How much is a month of life worth to you?

This is a question no one should have to ask herself, but cancer patients often must – for instance, in the United States, where 16 percent of patients are uninsured and drug costs are ballooning. Breast cancer treatment with Genentech’s drug Herceptin, for example, can cost $70,000.

Patients aren’t the only ones – governments now find themselves making difficult decisions about whether or not to pay for treatments that cost tens of thousands of dollars, but add perhaps just a few months to a patient’s life. In 2005, for instance, the United Kingdom’s National Health Service decided to pay for treatment with Herceptin as an add-on to breast cancer chemotherapy, after patients battled for years for access to the drug. But clinicians there warned that the high cost of Herceptin treatment would force cutbacks elsewhere in the health care system.

Do cancer treatments cost too much?

Today, Alexander Capron, a medical ethicist at the University of Southern California, pointed out that biotechnology companies price their treatments not just based on how much it costs to make the drugs – companies also set prices based on the value of added life to patients. So for instance, Genentech decided to price its drug Avastin for breast and lung cancer patients at about $100,000, even though it only extends life by a few months, and even the company charges half that when Avastin is used to treat colon cancer. “Should a lifeguard charge someone a million dollars just for throwing him a life buoy?” Capron asked.

Most of us would say no. So perhaps cancer drug prices are too high.

But Susan Desmond-Hellman – Genentech’s vice president for product development – countered that it’s not so simple. Biotechnology companies on the whole don’t make large profits, because the business is extremely risky and unpredictable, and therefore companies need incentives to discover new drugs, she said.

Translation: We fail so often, we’ve got to be able to capitalize on our few successes. Or else everyone will suffer, because companies will bail from the drug development business.

So, Genentech’s answer to the question would be no – cancer drugs aren’t too expensive, because really high drug costs are actually beneficial for patients.

But, one patient advocate said, this arrangement isn’t so tidy.

Deborah Collyar, who leads patient advocacy groups for National Cancer Institute-funded centers, said that Genentech is actually endangering patient support by setting what seem like outlandish prices. “Avastin has created a dilemma for us in the advocacy world,” she said, diplomatically, explaining that is makes it difficult for patient advocates to push for more cancer research funding when the resulting treatments are so expensive that many patients can’t afford them.

So, yes, biotech companies can charge whatever they like for medicines, but it’s not necessarily in their best interest to do so. But they don’t seem to have figured this out yet.