Some drug pricing updates

Just a couple of drug pricing updates this morning as I wait for the coffee to finish brewing:

Gilead (WSJ) has a new Hep-C drug that is good for all the major subtypes of the virus:

Gilead Sciences Inc. received U.S. Food and Drug Administration approval for its Epclusa hepatitis C combination drug and priced the treatment below its older drugs for the disease.

It is being priced at roughly $75,000 wholesale so with discounts that most insurers get, the total cost of the treatment regime is probably south of $60,000 on average. The interesting thing to me is that it is a better drug but cheaper. The big thing in the Hep-C space is that there are several viable near substitute cures available now so there is some downward price pressure.

As more and more states and Fedeal insurance programs/regulators are mandating that anyone with Hep-C get access to these cures, that is creating a huge pool of people who are eligible for them. This is producing a strong incentive for other pharmacy companies to introduce “me-too” drugs to get in on the gravy train.

Next is Crestor (Stat News):

But AstraZeneca filed a lawsuit on Monday claiming the US Food and Drug Administration is on the verge of illegally broadening the indication for its best-selling Crestor cholesterol pill, and the move would unfairly allow generic competition.

The argument, which the company also made late last month in a citizen’s petition, hinges on the interpretation of federal law governing product labeling. Depending upon the outcome, AstraZeneca may either maintain a monopoly on Crestor for another seven years or face lower-cost rivals to a key revenue stream when the Crestor patent expires on July 8…
Last month, the drug maker won FDA approval to sell Crestor to treat children with a rare genetic disorder called homozygous familial hypercholesterolemia or HoFH, which causes very high cholesterol. Under the Orphan Drug Act, the company was awarded an additional seven years of marketing exclusivity for Crestor, but only for treating this particular rare, or orphan, disease.

The FDA wants to allow generic manufacturers to not label their version of Crestor with any pediatric information. Brand Crestor would still be the authorized drug for HoFH although after six months to a year, most doctors who treat HoFH will have enough dosing data from brand name Crestor to figure out what how to prescribe the generic versions at a far lower co-pay/co-insurance for their patients. The FDA proposal would allow the generics to compete for the vast majority of usages of this drug class which would lead to much lower costs.

AstraZeneca wants a ruling that states that generics must have the entire label instead of a condensed/restricted label. That rule would protect this tiny carve-out market while also denying the generics access to the massive money making market of adult statin.

And finally general Rx data:

33 replies
  1. 1
    PopeRatzo says:

    $60,000. That’s what a drug that could save my life will cost. And I have to eff around with insurance companies begging them to let me have it. Do I bankrupt my family and mortgage my daughter’s future or stay alive? $60,000? It might as well be a million dollars. There might as well be no cure at all.

    I’m moving to Texas next month, and Aetna will be my new insurance company (replacing United Health Care). I’m in the middle of this fight right now and I hate it.

  2. 2
    Villago Delenda Est says:

    @PopeRatzo: Well, you could always go the Walter White route to raise funds. That should work out splendidly, and also it will insure that hookers and blow will flow in the pharmaceutical company’s board room. I’d say that’s win-win!

  3. 3
    TriassicSands says:

    AstraZeneca. The NYTimes had an article about AZs efforts to maintain patent protection for another 7 years. It sounds like they have an uphill battle as similar past claims by others have failed. And they should. Drug companies abuse the patent system in a manner so routine it’s hard to even call it abuse — just business as usual.

    Crestor is a remarkably effective statin. However, it has had its run as a blockbuster drug earning billions of dollars a year for its maker. It is now time to let it make the transition to a generic drug. That way AstraZeneca will have the incentive it needs to develop new and more effective drugs. Otherwise, they’ll probably just spend the next seven years trying to figure out a way to get Crestor’s patent extended for yet an additional seven years. Why do research when you can pay lawyers to make shit up?

  4. 4
    Mnemosyne says:

    Yet another reason to work and make this year a wave election to get a Democratic House and Senate. The Obama administration has been doing its best, but there’s only so much you can do from the executive branch. This needs laws, not just regulations.

  5. 5
    Mary G says:

    Humira, Enbrel, and all the biologic drugs for RA are always going up. Two years ago, my Rituxin IV was billed at $33,000 and Medicare and my supplemental insurance paid around $7,000. The treatment this year was billed at $40,000 and they paid $8,000 or so. It’s the only drug that kind of works for me; I have been on every other one and either they stopped working after three or four years or didn’t work at all. Somehow I suspect that the nurse that administers it didn’t get that much of a raise.

  6. 6
    Mnemosyne says:

    Also, too, it ain’t just lifesaving drugs. The cream I used to use for my rosacea went from $125 a tube to $1,000 a tube and my insurance stopped covering it.

  7. 7
    jl says:

    Thanks for a very interesting post and links.

  8. 8
    Miss Bianca says:

    To me, it has always seemed obscene that drug companies are allowed to make such enormous profits battening off the desparation of chronically/mortally ill patients. But then, a for-profit health care system has always struck me as obscene as well. I wish there were a less-profit-driven model for development of therapies and drugs. Also, too, I wish that prescription drug advertising were flat-out BANNED on TV and in other media.

