tag associated with current therapies, but $100,000-for just one year's treatment.

That is what many cancer patients will have to pay for a course of Genentech's Avastin, a drug shown in clinical trials to extend the lives of late-stage breast and lung cancer patients by several months when combined with existing therapies.

Avastin is currently used to treat colon cancer, at a price of about $50,000 a year. But since it will be used at higher doses for lung and breast cancer the cost will double, to about $8,800 a month. Even though the additional cost of producing a higher dose is minimal, Genentech does not plan to reduce the unit price.

With a price this high, some cancer patients will be priced out of the treatment; namely, those without insurance and those with high deductibles. But even some patients with insurance are thinking hard before agreeing to treatment, as out-of-pocket co-payments for Avastin could easily run $10,000 to $20,000 a year.

Genentech is currently seeking FDA approval to sell the drug specifically for the treatment of breast and lung cancer. Until the FDA gives the okay to sell Avastin as treatment for these diseases, insurance companies will not pay for it and patients must sign a waiver agreeing to reimburse the hospital for the price of treatment.

Avastin went on sale during the first quarter of 2004 and had 2005 sales of $1.1 billion. With this new application it has a potential patient pool of hundreds of thousands of people, meaning its United States sales could grow nearly sevenfold-$7 billion by 2009. Genentech's profits are forecast to triple to $4 billion in 2009, as sales climb to $18 billion.

Herein lays the moral-ethical question: When is a profit enough?

In the past, drug manufacturers said high drug prices were necessary to recoup the large research and development costs associated with new drug development. For every successful drug that comes to market, dozens of other drugs in development could not be sold, for a variety of reasons: the drug did not perform as anticipated or perhaps could not gain FDA approval.

Genentech's reasoning for the high cost of an Avastin treatment for lung or breast cancer is decidedly different. The company and its majority owner, Roche, say the inherent value of life-sustaining therapies is the justification for a high price. With 2005 sales of more than $6 billion, pure profit also seems to be a motivator for the South San Francisco, CA-based firm.

"As we look at Avastin pricing, right now the health economics hold up, and therefore I don't see any reason to be touching them," said William M. Burns, the chief executive of Roche's pharmaceutical division and a member of Genentech's board.

Genentech's president of product development, Dr. Susan Desmond-Hellmann, said that Genentech set Avastin's price based on "the value of innovation, and the value of new therapies." To assist those who cannot afford treatment, Genentech has patient programs and last year contributed $21 million to charities that help patients with their insurance co-payments, she said.

Because of Genentech's status as a leading developer of cancer therapies, some doctors fear that the company's pricing plans for Avastin may encourage other companies to charge more for their own oncology drugs. If this happens, the overall costs of cancer treatments may rise to unsustainable levels.

Many medical professionals are opposed to the ever-rising costs of pharmaceuticals, but few are willing to discuss it. Efforts were made to reach local medical professional for comments. No pharmaceutical sales representatives were able to comment, as all major drug companies require employees to sign strict non-disclosure agreements. Pharmacists at chain pharmacies such as CVS and Walgreens are also not permitted to comment either on or off the record, and pharmacists at the local independent pharmacies contacted were hesitant to comment.

Robyn Gleason, MSN, MPH, ARNP, PhD(c) and Bethune-Cookman Nursing professor, was willing to comment. "They'll charge what the market will bear," she said in an interview. "I don't think the drug companies are justified in charging $100,000 a year for cancer treatment. But look at the cost of HIV drugs. It's no different."

"I'm sure it cost them a lot to develop this drug. But I'm not so sure it costs them enough to justify the $100,000 price," she added.

So why do drugs cost so much? Is it because of the huge R&D costs, or something else? A report by the U.S. consumer group Families USA refutes the long-standing pharmaceutical industry's claim that high prices are needed to sustain research and development-an argument not only advanced by industry, but by major industrial countries, the World Trade Organization, and even parts of the World Health Organization.

The report, "Off the Charts: Pay, Profits and Spending by Drug Companies," documents that drug companies spend more than twice as much on marketing, advertising, and administration than they do on R&D. It also purports that company profits, which are higher than those of all other industries, far exceed R&D expenditures, and that drug companies provide lavish compensation packages for their top executives. These expenses have to be recouped, and as of late the method for that has been to charge more and more for drugs.

An outspoken critic of exorbitant prices is Dr. Marcia Angell, author of the book The Truth About Drug Companies: How They Deceive Us and What to Do About It. In her book Dr. Angell argues against the pharmaceutical industry's reputation as an "engine of innovation." According to Dr. Angell's research, the top U.S. drug makers spend 2.5 times as much on marketing and administration as they do on research.

