Rich pharma companies, poor patients.

Pharmaceutical companies are getting rich on the backs of their patients. Don't believe me? Here's some proof.

First we have an article from New Jersey on how Roche's profits are up 10% and its revenues are up 4% on profits from its breast cancer drugs. The company is now focusing on cancer drugs and hopes to find more high profit drugs as generics come available for drugs such as Herceptin.  By the way, their cancer drugs cost between $70,000 and $100,000+ annually per patient.

If you ask a pharma company you get the standard lines: 'no one pays those prices', 'they are covered by insurance', 'we do have programs for those who are uninsured to help with the costs'.

But my point is why are they pricing them so high in the first place? List prices do not reflect costs, they usually reflect positioning. A price tag of $90,000/year reflects exclusivity. 'It must be good if it costs so much.'

Do you see the problem here? As other pharmaceutical companies, Roche is supposedly pricing its drugs so high to compensate for their high research and development costs. But look how profitable they are. This is a graph of their 2012 sales from their website:

And then here are are the sales from individual products:

(These numbers are in billions (with a b, not an m) Swiss francs which are currently worth $0.93.) Paltry profits of $16 billion on sales of $44 billion? That's pretty damn profitable if you ask me. Mabthera is an RA drug, Herceptin, Tarceva, Avastin, Xeloda are for cancer, Pegasys for Hepatitis C, and Lucentis is a diabetes drug.)

Also of note is the fact that Roche has negotiated with other countries to slash prices of the drugs there - I found examples in South Africa, India, and European countries. So the other countries - read the 'rich' US - gets to pay the big bucks? How not fair!

I'm sorry but I don't feel sorry for the pharmaceutical industry and how their research costs cause them to price drugs so high. But if their profits are so high and their employees are paid so highly, why are the patients bearing the brunt of the costs?

[I will note here that I am not targeting Roche for any reason. I came across the article from NJ.com on their profits in cancer drugs which I read and then did a little more research. I could probably write a similar article on other large pharma companies as well.]

A bit scary

I don't mean to target the pharmaceutical industry but I do have problems with the costs of medications which is why I always read the articles about them. Then the articles intrigue me and I start blogging about them.

Last week I saw one on how Glaxo SmithKline executives were being detained in China - charged with bribery. This is not the first time that this has happened and probably not the last as well.

Then this morning's news adds to that to say that GSK may have not been using good business practices in managing their clinical trials in China. They even admit that some of their executives might have broken the law. And business practices of other pharmaceutical companies will be examined.

Its one thing to pay a lot of money for medications because of the rationale that their research costs are so high. But its another thing all together if they are not working within the law and using questionable handling of clinical trials. Possibly even not reporting the results of animal testing.

Now I feel so much better. The really expensive drugs may not have been put through all the clinical trials that are required. How comforting. Short cuts always come back to get you in the end. But from the patient perspective, it is a bit scary.

Oral Parity or Time to Write Your Congressman

Does anyone know what that means? When I first  heard it, I needed an explanation. Oral means something to do with your mouth. Parity is something about evenness or equality (I am so smart I came up with that myself).

So what is oral parity? Its about health insurance paying for oral medications the same way they pay for in hospital infusions and other medical treatments.

You get the basics. You go to the doctor and get an IV or a shot and you pay a copay and go home. Or you go pick up your prescription and if you are lucky its a generic and costs somewhere less than $20.

But if its a brand name drug with no generic available or a new brand name drug which is considered to be a premium or Tier 37.8 (or whatever term the insurance company wants to call it to make you understand its EXPENSIVE). That means your co-pay will be something that puts a significant dent in your wallet. My copays max out at 35% of the cost. I have gotten the $100+/month prescriptions and am on one now. If I go through mail order, its a paltry $95 per month.

I think I have blogged about this before but it is increasing in importance. Currently 1/4 of all cancer drugs in development are planned as oral medications. So if a new cancer drug costs $100,000 per year and a patient needs to pay 35% of that? You can do the math.

The results is doctors are less likely to prescribe the expensive oral drugs or patients go bankrupt or just don't fill their prescriptions. To get affordable cancer care, a patient needs to get an IV infusion which is stressful, time consuming, and probably not the most advanced treatment available.

