An effective eye drug is $50, but many doctors choose a $2,000 alternative
washingtonpost.com
washingtonpost.com
"Ophthalmologist here.
As a physician responsible for prescribing and injecting these drugs, I can tell you that this article glosses over the single most important factor involved in deciding between the three currently-available Anti-VEGF options: compounding pharmacies, and the lack of regulation thereof. Any Ophthalmologist at this point is very familiar with the results of the CATT study which confirmed the equal efficacy and safety of bevacizumab (Avastin) and ranibizumab (Lucentis). The reality is that the actual drug injected into the patient's eye either comes from the manufacturer in a sterile, ready-to-inject form (Lucentis), or an appropriate amount was prepared for intraocular injection by a local compounding pharmacy (Avastin).
Compounding pharmacy regulation is notoriously poor, and the risk of an intraocular infection is not one many retina specialists are eager to take unnecessarily. Endophthalmitis frequently leads to blindness, even with early diagnosis and treatment. As much as everyone wants to think doctors are only interested in lining their pockets, the reality is that most of us simply don't want your grandparent going blind in one eye because a minimum-wage tech at a compounding pharmacy failed to follow appropriate sterile procedure. The American Society of Retina Specialists have been advocating for increased regulation of compounding pharmacies since Lucentis became available. Check out their website.
I guess I should also point out that we get paid the same for injecting any medicine into the eye, regardless of the cost of the drug. And we purchase and stock both drugs in the clinic, and bill insurance for whichever is used. So we don't benefit financially for injecting one versus the other."
http://www.reddit.com/r/politics/comments/1sdxz6/an_effectiv...
It's not a $50 drug that treats as well as a $2,000 drug. It's a drug sold in large doses to treat cancer apportioned to a small dose to treat blindness.
Complaining about Genentech's price structure in this case doesn't make any sense. It's like complaining that a restaurant won't sell you half-sized portions at half price. It totally ignores the underlying cost structure of the industry.
In the case of my hypothetical butcher, he would be out of business, as the free market will push prices down. In the case of Genentech, using patent monopoly and regulatory procedure as a weapon nets them massive profit.
With pharmaceuticals, cost is highly unlinked with volume. Marginal cost is almost nothing, but fixed costs are very high. Its like the restaurant: because most of the cost of the product is overhead and per diner rather than the food cost, half as much food sells for way more than half the price. This is true even though restaurants are in highly competitive markets.
They took the previous development costs and research for the cancer drug, made some relatively minor optimizations for ophthalmologic application, and packaged it appropriately. It probably cost them a few million to go through the regulatory process.
End result is that Doctors can write prescriptions on-label and avoid compound pharmacies (eliminating risk) and Genentech makes $1B/year, mostly off of Medicare. The only "fixed cost" is the cost to the Medicare taxpayer.
A quick search found this page which lists all the studies and trials they did, including 3 year followups of the Stage III efficacy trials (pretty much required for this sort of drug, I'd think): http://www.lucentis.com/hcp/dme/clinical-trials-dme.html
Try hundreds of millions, from everything I've heard about what it takes to get a new drug to market. Now, you can question their decision to grab a fragment of the original and tweak it for what they thought would be better efficiency, something you know only after many years and $$$, but otherwise the costs are baked into the regulatory pie.
And even then a new indication for the original would not be cheap to get through the process ... given that it's injected into the eye vs. bloodstream, I don't think it would count as a "routine" new indication, but would require going back all the way to the first stage safety trials.
ADDED: Looking closer, they did 2 sets of Stage III trials for 3 indications, three different diseases that all have a symptom this drug treats. Around 800 patents total for each indication, and they did a 3rd Stage III trial for the first indication, looks like they experimented with less frequent dosing in that 3rd trial.
If you believe that Stage III trials, the ones that in theory prove a drug actually works, have any value, then just doing this science was worthwhile, vs. practitioners having much more rough knowledge of what the original drug could do after compounding. If you don't believe in Stage III trials, well, we can sure cut the costs of future drugs if the drug companies don't have to prove they work....
