“It’s egregious” said Paul M. Quinton, a professor at the University of California at San Diego who himself has cystic fibrosis. “This is more than five times the salary of an average American family. How can they in good conscience charge that much?”
In justifying the price of Orkambi, Vertex’s chief commercial officer, Stuart Arbuckle, cited four reasons: the small patient population, the clinical benefit of a drug combination that treats the underlying cause of the disease, the time and cost of Vertex’s efforts to bring the medicine to market, and the need to invest in new research to develop therapies to treat the remaining thousands of cystic fibrosis patients with other forms of cystic fibrosis. It should be pointed out that Vertex has been in business for 26 years and only turned a profit once in its history. Clearly, with Orkambi, Vertex is trying to make up some serious financial deficits.
Orkambi is a major breakthrough. Furthermore, it doesn’t come close to being the highest priced new drug. New breakthrough cancer drugs and drugs to treat rare diseases can be priced at almost double the cost of Orkambi. But the enormous publicity generated by the high cost of new drugs is skewing the public’s view of the impact of new drugs on the nation’s overall healthcare bill. This perception is certainly being seized on by payers anxious to drive down their drug costs, even when the costs of these drugs can be readily justified by the overall SAVINGS that breakthrough drugs can deliver thanks to reduced downstream costs and better health for patients in need.
Payers will undoubtedly focus on the fact that these same drugs will be cheaper in Europe, where the price of new drugs is set by negotiations between the innovative company and government regulators. In these negotiations, the country will set the price based on the VALUE it believes that the drug provides. Historically, the European agencies will support a high price for such a breakthrough like Orkambi , but usually the price will be significantly lower than that of the U.S.
This isn’t news to anyone – these practices have gone on for years. However, with the negative reputation of the biopharmaceutical industry and with the increased desire to bring the rising cost of healthcare under control, the public – and then the politicians – will seek to do this by evolving to the European system. The first measure likely to occur will be Congressional passage of legislation that would enable the U.S. secretary of health and human services to negotiate drug pricing. Then, much as happens in Europe, companies will need to justify the price they are seeking based on the value that this new drug brings. Companies already do this when negotiating prices, not just in Europe but also with insurers in the U.S. particularly when insurers have other therapeutic choices. The hepatitis C cure, Gilead’s Sovaldi, was famously launched at $1,000/pill, or $84,000 per patient treated. However, some months later when AbbVie launched its competitor, Viekira Pak, payers now were in position to negotiate with both companies. The result? Suddenly the price of these hepatitis C drugs dropped to European levels. That works when there are options, but that isn’t always the case.
To date, Congress has favored letting market forces set the price of new drugs. This works when there is competition. But when true breakthroughs occur, it can be years before a competitive therapy emerges. Thus, we have the current situation of higher prices in the U.S. It is hard to envision this remaining the status quo over the next five years.
http://www.forbes.com/sites/johnlamattina/2015/07/22/will-the-high-cost-of-vertexs-new-cystic-fibrosis-drug-push-the-u-s-to-european-style-pricing/
http://www.forbes.com/sites/johnlamattina/2015/07/22/will-the-high-cost-of-vertexs-new-cystic-fibrosis-drug-push-the-u-s-to-european-style-pricing/
For an obscure drug that garners decidedly mixed reactions from the medical community, the Acthar treatment for immune system disorders generates not only high-profile controversy, but also sizeable bills for Medicare, according to ProPublica.
ReplyDeleteThe explosive growth illustrates how Medicare’s prescription drug program is struggling to contain the taxpayer burden for costly medicines aimed at rare diseases, the news site notes, and this comes to light as a national debate intensifies over the rising price tag for medicines, in general.
From 2008 to 2012, the Medicare tab for Acthar rose 20-fold to $141.5 million, according to prescribing data. The drug ranked 139th in 2012, in terms of total cost, out of more than 3,000 drugs prescribed in Medicare. In 2008, its ranking stood at 660, according to ProPublica.
What accounts for the change? The news site writes that Questcor Pharmaceuticals has increased the price on Acthar sharply since 2007. Second, several top Acthar prescribers have financial ties to the drug maker, such as research grants, payment for speeches and compensation for serving on advisory boards, and they have helped drive the increase in prescriptions.
And while medical experts say there is insufficient evidence to suggest Acthar works better than cheaper options for some maladies for which the drug is prescribed, such as multiple sclerosis relapses, a Medicare spokesman tells ProPublica that the agency is obligated to provide coverage anyway. Compounding the situation, Questcor markets the drug for several conditions for which clinical trials were not required to prove effectiveness.
How is that possible? Acthar was originally approved more than 60 years ago for numerous indications, before such requirements went into effect. “They had to prove nothing,” Sanford Bernstein analyst Ronny Gal tells ProPublica. “Essentially, it got grandfathered indications from a day that preceded the way we look at drugs now.” Questcor, by the way, bought the drug in 2001.
Even as Medicare continues to pay for Acthar – ProPublica estimates the agency will have shelled out at least $220 million in 2013 – Tricare, the military health program and private insurers are restricting access. At a recent conference, ProPublica writes that Ed Pazella, who is national medical director for pharmacy policy and strategy at Aetna, had this to say about the drug:
The combination of “aggressive marketing and aggressive price increases finally caused it to become a line item that a finance guy looked at and said: ‘What the hell are we paying for this? Why? What is it?’ And that’s when we started looking at what’s our policy around this stuff.”
http://blogs.wsj.com/pharmalot/2014/08/05/a-little-known-drug-from-questcor-generates-a-huge-medicare-bill/
The doctor was dumbfounded: a drug that used to cost $50 was now selling for $28,000 for a 5-milliliter vial.
ReplyDeleteThe physician, Dr. Ladislas Lazaro IV, remembered occasionally prescribing this anti-inflammatory, named H.P. Acthar Gel, for gout back in the early 1990s. Then the drug seemed to fade from view. Dr. Lazaro had all but forgotten about it, until a sales representative from a company called Questcor Pharmaceuticals appeared at his office and suggested that he try it for various rheumatologic conditions.
“I’ve never seen anything like this,” Dr. Lazaro, a rheumatologist in Lafayette, La., says of the price increase.
How the price of this drug rose so far, so fast is a story for these troubled times in American health care — a tale of aggressive marketing, questionable medicine and, not least, out-of-control costs. At the center of it is Questcor, which turned the once-obscure Acthar into a hugely profitable wonder drug and itself into one of Wall Street’s highest fliers.
At least until recently, that is. Now some doctors, insurance companies and investors are beginning to have doubts about whether the drug is really any better than much cheaper alternatives. Short-sellers have written scathing criticisms of the company, questioning its marketing tactics and predicting that its shareholders are highly vulnerable.
