Humira’s Drug Formula: Start at a High Price, Go Higher
nytimes.com
nytimes.com
Fortunately for me, I live in the UK, where the NHS is able to help absorb these costs. In the US, I guess they aren't so lucky - if I lived there, my Humira treatment would financially destroy me - and probably my entire family, too. It's morally reprehensible for a company to have access to such a life-changing treatment and then proceed to charge such disproportionately vast sums of money (certainly, far beyond the cost of R&D).
I suppose you could say that instead of crippling its patients physically (like their medical problems do), Humira cripples its patients financially - and I'm not sure that's a great deal better.
What makes you say that?
Either private insurance would cover it, or Medicaid (for low income people) or they essentially give it away to uninsured people through a non-profit foundation. (AbbVie Patient Assistance Foundation)
Certainly, if you were to flick through various forums for those with Crohn's disease (e.g. [1]), you'd find many stories of people paying hundreds (or even thousands) of dollars for a month's Humira treatment.
[1]: https://www.healingwell.com/community/default.aspx?f=38&m=22...
That's for the lowest benefit, qualifying ACA plans and assuming the prescription is covered. The "cash" price is ~$4000 a month (https://www.goodrx.com/humira ) so even the lowest benefit plans are kicking in quite a bit of support (but probably also negotiating the price down quite a bit).
BTW before my transplant a single one of my meds (phosphate binder) was around £500 a month god only knows what serverlamer costs in the states - let alone the cost of my transplant.
My girlfriend has lupus - diagnosed at eight. The lupus destroyed her kidney by her fourteenth birthday. She got a transplant at sixteen. Her transplant was covered by her mom's insurance with the rest of the costs falling onto our state's medicaid because she was a minor and her mom, an RN, was not well to do. Her medications were also covered by her mom's health insurance and picked up by our state's medicaid program.
She and her mom moved to another state when my girlfriend turned seventeen, so from that point it was her mom's insurance picking up the medication. She and I started dating when she turned eighteen. At that time, all of her drugs, including anti-rejection medications, were $5 per 90 day supply at the local pharmacy under her mom's insurance.
Her mom lost her job when she was 21, so my girlfriend lost her insurance and was unable to afford COBRA. My girlfriend did not qualify for medicaid in this new state because she was not a minor, pregnant, or considered disabled by the federal government despite not being able to work with the lupus. At this time, our best option for her medications were discount mail order pharmacies, which cost $1000 per 30 day supply, which we could barely afford with my computer programmer salary, as I could not add her to my insurance due to us not being married.
For awhile, she was on PCIP and then a plan made available on the ACA exchange. Her premiums were $400 per month, and that made her prescriptions $20 per 90 day supply. So it brought the costs from $1000 per 30 day supply to about $450 per month, counting insurance. We managed to make this work for a few months before I was laid off from my programming gig and lost my insurance.
We moved back to the state she moved from due to a job offer. She still did not qualify for medicaid, but my new job allowed me to add someone to my insurance if we were married or domestic partners. So we got a domestic partnership, and her drugs now again cost $5 per 90 day supply.
So I've been with someone on both sides in America - good insurance, no insurance, basic insurance, and then good insurance again. We really need to find a better system. We've survived by luck and really tight financial planning.
What state was this in? In Maryland, a single individual is Medicaid eligible up to an income of $16,600/year. There are 18 states where non-disabled, non-pregnant adults are not covered by Medicaid. That's not an "America" problem, it's a problem with those states and their voters.
She was recently determined medically disabled by the federal government and now just needs to get through the financial eligibility steps.
“Perhaps no other Federal Government program can lay claim to have saved as many lives as the Medicare end stage renal disease (ESRD) program.” https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4194691/
Kidney failure is in fact the best example of the US government stepping in to provide universal coverage for a life saving treatment (even though it requires copays, but there are also patient assistance programs to help with that; see below).
A different question is that the system has many issues, see for example [0] and the recent figth between private insurers and dialysis clinics due to the assistance provided by charities which are funded by the dialysis companies that help patients to pay for commercial insurance (reimbursement from private payors is much higher, even though most patients are on Medicare they are not profitable).