For the third time, a bill is going through Congress:

"The Cancer Drug Coverage Parity Act of 2013 (HR 1801) seeks to amend the Employee Retirement Income Security Act of 1974, the Public Health Service Act, and the Internal Revenue Code of 1986 "to require group and individual health insurance coverage and group health plans to provide for coverage of oral anticancer drugs on terms no less favorable than the coverage provided for anticancer medications administered by a health care provider." Companion legislation must be introduced and passed in the Senate before the bill can become law."

You know how agreeable Congress is these days. Maybe its time to write your Congressman/woman.

The real problem is not the patient's

This is crazy. The breast cancer patients covered by Britain's National Health Service will not have Afinitor made available to them - because of the cost. And Novartis' reply? A blow for the patients.

Sorry I am not buying this one. It is a problem for the patients. But the real problem is for the manufacturer.

The UK gave it a cost of 68,000 pounds (>$100,000)/QALY (Quality Adjusted Life Year). Now the QALY is a fancy term but you get the basic idea.

The real problem is the manufacturer is putting all their costs on the backs of the patients again.

I just don't have a lot of sympathy for an industry which is doing quite well full of high salaries, perks, funded research and more. Then they hire all their lawyers and put together all the fancy promotion and packaging and try to justify the high prices they want.

I think it should never be the patient's problem but should go back to the originator - which is the manufacturer here.

Doing good hides being bad

GlaxoSmithKline has announced a partnership with Save the Children to help reduce the child mortality rates in Africa by providing drugs at cost. This sounds all very good and such. I am all for reducing child mortality rates and reduced costs for medications.

However, you should also know that GlaxoSmithKline is the manufacturer of Tykerb which is used to treat several kinds of cancer, including metastatic breast cancer for the paltry amount of $6000-$7000/month. I did find the price online for $1000/month. This is only one of their many medications.

What irks me about this supposed 'goodness' by GSK is paid for on the backs of the American patients which metastatic breast cancer as well as other cancers.

In addition, GSK was fined for market abuse in the US where it paid $3 billion (that's with a b) last year for marketing antidepressants for children for which it had not been approved. And if you read this little analysis included with the article, the rest of the rationale comes clear.

"Analysis

by Naomi Grimley BBC international development correspondent

"Big pharma" does not have a good reputation in Africa. Memories are still scarred by the refusal of some drug companies to lower prices for HIV drugs when millions were dying across the continent.
Justin Forsyth, of Save the Children, admits that he used to picket GlaxoSmithKline over that controversy. Now, though, he thinks this particular drug giant has reformed itself under the leadership of Sir Andrew Witty.

That's why the charity has agreed to forge a partnership with GSK to formulate new drugs and train health workers in Africa.

But some critics insist it's still an unholy alliance. They argue the drug company is in need of good publicity - especially after it was fined $3bn (£1.9bn) in the US last year for promoting anti-depressants for unapproved use in children.

The partnership might also help GSK gain access to new emerging economies - which will spend much more on drugs in the coming years.

So basically they are using good to hide the bad and their self promotion for future gains. Its not so good in daylight. I'm still not a fan.

Show me the data but don't charge me an arm and a leg

In the past the biotechnology industry enjoyed a cost and procurement system where drugs were provided at the cost set by the provider. Now there is change coming in the industry where the value of the drugs must be proven before being accepted. They now will be forced to sell good outcomes and at a lower cost.

While the industry stock levels are running at a long term high and the FDA has approved a record number of drugs, the winds of change are shifting on through. On Monday, there was an executive meeting at the Biotechnology Industry Organization convention in Chicago where this issue was discussed in detail. 

"The national health care overhaul, the shift toward personalized medicines targeting smaller patient populations, and tougher reimbursement standards by commercial health insurers in the United States and government payers in Europe are changing the game for biotechnology start-ups and pharmaceutical giants alike, Burrill said.

“We as a health care system are at a pivotal moment,” said David Meeker, chief executive of the Genzyme division of Sanofi SA in Cambridge. “Economic growth in the Western world is negligible to negative. Everyone’s taking a hit. That’s translating into increased pressure on health care spending. The trend is to spend less.”