That Acthar is even a potential blockbuster is a remarkable turn of events, considering that the drug was developed in the 1950s by a division of Armour & Company, the meatpacking company that once ruled the Union Stock Yards of Chicago. As in the 1950s, Acthar is still extracted from the pituitary glands of slaughtered pigs — essentially a byproduct of the meatpacking industry.
The most important use of Acthar has been to treat infantile spasms, also known as West syndrome, a rare, sometimes fatal epileptic disorder that generally strikes before the age of 1.
For several years, Questcor, which is based in Anaheim, lost money on Acthar because the drug’s market was so small. In 2007, it raised the price overnight, to more than $23,000 a vial, from $1,650, bringing the cost of a typical course of treatment for infantile spasms to above $100,000. It said it needed the high price to keep the drug on the market.
“We have this drug at a very high price right now because, really, our principal market is infantile spasms,” Don M. Bailey, Questcor’s chief executive, told analysts in 2009. “And we only have about 800 patients a year. It’s a very, very small — tiny — market.”
Companies often charge stratospheric prices for drugs for rare diseases — known as orphan drugs — and Acthar’s price is not as high as some. Society generally tolerates those costs to encourage drug companies to develop crucial, possibly lifesaving drugs for these often neglected diseases.
But Questcor did almost no research or development to bring Acthar to market, merely buying the rights to the drug from its previous owner for $100,000 in 2001. And while the manufacturing of Acthar is complex, it accounts for only about 1 cent of every dollar that Questcor charges for the drug.
http://www.nytimes.com/2012/12/30/business/questcor-finds-profit-for-acthar-drug-at-28000-a-vial.html?_r=0
When Mallinckrodt ($MNK) bought Questcor Pharmaceuticals last year, it acquired more than H.P. Acthar Gel and the ongoing controversy about its pricing. It also inherited a rat's nest of state and federal investigations--and that snarl is growing.
ReplyDeleteThe Federal Trade Commission has now demanded documents and information about Questcor's 2013 deal for the rights to Synacthen Depot, a Novartis ($NVS) drug that might have been a head-to-head competitor to Acthar. And as Mallinckrodt disclosed in a Thursday securities filing, that FTC subpoena was just one of several new investigations; "a small number of states" are looking into whether the deal violates state antitrust laws.
When Questcor ponied up $135 million for the rights to Synacthen, market-watchers raised their eyebrows. After all, the company had drawn fire for its pricing on Acthar, which brought in $761 million in 2013 after a series of big price hikes. And snapping up that potential rival--which was on the verge of launching at a far lower price, if another bidding drugmaker had succeeded in buying it--essentially elbowed aside the competition.
"Mallinckrodt is fully cooperating in each of these investigations," the company said in the filing, adding that it doesn't expect the probes to have a material effect on its finances.
Questcor bought Acthar years ago and immediately raised the price to more than $1,500 per vial, and by 2013, it was selling at $28,000 each. It was one of the world's most expensive drugs in 2013, according to FiercePharma research, at a cost of $205,681 per patient per year.
Along the way, Questcor came under the eye of the feds, which launched an investigation into its Acthar marketing, and short sellers, which had their own set of allegations. The company later reported thousands of side effects to the SEC, and a New York Times report linked the drug to 20 deaths and half a dozen disabilities. In a securities filing last year ahead of the Mallinckrodt deal closing, Questcor said 14% of Acthar scripts written in 2013 resulted in adverse event reports.
http://www.fiercepharma.com/story/questcors-acthar-maneuvers-land-mallinckrodt-hot-water-ftc-state-ags/2015-06-18
These and other matters of interest to Mallinckrodt shareholders are discussed at length in the merger proxy filed last month. Not included in the filing, however, are the risks specific to Questcor, a company that derives 95 percent of its revenue from a 60-year-old immune-system drug called Acthar.
ReplyDeleteAmong those risks is a rising number of significant “adverse events” in recent years among users of Acthar.
Since 2012, the events, as reported to the Food and Drug Administration’s Adverse Event Reporting System, or Faers (pronounced “fares”), have included 20 deaths and six disabilities among patients reported to have been using Acthar and in which Acthar was recorded as “suspect,” or the drug most likely to have been associated with the event. From January 2000 through 2011, by contrast, 13 deaths involving Acthar were reported to the F.D.A.’s system.
Although Questcor has reported some of these events to the F.D.A., as required, the company has not discussed the adverse outcomes in its financial filings. A Supreme Court ruling in 2011 concluded that reports of adverse events among patients using a drug, even if few in number, are of interest to investors weighing whether to buy or sell shares in the manufacturer.
Asked why Questcor had not disclosed the adverse events, a company spokeswoman provided this statement: “Our mission as a company is to help patients suffering from serious diseases, so we are always deeply saddened when we hear of a patient passing away. The safety profile of Acthar is well known, having been established over several decades of the drug’s use in treating seriously ill adult and pediatric patients who are often at risk regardless of treatment, have serious co-morbidities, and are often taking many other drugs at the same time.
“While the Faers database is useful in collecting data for adverse events and helping spot potential product safety signals, the F.D.A. cautions that it cannot be used to determine causation. We take our reporting obligations very seriously and we are confident that we have appropriately satisfied our disclosure requirements with the relevant regulatory agencies.”
http://www.nytimes.com/2014/06/13/business/a-drugs-risks-are-left-out-in-discussion-of-questcor-deal.html
For years, Questcor Pharmaceuticals has highlighted the potential benefits of Acthar, its immune-system drug, while saying little about its ill effects.
ReplyDeleteBut according to a regulatory filing made by Questcor early Thursday, the number of patients reporting a so-called adverse event while using the drug last year represented almost 5 percent of prescriptions dispensed. The total number of events in 2013 reported by patients, who can experience multiple ill effects, was almost 14 percent of prescriptions, up from 9.1 percent in 2011.
It was the first time Questcor, which has received a $5.6 billion takeover bid from Mallinckrodt Pharmaceuticals, had disclosed any problems experienced by Acthar patients, even though such information is of keen interest to investors. Questcor’s disclosure followed a report last month in The New York Times analyzing adverse events data on Acthar from the Food and Drug Administration.
From Jan. 1, 2011, to Dec. 31, 2013, Questcor said, 1,022 patients reported 3,100 adverse events while on Acthar. The filing said that many users of the drug were seriously ill and faced life-threatening health risks. Acthar generates some 95 percent of Questcor’s revenues.
Many users of Acthar, an immune-system drug, faced serious illness, a filing said.
The data, which was obtained under the Freedom of Information Act, showed 20 deaths and six disabilities since 2012 among patients reported to have been using Acthar and in which Acthar was recorded as “suspect,” or the drug most likely to have been associated with the event. From January 2000 through 2011, by contrast, 13 deaths involving Acthar were submitted to the F.D.A.’s adverse events reporting system. The F.D.A. requires reports of these events from drug manufacturers, but health professionals, patients and consumers can also report incidents.