At the end of the day, Roche (the parent company of Genentech), has revenues and profits quite similar to Google. They're profitable, but not ridiculously so.
In this case an appeal to abstract fairness in pricing based on production costs. Which the author recognizes is probably not practical in the real world.
But that such a thing, "using one of the drugs as a profit center to fund future R&D", can even be thought of as a bad thing ("wrong side of the PR angle") ... well, the very much not nice part of me hopes for all these people who implicitly desire or demand the end of new drug development that karma is for real.
Or is the implication supposed to be that the minimum-wage technicians who work for the "manufacturer" are magically better at following appropriate sterile procedures?
1) Manufacturer techs get paid a hell of a lot better than compounding pharmacy techs. I knew guys in the pharma industry, nothing more than high school pulling down $100K/yr with overtime.
2) There has been a recent incident (http://en.wikipedia.org/wiki/New_England_Compounding_Center_...) where 48 people died and over 700 got sick from poor compounding pharmacy controls.
1) If they know ophthalmologists will prescribe the safer product, and since the demand for this drug is relatively price-inelastic, they are able to raise prices drastically (hence the $1950 discrepancy).
2) If compounding pharmacies are the ones who are under-regulated, perhaps the manufacturer actually faces sufficient regulation. In this case, they face greater liability for sterility issues, and they have a strong incentive to enforce sterile procedures.
The problem with the pharmacies is not so much that the worker is paid low wages or under-skilled, but rather, that the lack of regulatory burden limits the incentive to ensure safe procedures.
Eye doctor here. Avastin is currently used off-lable for eye conditions (most commonly wet AMD and macular edema in diabetes). It is only FDA approved for use in treatment of some colon and lung cancers. Generally speaking, even though it fits standard of care within the field of ophthalmology to use this drug, there are still some inherent risks in doing so for the practitioner, thusly, Lucentis is still preferred by some. Also, I've not encountered this (as MOST insurance companies would prefer practitioners to use the cheaper drug) but I've heard of difficulty with third party payer coverage/ reimbursement when using the off-lable drug.
Another thing to consider, as ajrw pointed out, they ARE NOT as the article mentions "the same drug." Some people respond more favorably to one versus the other. Commonly, the two will be used in succession on the same patient as though no double blind clinical trial has been done to confirm this; both drugs tend to exhibit a slight tachyphylaxis over time (diminished effect). Practitioners have found that when one drug starts becoming less effective, switching to the other VEGF inhibitor can show recapture of the previous level of therapeutic benefit.
I would advise all to take this article with a huge grain of salt. Most practitioners are not aiming to increase insurance costs (obviously, as generally speaking, the higher the bill, the harder it is to get the reimbursement.) Many are probably apprehensive to use an off-lable drug from a medical-legal stand point.
Note: I am not a surgeon. So some of this is slightly presumptive.
1: http://www.reddit.com/r/politics/comments/1sdxz6/an_effectiv...
The rest of the world is very grateful for the US pharmaceutical market. Its unregulated and "free" nature, like consumer advertising for prescription drugs - something completely unheard of in civilized countries - allows for massive profits for the pharmaceutical industry.
those profits do not happen anywhere else. european agencies control and negotiate prices centrally, emerging markets seems to follow the european model (brazil, china, etc.).
those profits do get invested back into r&d, the patent system forces pharma companies to move forward. the recent patent cliff is a great indicator for the system working.
pharma r&d would be severly constrainted if not for the profits generated in the US market. on a global scale it looks like a subsidiy by the US people, paying high markups and taking way more drugs than needed - for the good of the rest of the planet.
thank you. and keep swallowing pills.
I found it especially misleading that they used anecdotal evidence to claim that the cheaper drug is equivalent in function and safety.
That said, Genentech is on the wrong side of the PR angle here and unfortunately for them, some internal documents got exposed which make them seem less than angelic here. If the cost differential of producing the drugs really is small, then they don't have a strong position, because it makes them appear as if they are using one of the drugs as a profit center to fund future R&D.