[1] https://www.propublica.org/article/in-dialysis-life-saving-c... [2] https://www.barrons.com/articles/insurers-press-dialysis-cla...
a natural result of the having an organisation that represents 65 million, backed up by leading researchers, instead of each individual completely on their own
40mg/0.8ml soln for inj in vial (for paediatric use), 2=£704.28.
40mg/0.4ml soln for inj in pre-filled syringe or pre-filled pen, 2=£704.28.They have a co-payment plan that, for the most needy, would effectively make the drug free. For me, my insurance gets billed a few thousand and I would have a $250 copay, which they pay.
It makes me wonder though, has anyone ever paid the full price, or is it just astronomically high to maximize the ‘charitable’ deduction side of their business?
It's shocking to see the bill before insurance pays it's share. I was getting bills for $25k. !!!
As for giving money to scientists/doctors/researchers, that isn't really the case either. See [1] - the cost of prescription medication appears to be largely determined by "what the market will bear", rather than how much a drug costs to research and develop.
[1]: https://jamanetwork.com/journals/jama/article-abstract/25456...
However, presumably the treatment is "worth" the NHS paying for it - even if it is massively overpriced. I can't really pass comment on their medication choices.
I understand, what the market will bear. But that's for everything ? (market bearing rents in sf)
Still, drug companies are more prone to invest their $$ in drugs compared to landlords, don't you agree ?
Of course I'm not ok with spending 30% on rent + 30% on meds. But it's more insane that we do on rent, I think (or move house and commute 2 hours, waisting your life)
Now, if you're talking about spreading the cost of all medical care across the entirety of the working-age population (essentially, national insurance) - that's a more sensible proposition. In fact, that's (broadly speaking, of course) what the NHS does in the UK - and the system works quite well.
I don’t really understand. If there is a moral obligation to help cure other peoples’ diseases, shouldn’t it be even more morally reprehensible to spend billions on things like TV serieses, cell phones, and social media websites, which could’ve been used to cure diseases instead? By your logic, isn’t Apple like the most evil company in the world, because they spend billions of dollars that could be used for drug research on making iPhones instead? Why is it somehow worse to make a profit curing people, than to make a profit not curing people?
There's also the fact that public health is not a simple economic market, where customers can simply not buy your product. In a lot of cases, it is a life or death situation, and real human have to be treated, so it should be considered a public service.
It’s not like the treatment was just out there until AbbVie monopolized it. Chron’s disease was medically characterized in 1932. Anyone could’ve come along and developed this treatment and gave it away for free or cheaper.
> lobbying against legislation that would make prices reason able...
That just begs the question of what’s “reasonable.” What single payer does is create a monopsony (single buyer situation). Obviously it lowers prices, that’s what monopsonies do. But like it’s counterpart, the monopoly, it’s economically inefficient.
"If you're in the health sector don't prey on sick people" is as good a place as any to draw that line.
What's your point? That since phone companies don't try their best to cure the world, nobody should do it?
[1]: https://jamanetwork.com/journals/jama/article-abstract/25456...
Prices are what makes supply equal demand.
Blockbuster successes, massive profit makers are what pays for all the many, many failures of drug development. There’s quite a bit of research on the economics of drug development but the thing that I find the most convincing is that the big drug companies aren’t exceptionally profitable. They’re pretty much in line with what you’d expect of multinationals of their size, 10% or so profit on revenue per year. Scientific publishers like the accursed Elsevier earn supernormal profits, 33%.
Add to that their particularly hostile approach to patent applications (100+ on Humira alone), and to me it appears that AbbVie perhaps has a vested interest in stifling innovation and charging large amounts of money for their products "because they can".
The point about the pharmaceutical sector’s profit margins is about the sector more than it is individual companies. Minnows that make supernormal profits expand and as they expand their profit margins decline because they use up the most profitable opportunities and move on to less profitable ones until there’s nothing left. This last bit never actually happens because things change fast and general equilibrium is never reached but that’s the tendency. Large profit margins attract competitors and in the meantime allow those enjoying them to grow.