Among the reported effects in the data were abdominal pain, increases in blood sugar and renal failure.
When asked last month why the company had not disclosed these events, a spokeswoman said that the safety profile of Acthar was well known.
http://www.nytimes.com/2014/07/11/business/questcor-reveals-adverse-events-data-for-acthar-for-first-time.html?_r=0
The pressure is mounting on pharmaceutical companies to lower their prices for lifesaving drugs, as a group of more than 100 prominent oncologists is calling for grassroots solutions to the skyrocketing cost of cancer treatment.
ReplyDeleteIn an editorial published on Thursday in the journal Mayo Clinic Proceedings, 118 doctors from top hospitals around the country argue that up to 20 percent of cancer patients don’t follow their recommended treatment regimen because they’re being priced out of the drugs they need. The oncologists say this financial burden puts sick Americans in an untenable situation as they’re fighting for their lives.
“It’s time for patients and their physicians to call for change,” Dr. Ayalew Tefferi, a doctor at the Mayo Clinic and the lead author of the paper, concluded.
In the editorial, Tefferi and his colleagues call for several policy changes to help address the problem. They say the United States should establish a new regulatory body to help set drug prices after new medications are approved for the market, as well as allow cheaper drugs to be imported from other countries like Canada. They also recommend allowing Medicare to negotiate directly with pharmaceutical companies, which could help the government program use its bargaining power to demand lower prices.
According to a poll released last week from the Kaiser Family Foundation, the majority of Americans agree that Medicare should have the power to help negotiate down drug prices. This particular reform has encountered political resistance because of concerns over government interference in the private marketplace. Eighty-seven percent of participants in Kaiser’s survey, however, said they want Medicare to pressure Big Pharma for discounts on costly drugs.
“People don’t understand why these drugs cost so much, and they don’t understand why, in America, you can’t negotiate for a better price,” Mollyann Brodie, the executive director of public opinion and survey research at the foundation, told Reuters...
Medical professionals have been frustrated about this dynamic for years, particularly as national controversy swirls around innovative new drugs that show promise in treating chronic conditions yet are priced as high as $1,000 dollars per pill. In 2013, a similar editorial penned by a different group of doctors who specialize in leukemia suggested that the rising drug prices may actually violate the Hippocratic Oath’s requirement to “do no harm” to patients...
Though pharmaceutical giants typically say they have to set their prices high in order to offset the costs of bringing new drugs to the market — a lengthy process that requires a lot of upfront investment — a growing number of lawmakers are becoming skeptical. As the New York Times reports, at least six state legislatures have recently introduced so-called “pharmaceutical cost transparency” bills that, if passed, would require Big Pharma to explain exactly how they arrived at the price tag for their medications. Even some GOP lawmakers, who typically oppose efforts to regulate the free market, are starting to question why these drugs need to be quite so expensive.
http://thinkprogress.org/health/2015/07/23/3683708/cancer-drugs-cost-doctors/
More than 100 oncologists. In Support of a Patient-Driven Initiative and Petition to Lower the High Price of Cancer Drugs. Mayo Clinic Proceedings Published Online: July 23, 2015
Courtesy of: http://www.medpagetoday.com/Urology/Urology/52726?isalert=1&uun=g906366d4329R5793688u&xid=NL_breakingnews_2015-07-23
Switzerland's Roche is lining up more new drugs to drive sales in a two-year window before cheap copycats of its biotech medicines hit the market, including a promising cancer immunotherapy it hopes to launch by late 2016.
ReplyDeleteThe strategy is working so far, with group sales in the first half increasing by a slightly better-than-expected 3 percent as demand for recently introduced products helped offset the strength of the Swiss franc.
The shares rose 1.1 percent by 0920 GMT on Thursday, with Deutsche Bank analyst Tim Race describing the results as "a modest positive".
Roche is the world's largest maker of cancer drugs and investors are banking on its ability to stay ahead as it advances into the hot new field of immunotherapy, where it faces rivals such as Bristol-Myers Squibb and Merck.
The company needs to keep producing novel products to counter the threat posed by cheap copies of biotech drugs, known as biosimilars, as well as innovative competition to eye drug Lucentis and hepatitis C treatment Pegasys.
Its three top-selling cancer drugs -- Herceptin, Rituxan and Avastin -- are all still growing but the patents on the first two have already expired in Europe.
Still, copying such drugs is hard and Roche doesn't expect biosimilar Herceptin and Rituxan to emerge just yet.
"We expect them to enter in Europe in 2017 and, according to our latest information, probably towards the end of 2017," Roche Chief Executive Severin Schwan told reporters.
Biosimilars in the United States will come only later, since Roche has patent protection there until 2019.
http://www.reuters.com/article/2015/07/23/roche-results-idUSL5N1030F620150723
Specialists in infectious disease are protesting a gigantic overnight increase in the price of a 62-year-old drug that is the standard of care for treating a life-threatening parasitic infection.
ReplyDeleteThe drug, called Daraprim, was acquired in August by Turing Pharmaceuticals, a start-up run by a former hedge fund manager. Turing immediately raised the price to $750 a tablet from $13.50, bringing the annual cost of treatment for some patients to hundreds of thousands of dollars.
“What is it that they are doing differently that has led to this dramatic increase?” said Dr. Judith Aberg, the chief of the division of infectious diseases at the Icahn School of Medicine at Mount Sinai. She said the price increase could force hospitals to use “alternative therapies that may not have the same efficacy.”
Turing’s price increase is not an isolated example. While most of the attention on pharmaceutical prices has been on new drugs for diseases like cancer, hepatitis C and high cholesterol, there is also growing concern about huge price increases on older drugs, some of them generic, that have long been mainstays of treatment...
Although some price increases have been caused by shortages, others have resulted from a business strategy of buying old neglected drugs and turning them into high-priced “specialty drugs.”
Cycloserine, a drug used to treat dangerous multidrug-resistant tuberculosis, was just increased in price to $10,800 for 30 pills from $500 after its acquisition by Rodelis Therapeutics. Scott Spencer, general manager of Rodelis, said the company needed to invest to make sure the supply of the drug remained reliable. He said the company provided the drug free to certain needy patients....
Doxycycline, an antibiotic, went from $20 a bottle in October 2013 to $1,849 by April 2014, according to the two lawmakers...
“This isn’t the greedy drug company trying to gouge patients, it is us trying to stay in business,” Mr. Shkreli said. He said that many patients use the drug for far less than a year and that the price was now more in line with those of other drugs for rare diseases.
“This is still one of the smallest pharmaceutical products in the world,” he said. “It really doesn’t make sense to get any criticism for this.”
This is not the first time the 32-year-old Mr. Shkreli, who has a reputation for both brilliance and brashness, has been the center of controversy...