She also found that a third of the drugs marketed by industry leaders were discovered by universities or small biotech companies and sold to the public at inflated prices. She cites cancer drug Taxol, which was discovered by the National Institutes of Health and then sold by Bristol-Myers Squibb at a treatment cost of $20,000 a year-20 times the manufacturing cost. Interestingly, Bristol-Myers Squibb pays the NIH only 0.5% in royalties.

The real test of legitimacy for extremely high prices is, how much profit are pharmaceutical companies making?

A PricewaterhouseCoopers study cataloged the profit per dollar of the largest, economy-driving industries. In the third quarter of 2005 the overall average was 18.5 cents of profit for every dollar of sales. The oil and gas industry earned 8.2 cents; banking, 18 cents; transportation a paltry 0.2 cents; and software, 9 cents. The pharmaceutical industry, however, earned 18.5 cents of profit for every dollar of sales-the highest of any industry.

Angell reports in her book that the top ten pharmaceutical companies make more in profits than the rest of the Fortune 500 companies combined. For many, this is evidence enough that too much is being charged for drugs.

Mandy Minor is the marketing director for St. Petersburg web design firm J Allan Studios.

Truck Insurance and a License: No Longer Enough Regulation for Small Motor Carriers?

Having a good-standing license and appropriate commercial truck insurance used to be enough for shippers to contract motor carriers, but new information made public by the Federal Motor Carrier Safety Administration, (FMCSA), is causing many small trucking companies to worry that an already-stifled economy could get even worse.

Thanks to the FMCSA's new CSA 2010 program, information regarding company accident history, driver fitness, equipment upkeep and several other safety-related categories is now available to shippers and other freight companies alike by simply logging into the FMSCA website and viewing a comprehensive score.

What is CSA 2010?

CSA 2010, which stands for "compliance, safety and accountability," is a system proposed by the FMCSA in December of 2010 to publish a safety score for motor carriers and independent truckers to prospective employers, as well as their competition.

According to the FMCSA, an agency formed in January of 2000 that regulates the national trucking industry, the goal of CSA 2010 is to increase safety standards and reduce accidents that occur during commercial transit.

Arguments against CSA 2010

Several trucking associations that represent over 2,700 small trucking companies are challenging the FMCSA on the grounds that current CSA 2010 standards produce overall safety scores that may not be accurate. They're worried the scores will cost motor carriers jobs unfairly by increasing false conclusions based on speculation.

Trucking company spokesmen have gone on record expressing concerns for the methods by which safety scores are calculated, stating that accidents caused by other drivers will sky-rocket the scores of smaller companies, costing them jobs because motor carriers will be making false assumptions from the CSA 2010 data.

The scoring system is set on a scale of 1-100, 100 being the worst, that's derived from several categories including several possibly subjective categories such as "Unsafe driving, fatigued driving, driver fitness, controlled substance abuse, vehicle maintenance, cargo-related accidents and an overall crash indicator."

Effect on Independent Truckers

The Owner Operator Independent Driver Association, (OOIDA), has expressed concerns about the system on record as well, claiming the standards for arriving at scores is weighted against independent drivers by counting 3 years of violations and infractions as opposed to the 2 required for motor carriers.

Furthermore, the organization expresses concerns about counting all infractions including warning tickets as opposed to just convictions.

Some speculate the commercial truck insurance industry might unfairly spike rates based on the public information as well.

Official Stance and Current State of CSA 2010

According to the FMCSA official website, the initiative is meant to "improve large truck and bus safety and ultimately reduce crashes, injuries, and fatalities that are related to commercial motor vehicles." They further contend CSA 2010 "establishes a new nationwide system for making the roads safer for motor carriers and the public alike!!"

As of January 4th, 2010, CSA 2010 information is currently public and available to view on the FMCSA official site.

Patrick Winchester is a freelance writer who tells it like it is. He can also save you rates while upping your commercial truck insurance coverage. Don't buy it? Visit http://www.royaltytruckinsurance.com to find out how.

Is Disability Insurance a Mature Enough Industry That You Need to Trust in Its Ability to Assist?

Disability insurance, in case you look at it, need to figure on our list of issues to do, just like a lot as medical care insurance does, shouldn't it? About one in five Americans experiences some form of injury each and every year that keeps them from working for a period of time. Depending on who is advertising, it is possible to get to hear figures anywhere between 30% and 80%, as an estimation of your personal chances of being struck by some form of disability in your lifetime. Disability insurance exists, to produce up for whatever shortfall in salary you experience, whenever you can't function. And all of this, is when most of all Americans get by with no disability insurance of their own. They can count themselves lucky if their employer occurs to cover them, but which is all. Most individuals who cover themselves paying premiums out-of-pocket, never can afford enough.

