[Ip-health] OncLive: Enzalutamide Pricing Debate Goes to Washington

Zack Struver zack.struver at keionline.org
Mon May 2 09:09:45 PDT 2016

Full story here:

A few quotes I pulled out are below:

Enzalutamide Pricing Debate Goes to Washington

Tony Hagen

Published Online: Sunday, May 1, 2016


Recognition of the medical value of the drug has already resulted in
dramatically expanding revenues for its owners, licensees, and
stockholders. The patents are held by San Francisco-based Medivation, and
Japan-based Astellas is a sub-licensee. According to The Centers for
Medicare & Medicaid Services (CMS), total Medicare spending on Xtandi grew
from under $35 million in 2012 to nearly $447 million in 2014. During that
time, the number of patients shot up to 11,800 from 2143. In 2014, the
average enzalutamide capsule price for Medicare was $69.41, or $101,000 per
year. All combined, the US market was forecast to represent 61% of Xtandi
sales in 2015, according to the Astellas 2015 annual report.

US policies that forbid CMS from negotiating drug prices or refusing to
purchase drugs are partly responsible for the high prices of drugs like
enzalutamide in the United States, said Leonard Saltz, MD, chief of
gastrointestinal oncology at Memorial Sloan Kettering Cancer Center
(MSKCC). “It’s not in the public interest to have, on the one hand,
government money being spent to an extremely large degree on drugs and, on
the other hand, to have the government’s largest purchaser—CMS—forbidden
from negotiating price or forbidden from walking away from a drug if the
price is felt to be unreasonable relative to the amount of benefit that it
supplies,” he said.


Saltz said that drug discount programs and subsidies do not adequately
compensate for shortfalls in insurance coverage and that many patients are
left empty-handed. “Most of the drug assistance programs are for very
limited numbers of people. One has to be wealthy enough not to be on
Medicaid and poor enough to be below certain levels. There are many people,
who for one financial reason or another, cannot get drugs or are getting
drugs with very substantial copay penalties.” Programs through which drug
makers make charitable contributions to organizations that turn around and
provide financial assistance to patients actually tend to function as
price-supporting mechanisms that keep drugs out of reach, he said.

Companies can earn a fair profit without charging such high prices, Saltz
argues. The problem, as he sees it, is that intensive lobbying by the
pharmaceutical industry has led to creation of a system that allows these
market dynamics to persist despite evidence that it is contrary to the
public interest. “There’s a reason that so many Wall Street dollars are
rushing into these areas. It’s become highly, highly lucrative. I’m all in
favor of capitalism, and I’m all in favor of companies that have true
innovations profiting from them to a reasonable degree, but I believe that
we have companies and their shareholders who are profiting to an
unreasonable degree, and therein lies the problem,” Saltz said.


Businesses Get Hurt by High Prices Too

Cheryl Larsen, vice president of the Midwest Business Health Group, said
that one thing that gets overlooked in the debate over soaring drug prices
is that even if high-priced drugs are made available to patients, the
paying institutions often end up being gouged, which has the consequence of
forcing up premiums and ultimately leaving covered populations worse off
than before. “Approximately 51% of all healthcare costs in this country are
paid for by public and private employers, with the rest of it being covered
by the government,” she said. “We are the real payers, not the health plans
and not the PBMs (pharmacy benefit managers). We know we can’t do much
about the cost of pharmaceutical drugs right now. That may change in the
future if the government steps in, but we doubt that will happen,” Larsen
said. “If we don’t get control of costs, we risk having employers,
especially large employers, and then all employers, exiting the healthcare
system. No one wants to see that happen, because employers really, really
do care about the health and the wellbeing of their employees.”


Zack Struver, Communications and Research Associate
Knowledge Ecology International
zack.struver at keionline.org
Twitter: @zstruver <https://twitter.com/zstruver>
Office: +1 (202) 332-2670 Cell: +1 (914) 582-1428

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