Posts Tagged big pharma
New drugs need to be compared to something. And, at a very minimum that something is the placebo, a sugar pill. When you see an advertisement claiming some product is 80% better, a reasonable person would ask, “better than what?”
A comparison group is hugely important in all of science. One of the biggest flaws in all research is not picking an appropriate control or comparison which makes the research worthless.
Erik Vance of the Washington Post reported on 12/2/16: “People susceptible to the placebo effect may be keeping us from getting new drugs.” The idea is many drugs can’t be proven to be better than a placebo. The FDA prevents those poor drug companies from marketing those drugs and making tons of money.
So here is the anti-scientific conclusion Mr. Vance reported: only use people that are unaffected by placebos in the control group. Sadly, that would exclude most conscious human beings. The control group would be strange people that could feel the tiny effects of the drug and ignore any psychological impact of taking a pill. And, voilà drug approved. A drug that most people would find no better than eating a sugar cube could be marketed at $800 per pill. And, advertisements could fool most practicing physicians into prescribing it.
This idea is totally nuts. The FDA would be within its authority to only allow the drug to be prescribed to that small group of strange people, not the whole world. Assuming the FDA was reasonably competent the idea and the huge profits should go down the drain.
Do you want to take a medicine that fails to work as well as a sugar pill? Probably not. Expect good science. Demand honest comparison with placebos.
Mylan is the company that makes EpiPen(R). It was one of those “inversion” companies that started in the US but is incorporated in the Netherlands to avoid taxes. Yet, the administrative offices are in Pennsylvanian in the US. It sells EpiPen(R) all over the world. In Australia a subsidiary called AlphaPharm sells the product. It’s a handy plastic syringe device that allows a person with a severe allergic reaction to grab the device and give an injection quickly.
It’s so handy that the company can sell the $1 device containing 3 cents of epinephrine for $697. That’s the price quoted by Costco. The same drug can be purchased online through Canadadrugs.com for $112.71 and through Kiwidrug.com for $122.51.
It’s not clear why other companies that package injectable drugs don’t supply prefilled syringes for this purpose — probably a very aggressive legal department or the acquisition of competing suppliers. The device is not something novel — it’s just a syringe — so it should never have received a patent.
Emergency Rooms and doctor’s offices don’t fool around with the EpiPen(R). They just purchase cheap vials of epinephrine and cheap syringes to give the dose for a few dollars. A patient could do this with a little training — it would save a lot of money. The cost of an EpiPen(R) so high the people who need the medication don’t buy it — so the few seconds a patient might take to draw up the medication in a syringe is better than no medication at all.
The Mylan company is a good example of why drug companies should be more regulated and have profits limited.
Mylan purchased the decades old EpiPen(R) rights from Merck in 2007. The consumer price in 2007 was about $60. With a major marketing effort (basically convincing patients, schools and healthcare facilities to always have the product available) the price is now about $700 accounting for about 50% of company profits. Teva Pharmaceuticals is working on a generic epinephrine injector but it probably will not be available until 2018. A startup company Windgap Medical has invented a device using powdered epinephrine but it may be many years, if ever, before the device arrives on the market — but, the device promises to extend the shelf life from 18 months (for the EpiPen) to several years.
Here are some good references about EpiPen(R) and Mylan
There is a perfectly acceptable (FDA approved) alternative to EpiPen in the form a competing product called Adrenaclick which costs only about $140 (according to GoodRx) for a two pack. This product does little advertising — certainly not as much as EpiPen. But, advertising does not equate to product superiority. To get the less expensive product:
- If the prescriber wrote a prescription in a generic format (Epinephrine auto-injector 0.3 mg (or 0.15 mg) for injection in case of allergic emergency) then a patient should simply call the pharmacy to obtain the lower cost alternative.
- If the prescriber wrote the prescription for the easy-to-remember brand name a patient should simply call the prescriber’s office and ask that a replacement prescription be sent to the pharmacy for the Adrenoclick in the same dose as for the EpiPen.
- The two devices are not exactly the same but the technique is very similar. The patient should read the directions very carefully to understand the small differences — read this when the medication arrives, not when an emergency is present. The pharmacist is required to provide personal instructions and answer questions about products they sell.
Although the Adrenoclick is less expensive it is still much too expensive. The manufacturing price is probably less than $10 each. Also, keep in mind the shelf life — liquid epinephrine only has a shelf life of 18 months — so even if the medication is not used there is a recurring cost for replacement.
The two most important questions cancer patients have when thinking about cancer drugs are 1) how much life do I gain? (survival) and 2) will I feel OK while I survive? (quality of life). The problem for drug makers is it is expensive and time consuming to answer those questions (to use endpoints of survival and quality of life).
Drug surrogates are measurements that show some effect of a cancer drug but are not absolutely related to those 2 primary questions. An example of a surrogate endpoint is “event-free survival”. This is a measure of time, like the time from when chemotherapy is given before something bad happens. Clearly important, but not the same as survival or quality of life.
