DrG's Medisense Feature Article
18072-Calorie_Deficit_Dogma
Obscenely High
Medication Price Genesis
by Ann Gerhardt, MD
August 2018
Print Version
In 2007 Mylan Pharmaceuticals acquired the rights to EpiPen, the
auto-injector syringe pre-filled with epinephrine. It saves
lives
after bee stings and other life-threatening allergic
reactions.
The auto-injector, not the drug, has the patent. The
pre-Mylan
price had been $100 for a two-pack, but yearly price increases shot
it up to $600. After the furor over EpiPen’s price
received
attention from Congress, Mylan introduced a $300 per two-pack
‘generic’ version with its own EpiPen.
Other
companies make similar products but have floundered due to poor
marketing. Adrenaclick costs $110- $200, depending on the
pharmacy, and, with a manufacturer’s coupon at Rite-Aid,
could
cost as little as $10. AUVI-Q is weirder.
The cost to
insurance is $4,500 - $6,285, but only $360 for an uninsured patient
paying cash, or zero through the manufacturer’s patient
assistance program.
In 2013, hedge fund manager Martin Shkreli, as head of Turing
Pharmaceuticals, hiked up the price of a life-saving drug,
Daraprim. Daraprim is the brand name for pyrimethamine, a
62-year-old drug used to treat two life-threatening parasite
infections. The price rose from $13.50 to $750 dollars
PER PILL,
a jump of 5000%, in 2015. Though vilified in the media for
bilking patients and insurance companies, he is now in prison for
securities fraud.
Apparently,
it is illegal to extort investors, but not the public.
Why the epidemic of price gouging?
Because the companies can.
Some price increases
result from shortages
following a production pause or closure. These may occur when
regulators identify problems at a manufacturing plant or a company
makes a strategic decision to stop production.
The price of doxycycline, an antibiotic for atypical bacterial
infections available since 1967, has skyrocketed. Doxycycline
wasn’t grandfathered in – It went through the
patent phase
and, after a long, expensive patent battle, evolved to
generic.
In the developing world it goes for one to four cents per pill and
previously sold for about six cents per pill in the U.S. In
2013
increased demand and manufacturing problems shifted the supply and
demand equation and, depending on availability, the price hit as much
as $1849 per 3-week treatment course.
Recently things got much worse when Hurricane Maria shut down 80 of
Puerto Rico’s pharmaceutical factories. Medications
and
medical devices, the island’s leading exports,
couldn’t be
produced due to lack of electricity, clean water, communications,
supply roads and employee access. Everything from basic salt
solution, used to intravenously hydrate hospital patients, to
pacemakers were affected. Salt solution factories are back in
production, but critical shortages persist for treatments for heart
disease, infections, HIV, cancer, diabetes and arthritis.
Production hasn’t resumed yet. Once it does, if
only one
company that cares more about investors than patients produces it,
prices may balloon on those medications also.
It is too kind and naive to believe that involuntary shortages are the
sole determinant of drug price hikes.
Greed and opportunism account for
most of the obscene price hikes of recent years.
Pharmaceutical companies introduce new drugs with exorbitant prices,
ostensibly to recoup the millions of dollars invested in their
development and testing.
Patents
typically last 20 years,
which sounds like a long time, but starts with the initial filing to
develop the medication. It typically takes 8 years to do the
studies necessary to pass Food and Drug Administration
approval.
The FDA requires drug companies to establish the effectiveness and
safety of new drugs in “adequate and well-controlled
investigations” before marketing them. Sometimes
the FDA
extends marketing exclusivity for particular uses or populations, but
usually an expired patent means other companies MAY start producing a
generic equivalent. That doesn’t necessarily
happen,
especially for drugs with limited markets.
The Hatch-Waxman Act of 1984 allows drug manufacturers to gain approval
for their generics using studies originally used by companies to gain
approval for the brand name drugs. This should speed up the
process, but drug companies can delay generic competition by mis-using
the FDA’s citizen-petition process created in the 1970s as a
mechanism for an average citizen to voice concerns about a
medication. The “concerned
citizen” in
many cases is actually a drug company filing frivolous claims against
the generic in a frantic effort to hold off competition.
Just because a drug is a
generic equivalent doesn’t necessarily mean it will be cheap:
It might be priced only a few percent lower than the brand-name
drug. Cholestyramine (Questran), a cholesterol-lowering fiber
medication, went off patent but has never been cheap, despite available
competing products.
“Biosimilar” drugs, with the same effect and only
slightly
different chemistry, enter the market, and may be priced below the
original, but often not by much.