    And don’t get me started on those damn kids on my lawn.

  9. 9
    Mnemosyne says:

    @Miss Bianca:

    I may get myself in trouble with this question, but I was surprised at the heavy rotation of TV commercials for a sleeping pill for the totally blind (people who can’t perceive light at all). Do blind people really watch enough TV that they would hear the commercial and be like, Yes, I should speak to my doctor about this new drug!

    I mean, it was kind of interesting to hear about circadian rhythms being affected by total blindness, but how much of their target demographic were they really reaching?

  10. 10
    Prescott Cactus says:

    @Mnemosyne: How true !

    We have made such great strides in raising the level of insured and making health insurers limit salaries and admin costs. Next up needs to drug makers.

    At the end of some AstraZeneca TV ads, “if you can’t afford XXX, AstraZeneca may be able to help.”

    Hey, quit blowing money on TV ads and price your product reasonably. Astra CEO Pascal Soriot’s bonus and long-term incentives amounted to 580 percent of his salary. Soriot’s pay was 64 times that of the average employee at London-based Astra. That’s $12.46 million for 2015. . .

    Pitchforks and torches.

  11. 11
    Mike J says:

    @Miss Bianca:

    Also, too, I wish that prescription drug advertising were flat-out BANNED on TV and in other media.

    The AMA agrees with you.

  12. 12
    jl says:

    Center for Economic Policy Research has a page with some interesting reports on ideas to reduce costs of drugs through alternative mechanisms to fund research and reform the current US (historically extremely outlandlishly extremely corporate friendly) IP law.


  13. 13
    jl says:

    @Prescott Cactus:

    ‘ At the end of some AstraZeneca TV ads, “if you can’t afford XXX, AstraZeneca may be able to help.” ‘

    The drug companies understand the economics of sunk R&D costs and they know that, wherever they can use price discrimination to distinguish different people by ability and/or willingness to pay, and get a new customer, then they are maximizing profits if they can sell one more pill at just a little bit more than it costs to stamp one out. So, that kind of talk is more big drug company propaganda for the masses.

  14. 14
    Calouste says:

    @Mike J: Prescription drug advertising is banned in almost all industrialized countries, New Zealand is the only other exception.

  15. 15
    Prescott Cactus says:

    @jl: Besides the bullsheet propaganda, it’s the price gouging.

    An asthma inhaler purchased in the US should be the same as one bought in Mexico or France. I’m more than happy to allow for currency variations that cause minor pricing fluctuations. Pricing per country shouldn’t vary ! Put that in NAFTA or TPP.

  16. 16
    jl says:

    @Prescott Cactus: the problems with US pricing of drugs and medical equipment is complex mess of a very historically (both in the US and internationally) corporate friendly patent law regime in the US, lack of price transparency, local provider monopolies, and extremely concentrated distribution system, and IMHO, a system of legalized corruption and bribery that has been allowed to develop in the distribution system, and between patent holders and generic drug manufacturers. And a regulatory system that has not kept up with developments in the economies of scale in drug manufacturing.

    So, it is going to take a long complex slog to get it fixed. Fixing just one thing, like lack of price transparency, could make things much better for some, and much much worse for others. I don’t know what prospects are for a quick fix. Both HRC and Sanders deeply disappointing to me in their approaches, at least in terms of getting something useful done in short and medium term in the US.

    Edit: and I think will take international cooperation to fix it, since so much international production of the pills themselves. The field of international drug regulation for health, safety and efficiency basically doesn’t exist. I might know, I’ve tried to research it. Almost no easily available info out there. You literally have to now a guy/girl who knows a guy/girl to put you in touch with a guy/girl halfway around the world who can tell you what is going on for specific drug or county.

  17. 17
    Miss Bianca says:

    @jl: is this sort of thing not covered in the TPP, for example?

  18. 18
    Mike J says:

    In other health news, Republican Chris Sununu (who is running for gov of New Hampster) cast the swing vote to restore funding for Planned Parenthood, after he was the swing vote last year to cut it off because of the faked videos.

  19. 19
    jl says:

    @Miss Bianca: A lot of TPP is about pushing the historically very extremely corporate friendly patent law regime onto the rest of the world. So, probably TPP goes in the wrong direction on that score. Not noted much, but smaller US and foreign drug and medical equipment companies were dissidents in TPP negotiations, since they thought the negotiations would vastly favor large corporations at their expense, which would reduce domestic and international competition and small company innovation. I watched a youtube of a talk Joseph Stiglitz gave at a side meeting at the negotiations, and at one point, large US companies had pasted large sections of US patent and drug law verbatim into the treaty provisions. Don’t know whether that is still the case.

    TPP goal on this issue it to impose US system on rest of the countries in the agreement.