Anyway, the article really glosses over stuff, but you'd need to spend about 5-7 years getting a PhD in pharmaceutical chemistry, plus working in industry for a few years before you understand the business and science of what genentech does.
How else are they going to fund future R&D?
they are using one of the drugs moreso than another as a profit center.
IE, given no other constraints, I'd expect a pharma to distribute its R&D cost over its drug profit centers weighted by the drug's profit margin, and that all the drug's profit margins would be roughly equal: naively, I'd expect them to raise the price of Avastin and lower the price of Lucentis, assuming the costs of producing them truly are similar.
The reality is, likely there are proprietary reasons we're not privy to that causes the cost differential. They could be technical (maybe it does cause much, much more to produce Lucentis), or the could be business (maybe increasing the price of Avastin could cause it to sell poorly against another drug from a competitor)
If you are ever in a situation where you have to pay for drugs out of pocket or your insurance doesn't cover enough of the drug call your doctor and ask for a lower cost alternative. They can call the pharmacy and often times find a lower cost alternative to fit your budget.
At least this has been my experience with my doctors. I have also had my primary physician straight up tell me the price difference between the best choice and second-best choice doesn't justify the benefits.
I think you hit the nail on the head. Most people just accept what the doctors, insurance companies, and pharmacies tell them, without asking for more affordable alternatives. My pool guy was complaining about how he got one of those "Your insurance is being canceled and your new insurance is 200% the cost" letters from Humana. I got the same exact letter a week ago. I asked him what he was going to do. He said "What can I do? Pay the high cost." I told him I got the same exact letter and I called Humana, talked to an agent for 5 minutes, and they put me on a plan that costs just a few bucks more than my old plan but covers a lot more and with similar deductibles.
It is in the best interest of every corporation to up-sell you the most profitable product. In case of insurance, Humana quoted both of us ACA-compatible plans that sound similar (similar/lower deductible) to the old plans but are actually different (no coinsurance, 100% Rx coverage etc.) and thus cost a lot more.
I also told him to call up BCBS, Aetna, and Cigna if he really wants to shop around because they all have good, competitive plans now. There is no reason to stick with Humana if they don't have a good plan for him. But I don't think he's going to do anything except blame the ACA law. There really needs to be a nationwide education campaign on healthcare. People really have no idea that there are better/cheaper alternatives, regardless of whether you are for/against ACA.
"Genentech also provides rebates to doctors who prescribe large amounts of the drug."
"Rebate"? No, it's a kickback. Unless somehow the doctor is paying for the patient's prescription.
But doctors don't buy the drug, patients and Medicare do. So it is straight up bribery of people abusing legally protected positions of trust?
The physician purchases the drug and keeps an inventory. When a patient is treated, the doctors bills the insurance company and receives the cost of the drug (usually average selling cost) plus a mark-up.
Drug companies are allowed to offer rebates to physicians (it falls under the "safe harbor") as long as it doesn't create perverse incentives for use (as determined by the DOJ). The other thing to keep in mind is that any rebates gets subtracted from the average selling price, so in essence any rebate is clawed back with a few quarters.
One brother was a miraculous curer of all injuries and ills. It did not matter how far a disease or injury had progressed, he could cure the patient. He was known throughout the continent.
One brother was exemplar diagnostician of all injuries and ills. It did not matter what was wrong, he could diagnose the problem and if he was unable to solve the problem he would make a personal introduction the most knowledgeable expert on the matter. He was known throughout the country.
The third brother was just a humble backcountry physician. He wasn't very good at diagnosing or curing diseases. But he visited his clients frequently, and gave them advice on their diet, and home and work conditions. On the rare occasion when his clients got ill or injured, he tended them back to health and when possible helped them to remove the conditions leading to the ill or injury. He was only known throughout the village.
They don't know that though... Instead they will rely on all sorts of proxy indicators, and prescribing lots of tests and drugs is one of them. And no, it's not reliable. On the other hand, doctors have to appeal to these indicators in order to get patients to actually take their advice seriously.