The disability insurance industry, can consider of no far better method to respond to all of this, than by inflicting grisly advertisements on us, that make them sound like vultures circling inside sky. They put out statistics that go, 'Every second in America, there's a new disability that occurs". They get that figure from the National Safety Council that has sort of a broad definition for disability injury. If you ever get anything that keeps you away from any everyday activity for a lot more than one day, they call that a disability injury. For instance, in the event you feel you cannot go to the movies one night, due to the fact you were roughhousing with your kids, and got punched inside nose, that counts being a disability injury. Lots of persons look at to put in fake claims to obtain their hands on some undeserved disability payouts as well, to generate points worse. For whatever reason, doctors seem to acquire a great deal of disability insurance for themselves as well, and they claim on them generally. If most of our estimates of how likely we are to need to have disability insurance comes from those who take these into account, how do we actually know just how much we require it?

There's not a whole whole lot of independent info on the subject. There was a book known as How to Insure Your Income, released a lot more than 10 years ago, that gave you statistics that weren't all that various. The site of the Council for Disability Awareness has an on the internet quiz, that says that if you've an office job, you just have a 10% chance of getting that unlucky. So just how much is enough? About one in three workers inside the country has some form of coverage that their employers pay the premiums on. Everybody has Social Security, but you don't get far more than a couple thousand dollars a month, and it's extremely, quite hard to qualify. If you're counting on worker's compensation, they'll only care if you're truly injured whilst at your post. Private disability insurance, even if you ever do purchase it, could be challenging to claim on. They have all kinds of exclusions to look at to disqualify you. They'll test to tell you, "Oh! so you cannot work as a lathe turner anymore? We cannot pay you, unless you attempt (and fail) at finding do the job as being a holiday gift wrapper at the mall". Seeing as how complicated it's to come by correct coverage, perhaps it's just very best to let items take care of themselves.

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Is Your Hotel Franchisor's Reservation System Producing Enough Reservations?

As every hotel franchise owner knows, revenues are generated by putting "heads" in the "beds." Integral to this industry fact, is how effective a hotel franchisor's reservation system is in putting heads in its franchisee's beds. When a hotel franchisee purchases a franchise, he or she expects that the franchisor will play a substantial role in providing a reservation system that will produce enough reservations to maintain a steady flow of reservations to the hotel.

In many instances, however, franchisees find themselves struggling to maintain the viability of their franchises due to the lack of reservations coming into their hotel through their franchisor's reservation systems. Bottom lines are being affected across the country because hotel franchisor's reservation systems are failing to deliver a reasonable and sufficient number of reservations to franchisees' hotels. Coupled with the substantial fees franchisees are forced to pay to their franchisors each month for the use of the franchisor's reservation system, many franchisees are beginning to question whether a reservation system without reservations is worth the money. After all, a franchisee pays substantial fees each month to the franchisor for the use and benefit of the franchisor's reservation system. In exchange, the franchisee expects that his or her hotel will receive reservations - enough to sustain a profitable and viable hotel entity.

More and more, especially in the wake of the economic woes suffered by many in the hotel industry after 9/11, franchisees are raising the issue of the effectiveness of their franchisor's reservation system. Franchisees' disappointment over their franchisors' reservation systems has led to increased litigation over the issue of whether a hotel franchisor has an obligation to provide much more than simply a reservation system. In other words, a reservation system should deliver reservations - not simply claim to deliver reservations.

There are clearly advantages to affiliating oneself with a franchisor's national hotel brand - not the least of which is the name recognition that will inevitably help in bringing customers to your hotel. Yet, this does not assure you that you will receive a sufficient number of hotel reservations through your franchisor's reservation system to generate a steady stream of business. In other words, you may be forced to undertake your own costly marketing and reservation support to remain profitable.

If you are a potential hotel franchisee or an existing one, make sure you thoroughly investigate your franchisor's reservation system and determine whether your franchisor is undertaking enough efforts to maximize the number of reservations your hotel should be receiving through its reservation system. In addition, be sure to review your franchise agreement with an experienced franchise attorney to understand exactly what obligations your franchisor has to deliver reservations to your hotel through the reservation system and what you can do to adequately protect yourself against empty reservation systems.

Bradley J. Hansen, Esq., is an attorney in the Northern Virginia law firm of Hughes & Associates, P.L.L.C. Mr. Hansen?s practice focuses on franchise, construction and complex civil litigation. Brad can be reached at brad@hughesnassociates.com or by calling him at 703-671-8200.

This article is not intended to provide legal advice, but to raise issues bearing on legal matters. You should consult with an attorney regarding your legal issues, as the advice you may receive will depend upon your facts and the laws of your jurisdiction.