The FDA delivered
outrageous windfall to predatory drug companies with the 2006
Unapproved Drugs Initiative (UDI).
It was designed to strengthen the FDA’s control of marketed
drugs, by addressing the huge number of medications in existence before
the FDA was established. The Federal Food, Drug and Cosmetic
Act
of 1938 permitted thousands of these drugs to remain on the market
without having to gain regulatory approval. Doctors and
patients
retained access to nitroglycerin, aspirin, colchicine (the best gout
medication), digestive enzymes, life-saving medications used in the
intensive care unit and a variety of antibiotics. These
medications had saved lives for years without undue consequences.
The UDI, purportedly intended to protect people by removing unapproved
drugs from the market “without imposing undue burden on
consumers, or unnecessarily disrupting the market,” blew it
with
the details. If a company jumped through the hoops to obtain
approval for a legacy drug, the FDA would prohibit other companies from
marketing the their generic, creating a monopoly for the first company
to obtain approval.
Vasopressin, grandfathered in by the 1938 FDA act, is a drug used to
save critically ill shock patients when adrenaline hasn’t
worked. Par Pharmaceuticals, using absolutely no new data,
applied for approval for their brand name vasopressin. After
the
FDA granted approval in 2014, it announced that all other makers must
stop production by early 2015. The price of a small vial of
this
life-saving drug multiplied more than 30 times the previous, generic
price. Many hospitals stopped stocking their crash carts with
it.
Colchicine, the only drug that can nip gout pain in the bud, had been
produced by more than a dozen companies for as little as four cents a
pill. When URL Pharmaceuticals (subsequently purchased by
Takeda
Pharmaceuticals) obtained a lock on production through the UDI in
mid-2009, the price rose to $5 a pill for their brand called
Colcrys. This is a medication derived from autumn crocus
(meadow
saffron), used as far back as 1550 B.C. Over thousands of
years,
the only common side effect has been diarrhea. URL Pharma did
no
new pricey studies to justify a cost increase.
The same occurred with one pancreatic enzyme preparation.
After a
few years, competitors have received FDA approval and under-cut
pricing, but not my much.
Instead of protecting patients from ‘unsafe’
medication,
they are now less ‘protected’ when they
can’t afford
to take it. The crazy-making part is that all these
medications were standard care for years and none were considered to be
unsafe. In fact, none of the data used to get FDA approval
was
new. Companies just pulled data from old studies rather than
supplying new data about their particular brand of pills.
The law of unintended consequences proved stronger than the goal of
‘protection’, which didn’t happen
anyway.
Approval of a previously grandfathered drug didn’t require
any
new data proving it was safe and effective. Which makes me
wonder
if the government’s real goal in 2006 had been to help
pharmaceutical companies in the first place. Or perhaps the
FDA
needed more money after the Administration slashed its
budget.
Pharmaceutical companies cough up hefty fees to have their products
evaluated.
UDI and shortages have induced price hike frenzy, extending to numerous
drugs for which there is no apparent justification.
Even
new, patented drugs, such as those for hepatitis C and cancers, cost
hundreds of thousands of dollars for a treatment course.
Why?...because they can.
Nitroprusside and isoproterenol save critically ill patients’
lives and have no equivalent alternatives. Marathon
Pharmaceuticals jacked up their prices.
Nitroprusside’s
price inflated by a factor of 30, from $27.46 per 50 mg in 2012 to
$880.88 in 2015 and isoproterenol went up by a factor of almost 70,
from $26.20 per mg in 2012 to $1,790.11 in 2015.
Cycloserine, used to treat tuberculosis that is resistant to standard
treatment, costs 21 times its price prior to being acquired in 2015 by
Rodelis Therapeutics. The $500 price tag for 30 pills
ballooned
to $10,800. Luckily the original manufacturer was an offshoot
of
Purdue University, which regained the rights to the drug and set up a
‘non-profit’ organization to produce it at
‘only’ twice its original cost.
Something must change, or the disparity in access to what should be
inexpensive medications will seriously affect public and personal
health. Already life expectancy in the U.S. has
fallen.
Here’s a plan: Re-accept grandfathered
medications.
Fund the FDA with public money so it’s not dependent on and
beholden to Big Pharma. Demand that Congress ignores the
pharmaceutical industry’s lobbyists long enough to pass a law
allowing Medicare Part D plans to negotiate price with drug
companies. These things may not overcome the
greed-induced
price gouging, but they would be a start. ╣