Doctors should use their expertise to advise patients, but in the end people have to be allowed to make their own health decisions. Even if I did believe that doctor B knows better (which I have no reason to), I know I'll get at least the same treatment from doctor A and I'll be able to openly discuss my options.
Who says you can't discuss options openly with doctor B?
Exactly. In my case doctor B once took 30min to explain something I didn't understand, he also grabbed some books for it.. without charging me. One part is true, I can't certainly know who's better.
"doctor B will not give you anything more than you need, even if you ask for it" says that by implication: doctor B seems not to be open to ideas other than his own. That's (personally) not what I would prefer in a doctor.
I'm a scientist with significant relevant training.
I know more about my own medical history than any doctor I've met. (it may help to understand that locally that we don't have 'family' doctors and are assigned whichever general practitioner is available to bring the notes up on the screen)
I also confident that I'm a far better judge of my own risk and utility profiles than a doctor is. Who is the best person to decide which of a choice of treatments is right, given the costs and benefits? I believe a doctor shouldn't be (unilaterally) deciding that for me.
Even if those things did not apply to me, I would still want a doctor to advise me and then respect my judgment.
That's nice and all, but most people aren't.
This is a little like saying because you're a theoretical nuclear physicist that you should be able to run a nuclear reactor - and so should any random yahoo off the street.
If you scratch that line and read the rest, my other points would apply generally.
We aspire to give people personal choice in their lives. People have the choice to drink or smoke or get obese or even break the law and risk the consequences. People should have that personal choice in their medical treatment as well.
It's a matter of respect for patients.
Well, if that counts, you have the choice to forge a prescription or break into a pharmacy to self-medicate.
"I'd like antibiotics."
"Sorry, but we don't prescribe them for colds. Here's why."
Go up a level if you would like to try again.
It is all about incentives. Most PPO systems encourage everyone to spend more money.
- Doctor's want to sell more (and more expensive) drugs. They make more money that way.
- Patients on many PPO plans pay a small flat fee for each drug. Why not go with the more "expensive" one? Its all the same to the patient.
- The government and insurance companies work together to outlaw cheap plans and force people to over-buy for coverage the patients either don't need or expenses that are predictable.
I do not understand why anyone thought this was a good idea, or even one that made sense. What was the purpose here?
6% is probably a reasonable guess at the average costs. Large, high-volume operations can make a profit by keeping their costs below 6%, and that may create a wrong incentive. But the right answer isn't to change 6% to 0%, because nobody will want to handle expensive drugs.
They get a 6% margin to account for all the other overhead associated with stocking the product. Someone has to order the drug, receive the drug, stock the drug, retrieve the drug and ready the drug for administration.
If they don't get that 6%, they lose money each time they administer the drug.
It seems that patients aren't agents who have any involvement in anything, in the authors world. They're just objects to be pushed around by insurance companies, doctors, and drug makers.
Regardless of the details of these two drugs, right there you have the problem with health care in America.
As any chemist worth their salt will tell you, small differences to molecules doesn't necessarily make them just as easily produced. And similarly any biochemist worth their salt will be able to tell you that small differences can indeed matter a lot!
Reading the wikipedia article for the more expensive drug (http://en.wikipedia.org/wiki/Ranibizumab), it does appear that there are therapeutic differences between the two drugs in terms of associated infections.
The real thing, however, to check when talking about medicines is the Specific Product Characteristics sheet. This is, in essence, what doctors refer to when looking up medicines. http://www.medicines.org.uk/emc/medicine/19409/SPC/Lucentis+... and http://www.medicines.org.uk/emc/medicine/15748/SPC/Avastin+2... . Avastin is used for a lot more than just eye conditions, it seems, and has shall we say a number of issues.
Something most people fail to realise is exactly how expensive new drug development actually is. You've got experimental labs doing in-vivo tests of thousands of molecules (at least), animal studies to ensure the human trials will be safe, multiple stages of clinical trials in humans with associated insurance, etc. The sole means of recuperating the cost of all of this is through product sales. There are very few actual grants awarded for developing medicines all the way through to production. No tie-in marketing of lunch boxes. No crowdfunding from patient groups.