Daraprim cost only about $1 a tablet several years ago, but the drug’s price rose sharply after CorePharma acquired it. According to IMS Health, which tracks prescriptions, sales of the drug jumped to $6.3 million in 2011 from $667,000 in 2010, even as prescriptions held steady at about 12,700. In 2014, after further price increases, sales were $9.9 million, as the number of prescriptions shrank to 8,821...
Dr. Aberg of Mount Sinai said some hospitals will now find Daraprim too expensive to keep in stock, possibly resulting in treatment delays. She said that Mount Sinai was continuing to use the drug, but each use now required a special review.
“This seems to be all profit-driven for somebody,” Dr. Aberg said, “and I just think it’s a very dangerous process.”
http://www.nytimes.com/2015/09/21/business/a-huge-overnight-increase-in-a-drugs-price-raises-protests.html?hp&action=click&pgtype=Homepage&module=second-column-region®ion=top-news&WT.nav=top-&_r=1
Turing Pharmaceuticals CEO Martin Shkreli said on Tuesday that he would not go through with his plan to raise the price of the anti-parasite drug Daraprim to $750 per pill, NBC News reported.
ReplyDelete“It is absolutely a reaction,” Shkreli said of the circumstances behind the decision. “There were mistakes made with respect to helping people understand why we took this action. I think that it makes sense to lower the price in response to the anger that was felt by people.”
Shkreli — who is being sued for $65 million by his former company, Retrophin — had defended the move as recently as Tuesday morning, telling CBS News that his decision to raise the price of the 62-year-old drug from $13.50 per pill had “a lot of altruistic properties to it.”
http://www.rawstory.com/2015/09/pharma-bro-backs-down-martin-shkreli-will-roll-back-outrageous-daraprim-price-gouge/
A hedge fund manager turned pharmaceuticals CEO—with no scientific training in drug development—buys the rights to a drug, raises the price by 5,000 percent, stands by his decision, then possibly relents, a little. This is probably the least shocking news of the week. Between the laws, the absence of laws, and the character of corporate meritocracy, our society is diligently set up to encourage and justify what Turing Pharmaceuticals CEO Martin Shkreli did with the price of his new drug. Far more telling of how this backward meritocracy works is how Shkreli has handled himself in the face of controversy...
ReplyDeleteIn other words, the failure of logic belongs to Shkreli, who seems not to understand that having a rational position and feeling strongly about that position are not mutually exclusive. Indeed, strong feelings about political positions often develop as a consequence of having thoroughly and rationally scrutinized an issue.
In Shkreli’s case, it’s simply intellectually lazy to default to the market—an abstraction with no moral authority—to justify his choice to raise the price of Daraprim 5,000 percent. Putting aside that Shkreli abuses the logic of the market when he picks another, high-priced drug as a point of comparison to argue that Daraprim was undervalued (without explaining why it’s not also possible that the other drug was overvalued), it’s also perfectly logical for us to ask whether it’s moral to raise the price of a drug 5,000 percent overnight. That question—is what Shrkeli did the right thing to do—is a thornier and more intellectually challenging question than “is there a market justification for what you have done?” Every intelligent person should be asking the question about what is right, not just what is explicable within the narrow parameters of the market’s logic.
http://www.salon.com/2015/09/23/morons_dumb_idiots_martin_shkreli_and_donald_trump_deserve_each_other/?google_editors_picks=true
Shkreli claims the opposite is true. Low drug prices, he says, leave doctors and patients struggling to get government resources for science. CEOs don’t even know that they own the medicines, or discontinue making them. Raising the price guarantees the supply of the drug, leads companies to go out looking for patients who need it, and spurs investment in research and development to create more medicines. The fact that he profits doesn’t change this. “I don’t see any loser in any of this,” Shkreli says now. “I don’t see any loser in that situation.”
ReplyDeleteWithout evidence patients are being harmed by cheap drugs, it’s probably right to view this as a crass justification. But Shkreli was initially good at selling the message. When a Reddit thread ignited about the price increase, Shkreli seemed to win converts. “We make sure absolutely no one has a hard time affording their medicine,” he wrote. “We have people dedicated to this job, which is why we need a higher price (to hire said people).”
This strategy has been certainly been great for Retrophin – the stock is up 300% in two years. It’s been great for other companies that came before it, too. Questcor Pharmaceuticals raised the price of its drug, Acthar Gel, from $40 to $28,000 a vial. The reward? It was one of the best-performing stocks in America until Mallinckrodt bought it for $5.6 billion last year. Valeant Pharmaceuticals has done big price increases on numerous drugs. The stock’s up 740% over five years and its founder, Michael Pearson, is a billionaire. Only Shkreli has drawn the American public’s rage.
http://www.forbes.com/sites#/sites/matthewherper/2015/09/24/my-lunch-with-shkreli-what-we-should-learn-from-pharmas-latest-monster/
Turing Pharmaceuticals CEO Martin Shkreli has been called plenty of names this week, including some expletives: Public Enemy No. 1, a villain, the most hated man in America/the Internet/the world. Even Republican presidential hopeful Donald Trump jumped in, ripping the 32-year-old former hedge fund manager as a "spoiled brat."
ReplyDeleteIt's one thing for your critics to pile on when you've done something distasteful like jack up the price of a life-saving drug 4,000 percent overnight, but in Shkreli's case his supposed friends took their own stabs at their former "pharma bro."
In the hours after Shkreli's defiant, hot-headed Tweets and TV interviews went viral, leaders of the country's powerful drug industry trade group got together to determine whether they should weigh in and, if so, what they should say.
The result was this Tweet:
.@TuringPharma does not represent the values of @PhRMA member companies.
— PhRMA (@PhRMA) September 22, 2015
In its more than 55 years, the Pharmaceutical Research and Manufacturers of America (PhRMA) has been known to circle the wagons and protect its own when there is controversy...
But in Shkreli's case, his company's decision and his unapologetic public comments about how "altruistic" this was hit a nerve.
Shkreli's flip-flop on the price of Daraprim, which is used to treat a life-threatening parasitic infection in patients with immune issues like HIV/AIDS and cancer, did little to improve his relationship with the rest of the industry. Hours after he insisted on national television that the $750-a-pill price on the formerly $18-a-pill drug was the right one for business reasons, he announced that he would lower the price — a move that galvanized critics and set a precedent for other companies to do the same.
https://www.washingtonpost.com/news/to-your-health/wp/2015/09/24/why-big-pharma-hates-martin-shkreli-too/
Courtesy of: http://www.medpagetoday.com/PublicHealthPolicy/PublicHealth/53720?isalert=1&uun=g906366d4553R5793688u&xid=NL_breakingnews_2015-09-25
And so PhRMA disavowed the 32-year-old former hedge fund manager, drawing a bright line between him — the Turing CEO — and us, their own members.
