Pharmaceutical Price Hike: Only 66,566%

Cancer. It is a word the strikes fear in the hearts of many as many still equate being told one has cancer with one being given a death sentence. From that point on, one becomes somewhat of a living time bomb. However, for you, the cancer has been caught early on enough that you can still get treatment to combat the deadly illness. Immediately, one’s thoughts then go to how much will this treatment cost? For someone without insurance, the costs could be crippling. Imatinib is from a class of drugs commonly used to combat cancer. In the United States, a single year’s worth of treatment can cost upwards of $106,000. Luckily, you live in India.

In India, a year’s worth of treatment using Imatinib costs around $159. The difference between the costs for this type of drug between India and the United States is a price hike of over 66,566%. That’s right, five digits. A recent review of drug production costs and pricing presented this past September at the 2015 European Cancer Congress mapped out the money an individual would spend for a year’s treatment of three classes of drugs commonly used to combat cancer: Imatinibs, Erlotinibs, and Lapatinibs. In addition, these prices are already allowing for a 50% profit margin for pharmaceutical companies. The main reason why these life-saving drugs are cheaper in both India and in Europe (the price hike between Europe and the United States for Imatinib hovering at around 231%) is because generic versions of the drugs using Imatinibs are so much more readily available in India. The article takes the specific example of Gleevec, a drug used by people with leukemia and gastric cancer. Its patent, first approved by the FDA in 2001, should have expired this year. However, Novartis, the pharmaceutical company who has the patent, has managed to keep other companies trying to make generic version at bay by making the large amounts the drug needed to synthesize a generic version hard to attain by these other companies. This is a problem faced by many pharmaceutical companies as they try to produce cheaper generic versions of much more expensive drugs. The reason why expensive drugs are able to stay expensive is because there are no other competitors. As a result, people with these illnesses (usually more rare and not as researched) are forced to buy these expensive drugs as they have to alternative drug to turn to.

Why then, are these cancer drugs so much cheaper in India? With not as many restrictions within drug production and with drugs being so readily available, companies are able to attain enough samples to create many different generic versions of a single drug. As a result, the buying medication in India is more of a true free market as consumers can see how expensive each drug that would do the same thing is. Companies are then either forced to lower prices to beat out their competition or risk going out of business. As it would not really be beneficial for anyone (but Pharmaceutical companies) to lower drug production restrictions, the more feasible solution for the United States would be to put a cap on prices for each specific type of drug. Adopting something similar to Canada’s pharmaceutical policy where certain drugs cannot be sold within the county unless the price can be negotiated to a suitable arrangement would get affordable life-saving medication to those who need it the most without making them have to move halfway across the world to receive it.

http://www.forbes.com/sites/elaineschattner/2015/11/24/why-many-new-cancer-drugs-dont-have-to-cost-so-much/

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Daraprim Part 2: Competitors Don’t Mean Competition

After last month’s famous story of how Martin Shkreli, the CEO of Pharmaceutical Company Turing Pharmaceuticals raised the price of an AIDS drug from $13.50 to $750 overnight, a new story has emerged of a competitor company coming out with a $1 version of the drug. This competitor is Imprimis Pharmaceuticals, a pharmaceutical company that mixes approved drug ingredients to fill individualized patient prescriptions. Imprimis Pharmaceuticals Chief Executive Mark Baum announced last week that they would be supplying pills containing Daraprim’s active ingredients, pyrimethamine and leucovorin, in 100 pill count bottles for $99. Baum has also announced that they will be developing generic alternatives to many other drugs that have sky rocketed recently over the years- mainly drugs treating cancer and other rare diseases that the general public does not take much notice of.

However, as much as Imprimis Pharmaceuticals is championed as a hero of the people (as they should be), it turns out that Turing Pharmaceuticals really will not lose much from this competition. Imprimis’ ability to compete with Turing is greatly limited as it is a compounding pharmacy which means it can only provide medicine after a doctor requests it, meaning that doctors have to specifically be requesting their version of the pill. As we have learned in class, there are many ways for Turing Pharmaceuticals to take advantage of this system as they may begin to incentivize doctors (whether they do it over or under the table, monetarily or otherwise) to continue prescribing their version of Daraprim. In addition, rather than pharmacies having to specifically order the new version of Daraprim every time someone asks for it, it is much easier for pharmacies to dispense a drug they already readily have on hand such as the original version of Daraprim. There is already a system set in place where if the pharmacy cannot get the insurer to pay for the medicine but cannot, the pharmacy will usually dispense the drug regardless, using either charities or –where legally possible- by making the drug maker itself cover the difference in cost. Due to these reasons, despite the fact that a $1 competitor would trigger the notion of a free market happening where the people will choose the most cost-effective drug for them –where that company would make profit and the other would go out of business because no one would buy that drug, – there is really no free-market at all. Until these loopholes are closed and something like a standard price for drugs are set, these practices will continue unchallenged, and Americans will continue to bear the consequences.

http://www.usatoday.com/story/money/2015/10/23/imprimis-pharmaceuticals-turing-pharmaceuticals-daraprim/74452030/

http://www.forbes.com/sites/matthewherper/2015/10/23/suckers-that-1-a-pill-competitor-wont-hurt-martin-shkreli-one-bit/2/

The Political Discussion regarding the Cost of Prescription Medication

With the continued increase in cost of prescription drugs and medication, politicians have noticed the issue and has become a topic in which they wish to correct. In the New York Times article, Prescription Drug Cost are Rising as a Campaign Issue, Margot Sanger-katz states that the democratic nominees are preparing to combat this issue. According to the article, per capita drug spending has increased by over $100 in just the past year and while the ACA (Affordable Care Act) have increase health insurance coverage, it failed to combat the trend of rising expenses for prescription drugs. Statistics also show that the United States spends $1034 per capita on prescription drugs, over $300 more than the next country and $500 more than the average. Continue reading “The Political Discussion regarding the Cost of Prescription Medication”

The Endless Obstacles to Passing Healthcare Legislation

Now that the affordable care act has brought health care insurance coverage to millions of people, another issue prevails for the US healthcare system: the rising costs of drug prices. In response, front-line presidential candidates are proposing plans to change the way drugs are sold and financed. A recent New York Times article discusses Hilary’s plan to cap patients’ drug prices to 250/month, to require most drug makers to spend a portion of profits on research, and to discount the price of drugs sold to the federal government. In contrast, Bernie Sanders is pushing for a more radical change: a Medicare for all single payer system – a plan that pushes the US to catch up to peer countries that provide guaranteed healthcare.

Continue reading “The Endless Obstacles to Passing Healthcare Legislation”