I do wholeheartedly agree, however, that there are perverse incentives on doctors to prescribe more expensive medication, and the modern pharmaceutical industry is messed up in so many ways. Most doctors too don't even understand properly what it is they are prescribing[1], and the 21st century medical representative system has more in common with jingles and home appliance sales than the clinical educators of the 20th century.
Disclosure: I have family and friends working in this field
[1] Reasons why people become doctors: money, power and helping people. Good doctors get to chose two of out of three. And to be fair to doctors, they have to remember a hell of a lot of academic material in a constantly changing field, and /then/ have social skills and physical skills to master
Genentech have no problem at all whatsoever with most off-label uses of Avastin (e.g. ovarian cancer) and have subsequently added them to the label (and in some cases, like breast cancer, they had to be dropped from the label afterwards), but they actively refuse to do so for ophthalmic use presumably because it would chew into Lucentis profits which are practically an order of magnitude larger. Imagine if Avastin were wildly different from Lucentis - would this fingers-in-ears "lalalala" singing attitude (to be generous) to keeping the use off-label seem reasonable to you in the face of massive amounts of evidence supporting the idea that it is just fine? Literally their only excuse for doing so is that Lucentis exists, nothing else. Both drugs have a number of issues, both drugs could be used for a lot more than ophthalmic use, and both drugs are still kind of expensive ($50 vs $2000 in the US). Avastin is still a blockbuster for Genentech, don't forget - it is one of the best selling drugs in the US.
And yes, I appreciate that drug development is expensive and I know companies have to work for their stockholders, but it's really hard to watch patients trying to make a decision about Avastin vs Lucentis at the end of the day. Maybe I'm wanting to be a mediocre doctor that just wants to help people, haha. But my father has retina issues and I have spent way too much time in waiting rooms overhearing his specialist convincing other patients that he has had an excellent track record with Avastin use as well as Lucentis and he wants to prescribe whichever costs the least out of pocket first. When some of his patients decide not to go with either drug because off label use is too scary for them and they can't afford Lucentis even though he tries to reason with them - those are people giving up their fucking _sight_ and a practically miraculously effective treatment for want of money and a successful scare campaign. And he is a specialist that (I did my research before we went to him) has a good background in research and clinical practice, as well as participating in some studies for Avastin and Lucentis alike, so I hope he has appreciated your argument before doing what he does, too.
Perverse is an understatement here in my (not so honest) opinion.
As an example of this: thalidomide has two different enantiomers (see here: http://en.wikipedia.org/wiki/File:Thalidomide-structures.png) one of which is harmless (or at least is until it racemizes) and the other of which causes severe birth defects. These are literally the same atoms and same bonds with a twist.
If a twist in a molecule makes the difference between a healthy baby and a severely deformed one, then "a few cosmetic changes" can make a huge difference.
My doctor tried for a couple years to push it on me while fully knowing that I would much rather just go to Costco and buy a year's worth of generic Zyrtec for the after-insurance cost of one month of Xyzal. There is literally no difference in effectiveness or side effects for me between the two. For many people there won't be much of a difference.
Obviously, insurers have wised up to this scheme with the "new" allergy drugs, but in other cases, it can be helpful.
In my case, he prescribed it and I asked for an alternative after a small case of sticker shock at the pharmacy (and the pharmacist was the one that mentioned it's practically Zyrtec). The next visit he dumped a couple months worth of samples into my lap and told me I should just stick with it and pay for it because it's worth it, so have some manufacturer coupons - you know, the same doctor that prescribed Zyrtec to me before Zyrtec was OTC, hahahaha. I'm still assuming that he wasn't after a kickback as much as it was just sticking with anything that worked at all in the months that I had bronchitis and sinusitis at the same time (with existing allergies and asthma, it was a terrible hell). Except he kept telling me to give it a chance after all that was over. Then I changed insurance plans and he wasn't in network so that was that.