ReplyDeleteOn Wednesday, things got worse for Shkreli as BIO, the biotech industry association, gave him the boot.
"Turing Pharmaceuticals was a member of BIO for a brief period of time and is currently no longer a member," a spokesman for the organization told FierceBiotech, a daily newsletter for the industry. "The company and its leadership do not reflect the commitment to innovation and values that are at the core of BIO's reputation and mission. For that reason, BIO determined, after a review of Turing's membership status, that the company did not meet our eligibility criteria, and we took action to rescind its membership and return its membership dues."
The secret truth, however: Shkreli is far from the only drug company executive to set what critics say are exorbitant prices, and he certainly won't be the last.
https://www.washingtonpost.com/news/to-your-health/wp/2015/09/24/why-big-pharma-hates-martin-shkreli-too/
Courtesy of: http://www.medpagetoday.com/PublicHealthPolicy/PublicHealth/53720?isalert=1&uun=g906366d4553R5793688u&xid=NL_breakingnews_2015-09-25
For days, a seething social media mob backed by an opportunistic politician or two has hammered the swaggering, 32-year-old "pharma bro" who jacked up the price of an obscure but critical drug, was theatrically unapologetic about it and publicly called a journalist a moron for asking why.
ReplyDeleteShkreli's actions were shocking for a simple reason: It was a rare moment of complete transparency in health care, where motives, prices and how the system works is rarely talked about so nakedly. Shkreli's company, Turing Pharmaceuticals, raised the price of Daraprim from $13.50 to $750 per pill because he could.
"I think it reflects a widespread appreciation that pricing for drugs is entirely irrational in this country, and the pharmaceutical industry has total control over prices and there's no rationality to the system," said Peter Bach, a physician and director of the center for health policy and outcomes at Memorial Sloan Kettering Cancer Center in New York. "It's such a perfect, crystalline example of everything that can be done, given the lack of rationality in the system, and the total bankruptcy of the justifications for high drug prices in the first place."
Arthur Caplan, director of the division of medical ethics at New York University Langone Medical Center, said focusing too much on Shkreli was a diversion from the real issues in the health care system, where it's relatively rare to even know how much something costs or what a fair price would be.
Drug companies often set prices and try to deter questions about costs by "ringing the innovation bell" -- suggesting that to limit profits in any way will leave lifesaving cures to languish in test tubes, Caplan said. Shkreli explained what he did in a straightforward way.
"The rest of the health care system ... no one is explaining the price. No one even knows what the price is. And no one knows what a fair price is," Caplan said. "He was transparent -- and the industry, the whole health care industry, is not transparent. It's not even close. It's the most obtuse, dense, incomprehensible pricing structure ever created by humanity."
To hear Shkreli tell it, Turing is the little pharma that could: a startup that bought the only treatment for a severe but rare parasitic infection and then hiked the drug price more than 4,000 percent so the company could begin to turn a profit and grow .
http://www.dailyherald.com/article/20150927/business/150929345/
Why? The answer is best told by Martin Shkreli, the CEO of Turing, and former hedge fund manager. The reason why Shkreli has acquired a generic drug lying in a forgotten backwater, and raised the price of a magnitude more suited to the hyperinflation of the Weimar Republic, is to make profits. Lots of profit. If this answer seems inane, ask yourself why a former hedge fund manager would be interested in a rare disease of devastating consequences. Penitence is the wrong answer.
ReplyDeleteShkreli was shocked that people were questioning his decision to raise the price of Daraprim. He is not the only one to have taken advantage of the asymmetric power in drugonomics, he protested. Compared to Sovaldi, which fetches a $1,000 a pill, Daraprim is a bargain, he reasoned. It is not his fault that the drug had been underpriced relative to the fair market value. And then, with nearly a straight face, Shkreli said that the price increase was for the good of patients. You have to admire the lad's chutzpah. It's either audacity or utter disdain for the proletariat.
Shkreli says the markup will be used for research and development (R&D) of new products, which will be more effective and less toxic than Daraprim. I'd hazard a guess that when Turing's scientists discover the ground-breaking, me-too drug for toxoplasmosis, it won't be cheaper than $750 a tablet. The trouble is that no one is screaming for new products for toxoplasmosis.
Usually, pharma justifies the markup on the drug by the R&D costs incurred. Shkreli, in a move of sheer brilliance, is justifying the costs on promissory research -- research that hasn't happened and may never happen and if it does happen may never yield anything useful.
Imagine you're dying of thirst in Death Valley and this guy selling tap water for $100 a glass says, "I'll be using the $100 profits to make safe water, safer than Evian." You might say, "I don't want Evian, tap water is good enough. I'm dying." In healthcare good enough is not a virtue. There is no end to the potential of reducing human suffering marginally, and no bounds to the price we will pay for that marginal reduction. Shkreli knows that, as do others in this industry.(continued)
(continued) Seizing the day, former senator Hillary Clinton, D-N.Y., who has been awfully silent recently, unveiled a bold proposal where she'd make sure pharma spent their profits appropriately on R&D. She'd hold them accountable. That's really mighty, Senator. I can hear Shkreli quaking in his boots.
ReplyDeleteI understand why the price of the drug is more than the sunk costs of R&D, the cost of production, and the cost of the CEO's private yacht. I understand patents and intellectual property. I get that if pharma doesn't enjoy monopoly, even temporarily, there'd be little incentive to innovate. But this logic has been extended to such a nonsensical level that any perturbation of the status quo, such as importing generics, leads to the threat that pharma won't innovate.
(Incidentally, pyrimethamine costs 10 cents a tablet in India. I'm allowed to check in two pieces of luggage. Just saying.)
No innovation is a bald threat that hasn't been empirically tested. The reason it hasn't been empirically tested is because there's a slim possibility that it may turn out to be true. This is a game of chicken, to borrow game theory, in which pharma doesn't blink, and we're too much of a chicken to call their bluff. We have made a Faustian bargain with pharma -- we want to live longer, and they want to make more money. It's win-win, until we see the price tag...
Pharma is not evil. It is the mythical homo economicus. It does what a rational agent would do in a monopoly -- it fleeces as much as it can fleece. It knows that payers will blink -- case in point, those alleged penny-pinchers at Britain's National Institute of Clinical Excellence yielded to Gilead and will cover Sovaldi...
Shkreli may be a particularly virulent strain of homo economicus. But remember, he is not doing anything illegal. The media are portraying him as an unsentimental money maker. I couldn't care less if he boiled his neighbor's bunny. The demonization distracts us from the most important question, which is not why Shkreli is raising the price of Daraprim by 5,500%, but how.
http://www.kevinmd.com/blog/2015/10/blame-system-not-martin-shkreli.html
Courtesy of: http://www.medpagetoday.com/Blogs/KevinMD/53981?xid=nl_mpt_DHE_2015-10-09&eun=g906366d0r
The most hated man in America — at least a couple weeks ago — just got the back of Bernie Sanders’ hand.
