Articles in several sources reported on a study in the Journal of the National Cancer Institute (WSJ article) which examined the benefits of some expensive cancer drugs. The study found that Erbitux, for example, which costs $80,000 for an 18-week course of treatment, extended survival for about 1.2 months. Other very expensive drugs had similar limited benefits. The authors’ perspective was that the country really needs to think about whether these drugs are worth the cost. One of the issues with many of these new drugs is that they tend to work very well for some people but make little or no difference for many. We do not yet have reliable biomarkers to help physicians determine in advance who is most likely to benefit. It is a hard choice to deny coverage across the board when a product may in fact help even a few patients be cured or have extended survival. Refusing any coverage would also likely mean that fewer drugs would be developed, which is not good for improving health care quality. It also would lead to concerns about a two-tiered health system, because wealthy people would be able to afford the drugs in any event. But that is an interesting problem in itself, because it is hard to justify denying care to people who can afford it just because others can’t. These drugs do represent one of the fundamental dilemmas for our system. When pricing is basically in the hands of the manufacturer and physicians are unconstrained in their ordering practices, we end up paying very high prices for many new products. That problem is being exacerbated by the costs associated with personalized medicine and exotic biotech drugs. It will get much worse in the coming years. It will be important to any cost control efforts to figure out how to either bring the costs down or limit the number of people who are given these products.