I think the most unfortunate thing is that pricing is pretty opaque. Outside of that and a couple other situations, my doctors have been really helpful in trying to find cheaper alternatives but they don't know what is cheaper other than having someone spend time with the pharmacist going down a list of alternatives. Another anecdote from helping my dad: I used to set aside 2 hours every time he got a new prescription from his ophthalmologist. There were eyedrops that were literally $5/bottle/month, and then there were eyedrops that retailed for over $500 for a fucking 10ml bottle ~1 month supply (I'm looking at you Alphagan P). Every insurance company and plan would be different so someone from the doctor's office had to call the pharmacy and dealing with this took a couple extra hours on my end. Sometimes some brand name would be drastically cheaper than the generic (this happened with Adderall with my old insurance plan). Sometimes the price changed for no discernible reason (not even like anything to do with deductibles). It drove me nuts.
tl;dr don't be sick. it sucks.
Having said that, certain categories of extremely expensive drug aren't available on the NHS; until recently Herceptin was the most prominent example of this.
This is not like a small molecule where a little change makes a huge difference; Avastin is a giant antibody and Lucentis is a part if the same antibody. It's a hack of the FDA process to allow Genentech to sell an equivalent drug at a very different price.
Take the anti-viral drugs acyclovir and valacyclovir. They're both anti-virals used to treat diseases caused by the herpes simplex virus (e.g. shingles, chicken pox, cold sores, herpes, etc.), and are both commonly prescribed to patients of all ages. The only difference between them is that valacyclovir is a pro-drug -- it metabolizes to acyclovir -- and has slightly higher bioavailability, which means that patients can take three doses a day, instead of five. Otherwise, they're equivalently effective medications.
Granted, three doses a day is easier on patients than five doses a day, but that convenience comes at a cost: valacyclovir costs about five times as much as acyclovir. Your doctor won't tell you this -- she'll just prescribe the valacyclovir, in nearly all cases -- and your private insurance company won't do anything to encourage you to take one drug over the other. About the only way you'd know is if you tried to buy the drug without insurance, and your pharmacist told you that you could use this other, cheaper medication to save a lot of money.
Not only are "entitlement programs" not the problem here, they could actually be the solution: a single-payer health system would have an economic incentive to push back on providers, and encourage them to use more cost-effective drugs. Our current, private insurance system is almost totally blind to cost effectiveness, because nobody in the chain has any incentive to care. The final costs of the system get passed back to employers in the form of annual rate increases, when it's too late to do anything about them.
So I can see lots of physicians routinely prescribing the valacyclovir ... although for someone like me, to whom the whole idea of compliance was a new, almost unthinkable thing when I first learned about it, they'd like go with the acyclovir (especially after I looked up the drugs in question, read up on their pharmacokinetics, etc.; obviously I'm a special case, e.g. nowadays I tell my doctors what to prescribe me for allergies and sinus infections, having learned what works and what's cheap).
Hmmm, come to think of it, when I got an "early" (age early 40s) case of herpes zoster (shingles, and, yeah, it's no fun at all, get the vaccine when you can) in 2003 I was prescribed acyclovir, by a doctor who knew both my financial situation (not great then) and compliance patterns.
Aside: I also learned about this when I came down with shingles. That was a bummer (not the least of which because I was on COBRA at the time, and the insurance company refused to pay the med costs without going through a complicated reimbursement scheme!)
These companies are just looking out for their own like good Americans.
http://www.fiercepharma.com/special-reports/avastin
Until then it's off-label usage. When the time comes, expect an absolute feeding frenzy to make a similar equivalent (with incrementally higher efficacy or slightly fewer side effects) or an alternative formulation to regain those patent rights. I would expect Genentech is already hard at work here.
http://en.wikipedia.org/wiki/Dr._Reddy%27s_Laboratories
With up to 10M cases in the US alone, it seems like an excellent target for competition.
http://www.blindness.org/index.php?option=com_content&view=a...
Or look at Vyvanse, a prodrug of Adderall. Shire Plc has been intentionally manipulating the market (using government amphetamine quotas) for years in order to push patients away from cheaper generic Adderall (despite the fact that many people find Vyvanse to be substantially inferior).
