[Ip-health] National Post: World’s most expensive drug — which costs up to $700,000 per year — too expensive, Canada says

Thiru Balasubramaniam thiru at keionline.org
Wed Feb 4 07:37:01 PST 2015


World’s most expensive drug — which costs up to $700,000 per year — too
expensive, Canada says

Federal rules require that drug prices be no more than the median –
mid-point – of seven other industrialized nations.

“Alexion continues to sell Soliris to Canadians at the highest
international price among the comparator countries,” says the staff

If a board adjudication panel finds the price is excessive at a hearing to
be held no later than March 6, it could order a cost reduction and the
repaying of surplus income.

Canada’s drug-price regulator has taken the rare step of calling a hearing
into what is considered the world’s most expensive prescription medicine,
accusing its manufacturer of exceeding the permissible price cap.

The yearly cost per patient of as much as $700,000 is even more than the
manufacturer, Alexion Pharmaceutical, charges in the United States, which
typically has the steepest prices globally, says the Patented Medicines
Price Review Board (PMPRB).

Soliris is a breakthrough, potentially lifesaving treatment for two rare
blood diseases, affecting about 180 patients in Canada.

The board, which has not held an excessive-price hearing since 2012, said
it had demanded the U.S.-based firm lower the price and pay back revenue it
made above the cap. It refused both requests, according to formal
allegations issued by board staff.

Soliris has caused waves throughout the world in recent years with its
eyebrow-raising price tag, but this may be the first attempt by a regulator
anywhere to force a rollback.

The company, though, denies that it has broken Canadian rules, while some
experts say the regulatory process itself ignores a key fact – that
provincial drug plans have already negotiated secret discounts on Soliris
for many of the patients they cover.

“Alexion refutes all of the allegations in their entirety and will
vigorously challenge the PMPRB’s proposed order,” it said in an emailed
statement Monday.  “The … allegations that Alexion charged an ‘excessive
price’ for Soliris in Canada are simply wrong, and not based on sound

The company says it has not raised the price since Soliris first came on
the market in 2009, and if the cost is lower in other countries, it’s only
because of changes in the exchange rate.

Soliris and its formidable price have made Alexion something of a darling
on Wall Street, generating $650-million in profit last year on sales of

All provincial drug plans now cover the cost of Soliris for the 90 or so
patients in Canada with paroxysmal nocturnal hemoglobinuria (PNH), a rare
disorder that destroys red blood cells, threatening organ damage, heart
attacks, stroke and blood clots.

The list price is more than $500,000 annually in Canada — and treatment
life-long — but the provinces banded together to negotiate a lower figure,
a process since applied to several other drugs.

The discounted price, though, is kept secret at the company’s request.

Soliris has also been approved to treat atypical hemolytic uremic syndrome
(aHUS), a genetic disorder believed to affect 60-90 Canadians, causing
dangerous blood clots. The annual treatment cost is $700,000, according to
the PMPRB. Quebec is the only province to pick up the cost for those
without private coverage.

The group representing aHUS patients says it does not have a position on
the price, but notes it has been a stumbling block to provincial coverage
for a lifesaving medication.

“We have been waiting for two years since Soliris was approved by Health
Canada and while we wait, patients’ lives continue to be at risk,” said
Michael Eygenraam of aHUS Canada.

Soliris is the most striking example of a recent, controversial trend
toward highly priced medications, often to treat relatively rare
conditions. The University of British Columbia’s health-policy centre has a
conference on the topic planned for next month — called “Sticker Shock.”

Does it still make sense, though, for the PMPRB to regulate drug costs by
comparing the published list prices in different nations? Experts say the
system is relevant to workplace and other private drug plans, and to people
paying out of pocket for prescription medicines, who tend to be stuck with
the list price.

But it means little for provincial plans that — similar to counterparts in
other countries — are negotiating lower costs behind closed doors, said
Michael Law, a health-policy professor at the University of British

“It’s like comparing the sticker price in one car dealership to the sticker
price in another car dealership,” he said. “When we don’t know what the
underlying bargained prices are, then we don’t know if we’re higher or

That said, the process has some value in protecting Canadians against
paying more than other, similar jurisdictions, said Steve Morgan, another
pharmaceutical policy expert at UBC.

“The PMPRB’s system is flawed, but it’s at least an absolute minimum safety
net,” he said. “And if we’re hitting that safety net, there probably is an
issue to be taken up.”

More information about the Ip-health mailing list