Drug makers once could count on a straightforward regulatory process and automatic reimbursement for approved medicines. But the process for getting experimental drugs to market has grown longer and costlier as regulators demand more patient-specific data before granting approval. At the same time, payment regulations have become more variable and less certain.

“The payers used to just pay,” Burrill said. “Now they want proof that drugs can improve outcomes and lower costs. And the way you do that for the French versus the way you to it for the Chinese versus the way you do it for Aetna or Kaiser Permanente is all different.”

Industry executives discussed the new dynamic at a Monday session on “pay for value” in the drug business, but there was little agreement on how to define the value of new medicines."

Payers are demanding more data showing benefits before covering them. Manufacturers are creating more and more drugs for smaller populations - for the rarer ailments. Insurers are also reluctant to pay for new expensive drugs to treat common conditions such as diabetes or heart disease.

These changes are causing pharma companies to look at how they do business and partner with other companies, particularly smaller ones, to reduce their risks. I hope to see this continued change s that medications become more affordable and insurance companies are not denying new drugs  because the costs are too high. The doctors should be the one making the decisions on which medications are appropriate for their patients, not the pharmaceutical companies nor the insurance companies.

Put some cost pressure on the providers

Finally I think some pressure is being put on drug manufacturers to manage costs. There was a recent report out of the UK saying that the cost benefit analysis of everolimus, a new advanced breast cancer drug, led to the decision by the National Institute of Health and Clinical Excellence (NICE) to not recommend its use. 

Then another study in the US shows that the cost of drugs for Hepatitis C and Rheumatoid Arthritis account for more than 50% of the costs to treat those patients.

"In the first study, researchers found that despite the overall decrease in Hep C specialty drug use from 2008 to 2011 (17.2 percent vs. 14.1 percent), the Hep C specialty pharmacy total cost of care compound annual growth rate (CAGR) was 15 percent from 2008 to 2011. Specialty drug costs accounted for 35 percent ($13,332 of $38,055) of the total cost of Hep C care in 2008 and was substantially higher at 52.6 percent in 2011 ($30,415 of $57,799), with a CAGR of 31.8 percent. 

In the second study, researchers found that although RA drug use remained steady from 2008 to 2010 (34.6 percent vs. 35.4 percent), the total cost of care CAGR was 7.3 percent from 2008 to 2010. All other medical costs were $11,252 in 2008 and increased to $13,710 in 2010, with a CAGR of 10.4 percent. Combined RA medical and specialty drug costs accounted for $16,218 (54.7 percent) of $29,652 total cost of care in 2008. In 2010, total cost of care was slightly lower at 53.0 percent ($18,098 of $34,163), with a CAGR of 5.6 percent."

'"As the pipeline of expensive specialty drugs continues to grow, we need to stay alert to cost of care trends to make sure patients and plan sponsors receive the best value and can manage the increasing cost burden these treatments bring,"...'

We can't expect insurance companies to pick up the costs of these expensive drugs. Everolimus was priced at twice the amount of Herceptin. Nor can we expect patients to pick up increasing portions of the price. One of my drugs is $95/month co-pay.

This is an issue which warrants more investigation and pressure. Drug manufacturers have blamed research costs for their increasing product pricing. But has pressure been put back on them to reduce their costs in production of drugs. Perhaps they need to take a long hard look at their business practices. As more studies reveal the cost benefit discrepancies, somethings need to change. And it should not be at the expense of quality of life or of the lives of patients.

New Breast Cancer Drug but at What Cost

The FDA approved Kadcyla for late stage breast cancer treatment. This is a good thing. Its about time.  And it will save many women's lives.

But I have a real problem with the financials behind it. A month's treatment costs $9800 or $117,600 annually, which apparently is about twice the costs of Herceptin. These costs will mostly be covered by insurance - and we wonder why insurance premiums are going up.

Immunogen, who developed it, expects to receive a $10.5 million pay off plus royalties of 3-5% of the expected world wide sales of $2 billion (with a b). To my tiny math brain, that means they get $60,000,000 (that's 60 million if you are having problems with all the zeros).

It will be marketed by Genentech who I assume will take in the rest of the profit after coming up with snazzy packaging and fancy ads. I have no idea what Genetech's manufacturing and promotional costs will be but I am sure their profits will exceed that of Immunogen.