Or take the case of adrafinil, which metabolizes into modafinil (provigil). Adrafinil is just fine (not quite as effective, but nearly so), but its patent ran out. At that point, Cephalon pulled strings to get its approval revoked (this was in France; adrafinil is unapproved and unregulated in the US), so that people would have to move to their newer, patented drug. (And yes, adrafinil does tax the liver some, but no more so than plenty of other drugs).
Outright bribery of generic companies to hold off on production (http://www.usatoday.com/story/news/nation/2013/06/17/supreme...), scaremongering over safety of the generic (the article being discussed in this thread), paying doctors for prescribing the more expensive versions, etc.
They likely can't in this situation, as the cheaper alternative is off-label.
Eventually, generic manufacturers may be able to compete (the generic clones of biologic drugs are called biosimilars), but it will take a long time and significant resources, because they will need to run new clinical trials to show that the new drugs are equivalent:
Because different manufacturers may produce slightly different products, they consequently cannot guarantee that their version is exactly as safe and effective as the original manufacturer's version. So, unlike most drugs, generic versions of biologics were not authorized in the United States or the European Union through the simplified procedures allowed for small-molecule generics. As a result, nearly all biologics have been brand-name therapeutics and required very extensive testing. http://en.wikipedia.org/wiki/Biologic_medical_product#Biosim...
The FDA gained the authority to approve biosimilars (including interchangeables that are substitutable with their reference product) as part of the Patient Protection and Affordable Care Act signed by President Obama on March 23, 2010 - none have yet been approved. http://en.wikipedia.org/wiki/Biosimilar#Approval_processes
http://www.biopharma-reporter.com/Markets-Regulations/Dr-Red...
Because at $75M to $250M a pop, they're way cheaper than developing a new Biologic ($1B-$2B) and that's because while none have been approved yet, the pathway in the Patient Protection and Affordable Care Act is shorter than that for a new Biologic. I think Big Pharma will do what it takes to make this happen myself. Just like Google will apparently do just about anything for the bottom line despite their corporate motto.
(This is a joke; when there are just two companies they price-fix rather than compete. Not with actual price-fixing agreements, instead tit for tat signaling as in the iterated prisoner's dilemma)
I take the point that some of the motivation (I'm hedging here because I haven't looked into it...) for Nexium is a patent protected drug to market, but the tone of this thread would have me believe that Prilosec and equivalents are disappeared from the market.
It's their most commercially-successful medication, they did misleading studies in order to tout its comparative effectiveness, market it heavily and bribe docs to favour it.
Prilosec is still available, but if your doctor prescribes Nexium, you're unlikely to question it. Virtually all of the folks on it could likely be on Prilosec with equal effect and much less cost to the healthcare system.
It's not like the people criticizing them for it have been bashful or unqualified.
(I have a similar "Well, shit." reaction to all sorts of things, politics, etc.)
Insurees are essentially paying a monthly cost for an effectively unlimited pool of medical funds. As long as the bill is above what their copay costs, they couldn't care less how much the drug costs - if anything, they will choose the drug that costs more than what the nearly identical drug costs so they can 'get their money back.' As long as the consumer is separated from the consequences of their choices, costs will continue to rise. Some kind of incentive for people to actually care about the cost of their decisions needs to be engineered into the system.
Suppose, perhaps, that instead of mandating that employers provide insurance to full-time employees, the government mandated that employers provide catastrophic insurance and contribute the remainder of the difference between the old system and the new to a kind of Health Savings Account: something that's tax-advantaged, and can only be used to pay for healthcare. Employees would then pay their medical bills directly from this fund, and funds will continuously build if they're not used. The kicker is that this HSA also doubles as a retirement fund, and any funds left over when retirement age is reached can be withdrawn without penalty. People will see the money as theirs, and will be much more careful about how they spend it, thus putting pressure on doctors and healthcare providers to reduce prices, rather than increasing them.
This took me ten minutes to think up. Give me half an hour, and I'll work out most of the kinks. Give a team of professionals a few weeks, and I'm sure that we could come up with something that makes infinitely more sense than the ridiculous hodgepodge of special interest legislation and twisted incentives that we have now.