The Federal Drug Administration (FDA) has a list of surrogate endpoints it will accept in order to approve cancer drugs. Drug companies have progressively moved research to those surrogate endpoints. The graph below is based on the data of Martel.
Many times this shortcut is helpful for patients but it is always helpful for drug makers. It has decreased the costs associated with marketing a drug. But, the cost of drugs has gone up at a faster rate than the prolongation of life the drugs impart. And, that survival may not be a benefit in quality of life. Now, virtually all new anticancer drugs exceed the $50,000 per quality life year many social researchers say is the amount our economy can afford. It means insurance can’t include those drugs otherwise premiums would be so high the average citizen could not afford the insurance. Here is a very disturbing graph from an article by Howard.
The vertical axis is that cost being paid for one year of life provided by a cancer drug. The horizontal axis is the year in which that drug was approved. Meaning it’s not a very good deal — the cost of one year of life gained by chemotherapy is rising and you likely can’t afford such drugs. The economics are really depressing and the situation is absolutely not sustainable. Rather than hoping a treatment will be invented we will be hoping the cost of that treatment is within reach.
There are signs the cancer drugs are overpriced, inflated by speculation and simple price gouging. To the extent such unethical practices exist they need to be rooted out and stopped. Given the past history of big pharma there is likely a lot that needs to be fixed.
Asthmatic abuse: (definition) The systematic and intentional market manipulation of asthma medication prices resulting in large corporate profits and financial ruin for people with asthma (see also: racketeering, theft, extortion, corruption, complicity and congress).
Price gouging of people with asthma by U.S. pharmaceutical companies is legendary (New York Times). Now some of those same companies want to move their corporate offices to other countries to avoid U.S. taxes. RIPOFF is the technical term.
An inhaler is a pressurized gadget to make a mist of a medication so a person can inhale the mist (see the picture at the right). It should have never been patented: it is useful, but it is trivial and certainly not novel. Now, through patent manipulations and suits there are NO GENERIC INHALERS FOR ASTHMATICS; there are only high priced brand name products — despite the fact this type of sprayer and medication has been available for 40 years.
Albuterol is the most common anti-asthma inhaler. The drug is easy to manufacture (costs a few cents) and the inhaler is trivial (costs less than a dollar). The US price listed below is from Costco (considered the lowest price source in the US). The Indian price quoted below is from allmedsdeal.com (this is not an endorsement, just an example).
- The US price: PROAIR HFA 90 MCG INHALER (TEV) $55.46
- The Indian price: Ventorlin CFC Free Inhaler / Salbutamol 100mcg (GSK) $4.40
These are the same drugs: US price $55, Indian price $4. GSK is a reputable UK company that manufactures albuterol, sells it worldwide, but not in the US. Without the unreasonable market restrictions and nearly insane FDA rules asthmatics would be able to purchase albuterol for about $4 per inhaler.
Patents should be allowed to exist, but consumer prices must be limited. Countries other than the US exercise this control. Citizens fight price-gouging companies — why not fight price-gouging drug companies? Medicare insists doctors accept payment at the lowest rate offered, so why should Medicare fail to insist on the lowest price drug companies offer elsewhere in the world?
The current laws for pharmaceuticals are so complicated it defies understanding. If you like complexity, like laws and like legal suits then continue the current system. Instead, consider the following:
What part of this simple rule would be difficult to understand:
THE RETAIL PRICE OF ALBUTEROL INHALER SHALL BE $4.
That’s the kind of pharmaceutical control the US needs.
Brand-name or patented medications cost much more than generic medications. One would think some other inventor would dream up an alternative to sell at a lower price. One would also think once the patent expires generics would be be quickly shipped to pharmacies. But, as usual, it’s more complicated than you think and compounded by corporate deals not really in the consumer’s interest.
Patents are for “novel, useful and not obvious” inventions and the exclusive right to sell the item lasts for 20 years in the U.S.. Unless, someone invents something similar that the original patent owner did not think of. Also, the the patent owner can request an extension for various reasons (adjudicated in the courts which usually takes at least a year). Drugs are such inventions. Some of the patented drugs are very profitable (blockbuster drugs) making millions and sometimes billions of dollars.
Big pharmaceutical companies depend on patents for their very existence. The high cost of drug development and FDA approval is recovered during the 20 years of a new drug sales — some say it is often recovered in just 10 years. The patents have become so expansive that other inventors are only able to find a bio similar product that can withstand intense legal action for patent infringement about 15% of the time. But, those 15% spend so much money in legal matters they hardly see any advantage to marketing early.
When the patent runs out the price of a drug can drop 1000% as generic manufacturers enter the market. All patients wish this would happen sooner.
Megan Thompson of PBS presented a video segment about the practices of drug companies on 6/28/14. She told about “pay-for-delay” which is a method of preventing bio-similar products from being marketed by paying generic makers millions of dollars a year to delay marketing until the patent runs our (or longer). She also told about “evergreening” which is a technique used near the end of a patent: the drug price is increased substantially while a patented bio-similar product made by the same company is marketed at a slightly lower price. Doctors trying to help lower cost change patients to the similar product and the patient never knows that in a short time the original drug becomes generic and much less expensive.