Re: “Profiteering”
According to the theory of neoclassical economics, anti-price gouging laws prevent allocative efficiency. Allocative efficiency refers to when prices function properly, markets tend to allocate resources to their most valued uses. In turn those who value the good the most (and not just the wealthiest) will be willing to pay a higher price than those who do not value the good as much.
AbbeVie runs what is called a co-pay assistance program where they pay the difference between your insurance coverage and your copay. So they book a sale at full-price, paying (full price - (amount covered + $5 )) and they get to deduct the money they payed to themselves as a "charitable contribution".
Which is so many flavors of shady. For a drug that costs literally pennies per dose to manufacture.
For instance, when it became clear that the tax reform threatened universities using funds "to be paid to PhD students" to their own general fund ... the protests against that on hacker news were deafening.
But yes, this is pretty shady.
Say, your employer demanding access to the tools you need for your job. That desk chair ? 20$/month. Computer ? 200$. Screen ? Another 30$.
That would be just peachy wouldn't it ? Oh wait. That's illegal by law.
Pennies per dose for a biologic?
And consider that most of the research on which Humira, Embrel etc. came from was sponsored by the US Taxpayer.
To be specific, Humira was developed from research by BASF Bioresearch (bought by Abbott) and a research consortium in the UK, so credit to the UK taxpayers is warranted; I’m not sure about the US side.
Nevertheless, government sponsored research largely does not cover the development of the drug, and those costs are somewhere in the hundreds of millions USD range on up.
It’s a complex system and the price increases are used in part to negotiate with the intermediaries like PBMs.
Biologics are a special case also due to complexities in how they (and biosimilars) are regulated, manufactured, and exclusivity periods they are granted. They certainly are not a few cents a dose to make.
Not a satisfying answer, and apologies for that, but it’s difficult to traverse with anything approaching brevity.
A biologic production line requires extensive upkeep: it is a living product. Costs all around are higher. There are also Phase IV activities to consider.
Bottom line, all else being equal, biologics cost more than small-molecule drugs to make and distribute.
The deeper problem is that we aren't getting newer better drugs. Once a blockbuster like Humira happens, it seems to kill off the field. This is mostly because you need to spend a lot to do a massive trial to show your Humira 2.0 is better, with no guarantee it will actually be better. The economics are very hostile. Pharma tends to do smaller trials with their new drug in more select populations eg those not responding to Humira, and therefore end up having a much smaller market if the drug works.
Drug pricing should be re-engineered to encourage more development rather than the opposite. If better alternatives exist then pharma obviously won't be able to charge extortionate prices.
Source? My casual understanding of American pharmaceutical R&D is the majors drive profits into acquiring successful biotech companies, which in turn drives investment in a thriving biotech industry (which tends to do the early-stage research). This model pushes economic gains to research risk takers and lets the majors focus on marketing and distribution, a decent division of labour.
Actually what kills the field is effective drugs losing exclusivity. While the best-in-class treatments have patent protection R&D investment in the same therapeutic category is less risky than when you have to come up with something much better than the unexpensive generic/biosimilar already available.
1. Patent a drug 2. Make inconsequential changes 3. Patent it again 4. Repeat
I don't have any first hand experience in the industry so I don't know if this is a serious problem. I don't even know if it has a name!
https://www.bloomberg.com/news/articles/2017-09-07/this-shie...
TL;DR Humira is protected by over 100 patents, covering how it's produced etc. That's partially what's preventing other companies from coming up with a replacement, despite the main patent having already expired.
If you want patent free medicine I suggest at least looking at what medical research looks like without the possibility of supernormal profits on some drugs to make up for the losses on all the many, many other drugs that don’t make it. One plausible model would be how the Soviet Union did drug development but I know very little about that bar that the pschopharmacologicals in Russia etc. are in some respects quite different from those used in the West.