For example. Someone will be paid a bonus to make sure the average retirement account is emptied. The average american woman has about 2 kids, so we'll charge about 40% of an average lifetime account "earnings". After all we can either directly or indirectly select any price we'd like.
Another example would be some weirdness with plastic surgery where the cost would now directly correlate solely with human emotional response to a procedure rather than difficulty of the surgery.
Finally I think you'd have some pretty weird and borderline inhumane situations with respect to just barely under retirement age patients getting sick... Feel a lump? Well your grandkids will never go to college, or your kids will never live in a house, etc, if you seek treatment before retirement. Just wait a couple months / years, after all what could possibly go wrong with untreated cancer or heart disease or diabetes?
Now if you could roll over the treatment fund directly to your kids, that sounds great until (grand)parents start offing themselves so their kid can afford treatment.
"Give a team of professionals a few weeks"
Fox guarding the henhouse, you'll end up with something at least as corrupt if not more so than the existing solution.
The answer is that drugs aren't priced by how much they cost to manufacture a dose -- nor should they be!
Roughly, they're priced by the cost of R&D (a fixed cost) and the benefit to patients (a fixed benefit per patient). So it makes complete sense that Lucentis is more expensive, because the does size is so much smaller. It's still vastly less expensive to get eye treatment with Lucentis than cancer treatment with Avastin, which runs at ~$100,000/year.
http://www.fiercepharma.com/story/novartis-digs-safety-data-...
>The incidence of what are known as serious adverse events — a catchall category that includes hospitalizations for any reason — was slightly higher in the Avastin group: 40 percent vs. 32 percent. The adverse events included broken bones and urinary tract infections.
“The majority of the adverse events would be difficult to imagine being caused by the drug,” Martin said. Martin noted that while small, probably random effects favored Lucentis in some cases and in others they favored Avastin. Neither should be viewed as conclusively related to the drug, he said. >
medical research is stupidly expensive and companies need to recover their costs for their to be progress at all. incidentally its the /only/ valid argument i have seen for patents. it also explains a lot of the high expenses involved... its a shame, i feel that this is an industry that desperately needs to be nationalised because, even with the best of intentions, a business must be profitable to survive.
we regularly see layers of rhetoric and polical manuveuring attacking e.g. Obama care, the NHS and similar initiatives and from this i feel we lose out - they criticise the specifics for a political agenda. imo the spirit of these programs is exactly right - the problem is always sloppy implementation by politicians (as with any case where nationalisation is not effective - which is /provable/ almost in the mathematical sense). We can't expect them to do well though - they are winners of popularity contests which essentially boil down to competitions of rhetoric and salesmanship - they have no reason to have any of the prerequisite skills for us to expect them to do a good job in that arena - or even leadership in general. it is a massive failing of our particular flavour of democracy imo.
on the other side doctors are supposed to be bound by the Hippocratic oath. this utterly rules out not helping people because they can't afford it - and yet many physicians have to make that choice regularly - which is not just breaking their word, but against the entire spirit of medicine and morality.
all in all its a horrible situation, but one that i believe is incredibly fixable... however articles like this are attacking the institutions which currently allow us to have medicine and portraying it in a way that the common man will empathize with. its just another pile of rhetoric distracting us from being productive imo... if you dig into any of the details as other commenters have mentioned, the factual basis is weak.
Since we are talking about taxpayer money, this seems like a great opportunity for a Congressional hearing on the matter.
I'll give you one guess on which industry lobbied for that restriction.
1. Medicare only pays "average selling price" which includes all discounts offered to physicians
2. Medicare demands pharma pay 50% of the donut hole gap which is several billion each year
3. Medicaid automatically gets a 23% discount on all drugs
4. DOD, VA and other gov't organizations do negotiation drug prices and they get a 24% discount on top of that
There is plenty of price negotiations on the gov't side.
However, in the Avastin vs. Lucentis case, they are no therapeutically equivalent.