ReplyDeleteAccording to the Boston Globe, Martin Shkreli, the Turing Pharmaceuticals CEO who jacked up the price of Daraprim, the only drug for a rare parasitic disease, by some 4,000 percent, donated $2,700 to Sanders in late September, in hopes of getting a meeting with Sanders.
Bernie said not only no, but hell, no — then gave his money to a health charity.
“We are not keeping the money from this poster boy for drug company greed,” said Sanders spokesman Michael Briggs. The money’s going to the Whitman-Walker clinic in D.C. instead.
According to the Globe’s interview:
“I think it’s cheap to use one person’s action as a platform without kind of talking to that person,” Shkreli said in the interview. “He’ll take my money, but he won’t engage with me for five minutes to understand this issue better.” …
“I’d ask him, what role does innovation play in health care?” Shkreli said. “Is he willing to sort of accept that there is a tradeoff, that to take risks for innovation, companies have to invest lots of money and they need some kind of return for that, and what does he think that should look like?”
http://www.salon.com/2015/10/16/bernie_sanders_smacks_down_martin_shkreli_rejects_meeting_and_donation_from_hated_drug_ceo/
Courtesy of: http://www.medpagetoday.com/PrimaryCare/Obesity/54128?isalert=1&uun=g906366d4593R5793688u&xid=NL_breakingnews_2015-10-16
Shades of Diastat
ReplyDeleteThe share price of Valeant Pharmaceuticals International Inc. dropped nearly 40 per cent Wednesday and trading was halted twice after controversial short-seller Citron Research published a report questioning whether the Laval, Que.-based company could be the “Pharmaceutical Enron.”
The report lowered its target for Valeant to US$50 from over US$200, saying that it had a “smoking gun” uncovering undisclosed relationships with specialty pharmaceutical companies.
“Citron Research has delivered the proof that something really stinks at Valeant and it is goes beyond their egregious price hikes,” the report said.
Citron alleges that Valeant is padding its sales figures. The report suggests that Valeant is using pharmacies, related to dispensary Philidor Rx Services, to store inventory, and is then recording those transactions as sales. Valeant shares recovered some ground after the company’s statement, and closed at US$118.61 in New York. That still represented a 19 per cent drop, the company’s biggest one-day decline since 2011...
Wednesday’s news prompted a tweet from Martin Shkreli defending Valeant. Shkreli is the 32-year-old chief executive of Turing Pharmaceuticals, who sparked a global outcry last month when his company raised the price of treatment for a parasitic infection by more than 4,000 per cent...
The Canadian-based pharma company has been at the forefront of an intensifying debate over price increases for older drugs in the U.S. The company has been scrutinized by lawmakers for pushing up the prices of heart drugs Isuprel and Nitropress by 50 per cent and 600 per cent, respectively.
“Valeant, unfortunately for the company, has become a lightning rod right now for all this publicity,” said Lea Prevel Katsanis, a Concordia University professor who previously spent eight year working in pharmaceutical marketing and recently published a book titled Global Issues in Pharmaceutical Marketing.
“I’m neither an apologist for the industry nor am I a cheerleader,” she said. “I think (pharmaceutical companies) have done some wonderful things for society, they’re an important industry and I think we need them, but there are some very important issues that they have to deal with and they have to fix.”
The drugmaker increased the price of Glumetza, a once-daily pill designed to improve glycemic control in diabetic patients, by 500 per cent in the second quarter of this year, and an additional 50 per cent in the third quarter, according to UBS research. Valeant acquired Glumetza when it bought Salix Pharmaceuticals Ltd. in February.
Other products in Valeant’s portfolio have increased in price, in percentage terms, by just as much, if not more, as the heart medications this year.
http://business.financialpost.com/investing/market-moves/valeant-pharmaceuticals-international-inc-is-tanking-on-research-report
Courtesy of a colleague
Just when it seemed Valeant Pharmaceuticals Inc. was in the clear after being called out by U.S. politicians during a recent drug-pricing controversy, the Laval, Que.-based company is once again in the hot seat as it faces subpoenas from two federal prosecutors.
ReplyDeleteThe subpoenas are the latest indication of heightened scrutiny on the pharmaceuticals business in the U.S., and further test the sustainability of a model that relies on serial acquisitions and price hikes, rather than research and development, for growth.
“I think they poked the bear one to many times with these price changes,” said Matthew Herder, who teaches health law and policy at Dalhousie University in Halifax.
Valeant said late Wednesday it was reviewing subpoenas from the offices of attorneys for the District of Massachusetts and the Southern District of New York. After acquiring two heart drugs in February, Valeant doubled the price of Isuprel and increased the price of Nitropress six-fold.
Over the past decade, a number of small pharmaceutical players have acquired existing technologies and focused on marketing and pricing instead of R&D. Thanks to some high-profile takeovers and takeover attempts, Valeant has risen to become the poster-company for this new era.
http://business.financialpost.com/investing/global-investor/valeant-pharmaceuticals-international-inc-face-fresh-scrutiny-with-u-s-subpoenas-on-drug-prices
Martin Shkreli is a 32-year-old Wall Street whiz kid who likes sunglasses, golf shirts, the hip-hop artist Eminem, a bottle of 1982 Lafite-Rothschild, and jacking up by more than 5,000 per cent the price of a pill used by people who suffer from HIV.
ReplyDeleteShkreli became the poster child for greed and insensitivity in America this week, after news broke that his company, New York-based Turing Pharmaceuticals, had raised the price of the drug Daraprim, which has been on the market for 62 years, from US$13.50 to US$750 — for a single pill.
But even that might not have turned him into a national pariah. It was Shkreli’s reaction to the outrage over the price hike that, in the words of the Daily Beast, caused him to “unthrone the dentist who killed Cecil the Lion as the most hated man in America.”
When one reporter asked him, via Twitter, how he justified the jaw-dropping price hike, Shkreli noted, “It’s a great business decision that also benefits all of our stakeholders. I don’t expect the likes of you to process that.” He added, “You are such a moron.”...
“We think this is a more appropriate price for Daraprim,” he told CNBC. “We’re certainly not the first drug firm to raise prices.”
He added, “Turing is a very small company and a new company and we’re not a profitable company. I think that profits are a great thing to sustain your corporate existence.
“We are taking the revenue from Daraprim and trying to come up with a better, safer and more effective version of it,” he said.
Shkreli backed down a little in an interview late Tuesday.
“We have agreed to lower the price of Daraprim to a point that is more affordable,” Shkreli said Tuesday in an interview with ABC News. He didn’t say what the new price would be...
