[Ip-health] (Reuters) Exclusive: Americans overpaying hugely for cancer drugs - academic study

Zack Struver zack.struver at keionline.org
Tue Sep 22 08:03:49 PDT 2015


(Reuters) Exclusive: Americans overpaying hugely for cancer drugs -
academic study


Americans are paying way over the odds for some modern cancer drugs, with
pharmaceutical companies charging up to 600 times what the medicines cost
to make, according to an independent academic study.

The United States also pays more than double the price charged in Europe
for these drugs - so-called tyrosine kinase inhibitors (TKIs), a potent
class of cancer pills with fewer side effects than chemotherapy.

    The analysis by pharmacologist Andrew Hill of Britain's University of
Liverpool, who will present his findings at the Sept. 25-29 European Cancer
Congress in Vienna, is likely to fuel a growing storm over U.S. drug costs.

    Democratic presidential candidate Hillary Clinton's declared aim to
lower the cost of prescription drugs by ending what her campaign describes
as "excessive profiteering" triggered a sell-off in drug stocks this week.

    Hill told Reuters he had shared his work on the cost of producing TKIs
with the World Health Organization (WHO), which is keen to add such
treatments to its list of medicines deemed essential for a basic healthcare
system. WHO officials have used the findings in determining that the drugs
can be made at low cost, he said.

The first such TKI was added to the WHO's latest draft Essential Medicines
List earlier this year.

Several widely-used TKIs are expected to become available as generics
within the next five years, as patents expire. Hill calculated that
large-scale production could achieve treatment prices in the range of $159
to $4,022 per person a year, against current U.S. prices of around $75,000
to over $100,000.

"It shows there is a lot of scope for prices to come down," he said. "There
has to be some middle ground between the prices that companies are
charging, which may not even be cost-effective by the standards set by some
healthcare authorities, and the actual production cost."


Drug companies argue that they need to make decent profits to pay for the
billions of dollars needed for drug research. Many companies also have
extensive low-cost or even free access schemes for patients who cannot
afford their medicines.

But the high prices charged for modern drugs is generating increasing
push-back from healthcare providers, patients and some doctors.

Hill used Indian government data on the cost of pharmaceutical ingredients
and allowed for a 50-percent profit margin - but no money for investment in
research - to work out the costs of producing certain drugs.

On this basis, he found that Novartis' leukaemia drug Glivec actually cost
$159 for a year's treatment, against the $106,000 charged in the United

Roche's Tarceva for lung cancer cost $236, against a U.S. price of $79,000,
and Novartis' Tykerb cost $4,000 against a price of $74,000.

In all these cases the U.S. cost was far above that charged in certain
western European countries, where Glivec costs approximately
$29,000-35,000, Tarceva $26,000-29,000 and Tykerb around $35,000, Hill

Roche declined to comment. Novartis said it had no immediate response.

The issue is not unique to cancer drugs. Earlier this month, for example,
Amgen launched its new injectable cholesterol drug Repatha in Europe at
around half the U.S. price.

"Why should the U.S. bear this huge burden cost? It is not as if the GDP of
the United States is so much higher than that of European counties, but
they just seem to pay these big premiums," Hill said.

The future pricing of TKIs could also have major implications for
developing countries, Hill believes, since mass production could open the
way to widespread cancer treatment in the same way that cheap generic drugs
helped fight HIV/AIDS.

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