  20. 20
    Miss Bianca says:

    @jl: Disappointing! Maybe further TPP scrutiny will lead to some pushback on that particular issue, altho I plan to keep breathing…

    @Mike J: Ha! You think he noticed that it is suddenly becoming unfashionable to oppose funding and access to womens health?//

  21. 21
    Mary G says:

    @Prescott Cactus: One thing the drug companies do with new drugs that I think is particularly pernicious, along those “we may be able to help” lines, is give either a huge discount, or even free to people who don’t think they can afford the co-pays, some for six months or even a year. After that expires, tough luck. It is hard to give up something that is helping you and they count on people lobbying their carrier to cover it more.

  22. 22
    Prescott Cactus says:

    @Miss Bianca:
    The only reason I don’t think it is is that Big Pharma would be howling like wolves.

    I’d like a system along the lines of what the demons of Bentonville, AR use. Wallymart squeezes their suppliers like no other. If they found out a supplier was selling a paint brush to Home Depot for two cents less there would by hell to pay. Our FDA should do the same. If an Aussie is getting a better deal on drug XYZ, we should get that same deal in the good ol’ US of A. The size of our health care system would allow us to have that clout. We just need someone to use it.

  23. 23
    jl says:

    @Mary G: Yes, Doctors and pharmacists actually have classes on how to game out that kind of thing, for those who plan to set up ‘price clinics’ that figure out how patients can pay for their meds.

  24. 24
    jl says:

    @Prescott Cactus: In the health care biz, that is called ‘reference pricing’. I think Richard has a few posts on it.
    Problem with that approach, as a stand-alone reform, is that a lot of the hardship case discounts would disappear. Reference pricing leads to more price transparency, reduces drug companies’ ability to apply price discrimination to a large enough segment of the market. The pricing structure changes from a continuum of prices for patients/health provider, matched to different ability/willingness to pay, to a few focal prices.

    Total amount of drug produced is reduces below efficient level. Many would have to pay higher prices or not get drug at all.
    The US health care system is a complicated shit-mess, which is why HRC’s tinkering with something that she assumes works and will continue to work OK, and Sanders’ pie-in-the sky approaches are not very useful. The country needs better leadership on health care reform and it is not getting it.

  25. 25
    Uncle Cosmo says:

    @Mnemosyne: IMO you’re looking (pun intended) at the wrong demographic. Those ads are intended for the families & caregivers of blind people. Because–wait for it–the blind don’t know (& probably don’t care) that it’s dark out & they’re supposed to be resting (& not moving around) during that time. For them it doesn’t matter what time of day they’re active. But it sure as shit matters to families & caregivers who are living in a rhythm ruled by the ebb & flow of light–& who consequently would love to be able to pop their blind charges a pill in the evening that would reliably immobilize them for the convenience of the sighted. Y’think mebbe?

  26. 26
    Prescott Cactus says:

    @Mary G: I was never sure what “we may be able to help” actually meant or how they would slice / dice and chop the requirements.

  27. 27
    Mnemosyne says:

    @Uncle Cosmo:

    The wording was aimed directly at patients, though, not at caregivers. I’m willing to accept it could be an actual problem because blind people have jobs and school commitments just like sighted people do, but it seemed like a weird TV campaign.

  28. 28
    Roger Moore says:

    @Mike J:

    The AMA agrees with you.

    Of course that isn’t entirely out of the goodness of their hearts. If the drug companies aren’t allowed to advertise directly to patients, the only way they’ll be able to sell their wares is by convincing doctors to prescribe them.

  29. 29
    Robert Sneddon says:

    @Roger Moore: That’s how it works in the UK where direct advertising of prescription medicines to the public is against the law. Instead medics are offered free attendance at a three-day residential colloquium on prescribing for elder care in a four star hotel with an open bar and an 18-hole golf course next door. It still works out a lot cheaper than buying prime time slots for TV adverts every weekday.

  30. 30
    Ohio Mom says:

    Looked for Prolia on the list, didn’t see it. It’s a twice yearly shot to prevent osteoporosis. According my EOBs, the price doubled last year from $1,000 to $2,000. It is criminal.

    Makes my blood boil, really. Guess UHC figures any eventual broken hips will be Medicare’s problem, not theirs. Or at the rate things are going, Medicaid’s.

  31. 31
    Prescott Cactus says:

    @Robert Sneddon: In the US we pay for the TV time, 4 star hotel, open bar, but the golf course is 1/2 a mile away.

    In Canada a drug company is currently running an ad with a silky dressed young lass on a bed awaiting a gent who emerges from the bathroom wearing only his boxers and knee high socks. She asks about the socks. Cue the picture of a foot with toe nail fungus. . . AND the admonition that toe nail fungus is transmittable. . . What’s next, toe condoms ?

  32. 32
    jl says:

    @Prescott Cactus:

    ” AND the admonition that toe nail fungus is transmittable ”

    That sounds like a technically true but functionally dishonest part of the ad. AFAIK, it is contagious, but the fungi that cause it are almost everywhere. Much more likely to catch if from wearing dirty socks or wet gym shower floor than someone else’s toes directly, I think. Any doc here knows different, fill me in on it.

  33. 33

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