This is not Shkreli’s first controversy. He got into trouble in his 20s when he urged the U.S. Food and Drug Administration to not approve drugs made by companies whose stock he had shorted.
http://business.financialpost.com/executive/leadership/the-most-hated-ceo-in-america-martin-shkreli-who-raised-price-of-a-single-daraprim-pill-to-us735
Valeant Pharmaceuticals is shaping up to be the next big Wall Street brawl..
ReplyDeleteIts shares soared to new heights earlier this year after investors followed big-name hedge fund managers like William A. Ackman and John P. Paulson into the drug company. Mr. Ackman even likened it to Warren E. Buffett’s Berkshire Hathaway.
In recent months, however, Valeant has lost momentum as media and regulatory scrutiny of its aggressive drug pricing policies has grown. The company disclosed last week that it had received subpoenas from federal prosecutors seeking information about its pricing policies and its distribution procedures.
Against that skeptical backdrop, a research firm’s report that all but called Valeant the pharmaceutical equivalent of Enron hit the stock market like a bomb Wednesday morning.
The report from Citron Research, a favorite of short sellers who bet against stocks, set in motion a tidal wave of selling. At one point, shares of Valeant were down as much as 40 percent.
Citron claimed it had evidence that Valeant was secretly controlling two little-known drug distribution companies, and it speculated that this arrangement was meant to create “phantom sales” and false revenues in an effort to deceive auditors and investors.
Valeant’s biggest shareholders were staring at steep losses by midday, but the stock price recovered a bit in the afternoon after the company issued a news release calling the Citron report “erroneous.”...
And Mr. Ackman, who already owned a 5.7 percent stake in the company, doubled down, buying more than 2 million additional shares, according to a spokesman for Mr. Ackman’s hedge fund, Pershing Square Capital Management...
It has been a difficult time for Valeant, which sells an array of specialty drugs and generic pharmaceuticals. Over the past several weeks, the company, which has its headquarter in Canada, has found itself drawing criticism for its pricing policy for certain drugs amid a broader public concern about pharmaceutical companies taking advantage of consumers by rapidly escalating prices for certain specialty drugs.
http://www.nytimes.com/2015/10/22/business/dealbook/valeants-shares-fall-on-reports-fraud-claim.html?_r=0
Courtesy of: http://www.medpagetoday.com/PracticeManagement/PracticeManagement/54222?isalert=1&uun=g906366d4602R5793688u&xid=NL_breakingnews_2015-10-22
From the comment stream to http://business.financialpost.com/investing/market-moves/valeant-pharmaceuticals-international-inc-is-tanking-on-research-report:
ReplyDeleteValeant to Shkreli, Valeant to Shkreli: Please, please, don't come to our defense,
No doubt you feel you owe us and we feel we owe you but we'll settle up later.
Right now we've got enough grief.
Turing Pharmaceuticals sparked nationwide outrage and government investigations when it raised the cost of a generic drug used for AIDS and cancer from $13.50 to $750 a capsule.
ReplyDeleteToday, a San Diego biomedical company today introduced a competitor to that drug that sells for $1 a capsule.
Moreover, the company, Imprimis Pharmaceuticals, plans to compete against other manufacturers who sell generic drugs far above their cost. Like Daraprim, these drugs tend to be used in niche markets that don't attract much competition.
Turing's drug, Daraprim, is a brand-name formulation of the generic drug pyrimethamine. Turing's CEO, Martin Shkreli, gained notoriety last month when his company acquired the drug and raised the cost by 5,000 percent.
Imprimis' version is a combination of pyrimethamine along with another generic, leucovorin, a form of folic acid. Leucovorin helps cancer patients cope with chemotherapy.
Turing isn't the first company to suddenly raise the price of a generic drug.
Valeant Pharmaceuticals became well-known for the practice. It raised the prices of two heart drugs, Nitropress and Isuprel, by a respective 212 percent and 525 percent immediately upon acquiring them.
Valeant also raised the price of the San Diego-originated heartburn drug Zegerid by 550 percent this year, according to Deutsche Bank. Zegerid was developed by San Diego’s Santarus, which was bought in November 2013 for $2.6 billion by Salix Pharmaceuticals. Valeant purchased Salix in March of this year for $11 billion.Valeant's actions provoked a storm of opposition, including criticism from those inside the pharmaceutical industry.
- See more at: http://www.sandiegouniontribune.com/news/2015/oct/22/imprimis-turing-daraprim/#sthash.BCtRTo7s.dpuf
Valeant Pharmaceuticals International, a drug maker whose aggressive pricing practices have made it a lightning rod for criticism, said on Friday that it was ending its relationship with a pharmacy used to bolster sales of some of its expensive drugs.
ReplyDeleteValeant, based in Laval, Quebec, said in a statement that it was “severing all ties” with the pharmacy, Philidor Rx Services, and that Philidor had “informed Valeant that it will shut down operations as soon as possible.”
The move came after the three largest American drug benefit managers, Express Scripts, CVS Health and OptumRx, said on Thursday that they would stop paying for drugs dispensed by Philidor, which is based in Hatboro, Pa.
Questions had been raised about Valeant’s practice of encouraging doctors to have prescriptions filled by Philidor, rather than by independent pharmacies, making it harder for pharmacists and insurers to substitute a less-expensive drug.
Valeant acknowledged last week that it had bought an option to acquire Philidor, which dispenses some of Valeant’s dermatology drugs, contributing 6.8 percent of Valeant’s third-quarter revenue.
Critics on Wall Street, led by Citron Research, have argued that Philidor and related units could have been used by Valeant to inflate its sales and drive up its stock price. Valeant denied that it had used Philidor to improperly pad quarterly financial results.
Nonetheless, the relationship has raised questions about Valeant’s accounting practices, because the company disclosed its Philidor ties only after an investigative reporter learned of the arrangement, even though Valeant bought the option to acquire the pharmacy last year…
Valeant’s news release did not specify what allegations Mr. Pearson was referring to. But The Wall Street Journal and Bloomberg News, citing internal Philidor documents, have reported this week that the pharmacy’s workers were instructed to use a variety of questionable methods to try to get insurance companies to pay for Valeant’s drugs.
These included altering doctors’ prescriptions to specify that the Valeant brand-name drug, and not a cheaper generic, be used. Another tactic was to lower the price of a drug until an insurance company agreed to pay, then try to raise it again to get more reimbursement.
Employees were also said to be instructed that if a health plan would not pay for Philidor drugs they instead use identification numbers from an affiliated pharmacy. One such affiliate, R&O Pharmacy in California, has claimed in litigation that Philidor was improperly using its identification numbers.
http://www.nytimes.com/2015/10/31/business/valeant-pharmaceuticals-philidor.html?_r=1
Notably, the senators called for a face-to-face meeting with Turing Pharmaceuticals CEO, Martin Shkreli, "as soon as it is practicable." Shkreli has become the public face of the pricing controversy, after his company raised the price of Daraprim by 5,000 percent after obtaining rights to the drug. The drug is the only U.S.-approved treatment for a deadly parasitic infection called toxoplasmosis.