But that's okay because the insurance companies will probably cover most of it - which is why our medical costs keep increasing so rapidly.

Going back to when I blogged about pricing and how it is determined by marketing people, I am sure the whopping price tag was set by marketers (those evil people) who wanted it to be high end, represent a last chance for women to extend their lives, and if its expensive it must work really, really, really well.

But at least it is finally available for the women who need it who will gladly pay any price to extend their lives. Call me cynical, but maybe I am.

I am not a patient patient

I am not a patient patient at the best of times. Overnight delivery has spoiled me (and most Americans) to expect instant gratification. To quote Violet from Willy Wonka, "I want it now!"

On Friday I went to see my pain doctor who is in charge of relieving me of pain, as opposed to cancer cootie detection and other specialties. The biggest news I could share with him was that my rheumatologist, to whom he referred me, is leaving the hospital to go to another one.

He suggested, his usual poking, prodding and contortions (does it hurt when  you do this?), that I should increase my dose of my pain patches back up to 10 mcg/hr and then suggested I see him again in six months. I made a face and he changed it to four months. (Who says you can't make faces at  your doctor or that I might be too old for it?)

There are issues with increasing my pain patches back up to 10 from 5. The upside is less pain. The downside is: the price. Can you say $95 for a four week dose? Ouch.

I was getting the patches through mail order because I used to be able to save money and pay $95 for three months. But the law has changed here and they in the evil addictive/street value class and I can only get one month's worth at a time. I understand the principle behind it that people can be addicted, blah, blah, blah. But it hurts my wallet with the copay. I have a friend who gets the 20 dose and she pays around $20/month.

I do have very good health insurance but every so often I get dinged by something like this. For instance my insurance did not cover a chemotherapy wig. But I have a $5000/year out of pocket maximum which does not include pharmacy expenses.  But it means I will not go bankrupt paying medical bills. In the end, I will be paying over $1000 to be relatively pain free each year. But I think its worth it.

There is another downside to these pain patches. I have a reaction to the adhesive. Of course I do. I don't know if its an allergy or what. I have to put on cortisone anti itch stuff on my skin before I can put on a patch which means waiting an hour.

I have gotten completely off track of my being a patient patient so allow me to haul my train of thought back. When the doctor asked which pharmacy I wanted my new prescription to go to, I said the local pharmacy so I could go fill it that day. BUT IT WAS OUT OF STOCK. Being a weekend it won't be there until after 2PM on Monday. I want it NOW! I'll just suck it up and live on Tramadol until then.

Planning for my doctor appointment

Today I have to put in some deep thoughts on a plan for my doctor appointment on Friday with Dr. G the pain management specialist. After last week with Dr P, the rheumatologist who is leaving (without permission from me!), I need to get my questions ready for managing my fibro as well as the stupid back pain which causes no end of crankiness.

I have goals here:

1. Get pain under control.
2. See #1 above.

When I go to the doctor, they always ask my pain level (and if I am safe at home - which I am unless the cat tries to trip me on the stairs). I have to think what hurts, how much, and is this doctor going to care much about it. Specialists only care about the body part that they treat if it is giving you pain. Well I think they do but if I go to the orthopedist who treated my tennis elbow and tell him my back is a 6, he really wants to know that my elbow is a 5. 

The problem is Dr G doesn't want to change my pain meds around much these days  because we are trying to get the RA under control. Dr P just increased my methotrexate (which I really need to learn to spell for I am in violation of my rule that you cannot have an ailment or a treatment you cannot spell and pronounce.) If two sets of meds get changed around, then you never really know what is working and what isn't (or which is causing which nasty side effect).

I was on Butrans 5mcg/hr pain patches but they weren't enough so Dr G increased my dosage to 10mcg/hr and then I had to go through pharmacy hell to find out my co-pay for those is $95/4 weeks which I am not sure I can afford. I am back on 5mcg/hr because I ran out of the 10s and those are a paltry $65/4 weeks. I hope there is something else which will cost less but not require needles and will relieve pain.

So that is  one question. Then we can talk about fibro and back pain and neuropathy and all sorts of fun things. I have to write this all down so my chemo brain isn't required to remember anything important.