According to the FTC the combined “pay-for-delay” and “evergreening” cost consumers billions of dollars and make billions of dollars in drug company profit.
What needs to be done:
- Start a linear profit limitation starting at drug patent year 1 (20% above manufacturing cost) and ending at year 20 (5% profit limitation).
- Notification of patients by pharmacies about lower cost bio-similar products as soon as they come out.
- Eliminate “pay-for-delay” and drug patent extensions.
Elisabeth Rosenthal of the New York Times published her article “Even Small Medical Advances Can Mean Big Jumps in Bills” on April 6, 2014. Type 1 diabetes is a rapidly fatal illness without insulin treatment. The discovery of insulin in the 1920’s changed the disease from fatal to treatable and with improved insulin and improved devices to deliver the drug people with the disease now can look forward to a long life.
The article by Ms. Rosenthal points up the cost of current insulin pump therapy. She lists the yearly cost of insulin treatment for one woman as $26,470 (a large part paid by the woman’s insurance).
Surely, big pharma would not take advantage patients with life threatening illness like diabetes. Surely, they would not pad the bill with unnecessary equipment or lock-in patients to their brand of insulin with a device linked to that brand. Surely, US big pharma would not disadvantage US citizens and favor drug plans in other countries. WRONG, WRONG AND WRONG AGAIN. It’s the modus operaindi of such organizations and a lack of regulation that allows it to happen.
- Ms. Rosenthal comments on the fluff added to the bill: talking pumps with multiple colors and new models every year.
- The linking of insulin pumps to only one type of insulin (made by the insulin maker).
- The withdrawal of less expensive insulin from the market.
- The 70% profit on insulin.
- The limited number of companies that now make insulin.
- The sweet deals for countries that drive hard bargains (acquisition cost for a bottle of insulin in the UK $30 but in the US $200).
It seems there is a line to be drawn. On one side is the unquestionable benefit of research and development that brings fantastic life saving benefit to many patients. On another side is a business formula for fantastic profit to a few people. Fortunately, one need not choose either extreme — it is possible to have adequate research and reasonable profit as demonstrated in other parts of the world.
So, what can and should be done?
- Break up drug companies to separate the manufacture of insulin and the manufacture of insulin pumps. The competition in the pump market should not be limited by the drug maker.
- Limit drug patents with a strict end point and encourage smaller companies to make generics that may not be an exact copy but simply be similar (bio-similar).
- Set prices for drugs and devices based on realistic economic considerations (like limiting profit to 5%).
- Allow government sponsored research to compare various types of similar therapy to allow a reasonable choice by patients and providers.
- And, allow the government to negotiate prices since the government now pays a big part of health care costs.
Elisabeth Rosenthal wrote the lead story for The New York Times today (10/13/13) “The Soaring Cost of a Simple Breath“. This is another blockbuster exposé of drug costs that are crippling US health care. Sadly, not a story about what is being done to correct the problem.
Here are some of her key points:
- The average brand name prescription has risen from 1995 at $40 to 2013 at $170
- The average generic prescription has risen from 1995 at $20 to 2013 at $45.
- A common asthma medication Pulmicort costs $175 in the US but only $20 in the UK and $25 in France.
- Drugs account for 10% of the $2.7 trillion annual health bill.
- Americans take more generic medications than people in other countries (they just can’t afford branded or new medications)
- Other countries set the wholesale price of drugs to make drugs affordable.
- US pharmaceutical companies have used the FDA to restrict manufacturing rules to favor large companies and have used the judicial system to bankrupt competitors.
- US pharmaceutical companies have paid generic companies not to sell their products in the US.
- Medicaid, paid for by taxes, pays millions of dollars to drug companies for high priced medications.
- Asthma medications have been the target of profiteering drug companies. Not a single inhaler is available as a generic. Despite the fact that inhaled medications have been available for over 30 years. The effect on people with this condition is a tremendous burden.
- Drug companies spend about 50% of funds on marketing and only about 20% on drug research. Other advanced countries prohibit marketing prescription medications directly to consumers.
- Medicare is prohibited from negotiating prices.
- Drug prescribing guidelines published by the government are prohibited from considering cost.
Rather than just be angry about the sorry state of drug costs, what can be done? Just take a lesson from other countries, this is not rocket science:
- The US government should set the prices for all drugs
- The FDA needs to loosen the rules for generic manufacturing — for goodness sake, an inhaler is an inhaler, not the space shuttle.
- Comparative effectiveness research should be required, and the results published for doctors as in the UK. Drug cost is important to all US citizens, so restricting the government from considering cost borders on insanity (perhaps giving psychiatric medications to Congress is currently too expensive).
- Finally, there is no excuse for the current drug cost problem — other countries have solved the problem, the US needs to do the same.