ReplyDeleteTuring said in an emailed statement: "We are reviewing the committee's request and, as we have and continue to do with similar congressional inquiries, we look forward to having an open and honest dialogue about drug pricing."
Separately, Democrats in the House of Representatives called on their Republican colleagues to summon the CEOs of Turing and Valeant to a congressional hearing and issue subpoenas to collect documents from their companies.
Valeant is already under investigation by several members of Congress for its general business strategy, which involves buying smaller drug developers and then jacking up prices on their medicines.
Both Turing and Valeant have also received multiple subpoenas from federal prosecutors seeking information about drug pricing and other policies.
Senators Susan Collins, R-Maine, and Claire McCaskill, D-Missouri, said a hearing on the issue is tentatively scheduled for Dec. 9. Collins chairs the aging committee and McCaskill is its ranking Democrat.
"We need to get to the bottom of why we're seeing huge spikes in drug prices that seemingly have no relationship to research and development costs," said McCaskill, in a statement. She added that some of the increases resemble "little more than price gouging."
http://www.nytimes.com/aponline/2015/11/04/us/ap-us-senate-drug-pricing.html?_r=0
Democrats, led by Elijah Cummings in the House and Bernie Sanders in the Senate, have taken aim at both companies, using them to symbolize rising anxiety over the cost of health treatments. For nearly a year, Cummings has sought internal documents and called for hearings through the Oversight Committee, where he’s the ranking member. Valeant and Turing have thus far resisted the document requests.
ReplyDeleteThe Senate launched a bipartisan investigation of Valeant, Turing and other drugmakers this week. But although the House Oversight Committee agreed unanimously to investigate prescription drug prices at the beginning of the year, Chaffetz has refused every request to compel documents, issue subpoenas or schedule hearings. …
Given the Republican majority, without Chaffetz’s support, no investigation will be authorized. On Tuesday, Chaffetz said he planned to hold hearings on drug costs at some point, but his spokeswoman told the Washington Examiner that no hearings were scheduled.
Chaffetz has received substantial support from the drug industry over the years. Pharmaceutical companies were the top contributor to his campaign in the 2014 election cycle, and no. 2 so far this cycle, according to the Center for Responsive Politics. Overall, pharmaceutical interests have donated over $198,000 to Chaffetz during his career, more than any other industry. He has consistently voted against access to affordable prescription drugs throughout his career, according to the organization Progressive Punch. …
The industry has already benefited. When Chaffetz said Tuesday that Valeant would not be the sole subject of any hearings, the price of its stock, which has been battered amid the scandal, jumped three points.
http://www.truthdig.com/eartotheground/item/rep_chaffetz_uses_house_leadership_power_to_shield_20151105
You may not know it, but you could be on the hook to pay at least $124 this year for a drug you probably don’t take.
ReplyDeleteThe drug is a new class of cholesterol-lowering agents called PCSK9 inhibitors. Its cost and how we are paying for it illustrate why we all need to care about not only our own health care bills but also those of our neighbors. And it helps focus the debate about drug prices on two questions: What is the value delivered by the drug, and can that be linked to its price? And how should such value-based prices be implemented?
In July, the Food and Drug Administration approved the first of two new PCSK9 inhibitors that lower the bad type of cholesterol, LDL. Studies suggest that they can reduce it by up to 60 percent, compared with a placebo, and reduce it up to 36 percent more than statins and a drug called ezetimibe. However, there are no definitive data on how much these drugs actually reduce heart attacks, strokes and deaths from heart disease. Researchers suggest they might decrease the likelihood of such bad outcomes. For example, one preliminary study found that taking the drug lowered the overall chances that a patient would experience a heart attack or stroke, or hospitalization or death from heart disease, to 1.7 percent from 3.3 percent. The definitive studies will be out in 2017.
Drugs like these can help us lead longer, more productive lives. The problem is that the companies producing these drugs — Amgen, Sanofi and Regeneron — announced that the retail price for a prescription would be more than $14,000 per patient per year. The price is particularly steep given that these drugs may need to be taken for the rest of the patients’ lives. How much patients pay directly would depend on their insurance plan.
But the high prices insurers will have to pay will eventually be reflected in higher premiums for all of us. According to a recent article in The New England Journal of Medicine by Kevin A. Schulman and his colleagues at Duke, even if the price came down to about $11,000 per patient per year, and only 1.1 million of the roughly 23 million middle-age Americans with high cholesterol actually took these drugs, the bill would be so high that for a typical insurance plan, “annual insurance premiums would increase by $124 for every person” in the insurance plan. The authors point out that “taxpayers will have the additional burden of paying for similar increases in” the costs for Medicare to cover such drugs. The same is true for Medicaid and the Veterans Affairs department...(continued)
(continued) Someone — even if it’s a less than sympathetic insurance company — still has to pay the full bill. A growing chorus is arguing that we should start paying for value in health care. Paying for value is the common-sense idea that prices should be linked to benefits; high prices would have to be justified by high health benefits.
ReplyDeleteWhat would paying for value look like in the case of PCSK9 inhibitors? We have estimates of the benefits in terms of lowering risks from cardiovascular disease. At what price would those benefits be a good value?...
But as these PCSK9 inhibitors make clear, it is not just patients’ perspectives we need to take into account. Patients get the benefits, but all of us are paying the bill...
The high costs are hidden in our ever-increasing insurance premiums and taxes. Because we all pay, all Americans have to have a voice in determining value.
As the PCSK9 story is making clear, the drug cost debate is now beginning to focus on two questions that are currently unresolved: First, how do we determine value so the perspectives of all Americans are considered? Second, how do we implement and enforce that determination of value? ...
The traditional answer to the first question is to determine the cost-effectiveness of the new drugs by assessing how much they improve the lives of patients measured by quality-adjusted life years (QALY)...
The answer to the second question is just as unsettled. Many people hope that the drug industry will self-regulate, using value-based pricing of its new drugs. But if past experience is any indication of future behavior, self-regulation may be a pipe dream. Recent price increases for generic drugs long off patent and patented drugs in which there is no additional research aren’t encouraging signs.
http://www.nytimes.com/2015/11/08/opinion/sunday/i-am-paying-for-your-expensive-medicine.html?_r=0
Courtesy of: https://www.doximity.com/doc_news/v2/entries/2378539?_r=1&_ref=digest&doc_news_entry_title_id=1049941&signature=06160a3ecc13ec73dd95b78384ee0d0278c84976&token=b2b50d18e510a923d520205cb79983dcaf2224d2&user_id_hash=bbc6382dda844d144bc28f7c68706d5f25773072