[Ip-health] FT: Hikma’s US unit sharply raises prices of several drugs

Thiru Balasubramaniam thiru at keionline.org
Sun Aug 20 10:17:55 PDT 2017


Hikma’s US unit sharply raises prices of several drugs
West-Ward increase cost of medicines by as much as 430%

By: David Crow in New York

Hikma, the London-listed generic drugmaker, has sharply increased the price
of a string of medicines in the US — including a diarrhoea treatment that
has risen 430 per cent — in the latest instance of “gouging”.

West-Ward Pharmaceuticals, the US division of Hikma, raised the price of
six of its drugs at the start of the month by between 75 per cent and 430
per cent, according to figures seen by the Financial Times. The mean
increase was 237 per cent.

The average wholesale price of a 60ml bottle of liquid
Atropine-Diphenoxylate, a common diarrhoea drug better-known by the old
brand name Lomotil, went from about $16 a bottle to $84 — meaning a single
dose of the 35-year-old medicine now works out at $14.

Since 2004, the price of the product has gone up nearly ten-fold.

The increases show how generic drugmakers are able to command high prices
on products where they have a monopoly or face little competition, even as
the industry struggles to cope with a period of deflation that is squeezing

In the US there are no government controls and buyers must pay whatever the
market will bear.

Of the six drugs, West-Ward is either the only supplier of the products in
the US or one of two manufacturers.

Brian Hoffmann, president of US generics at West-Ward, said the price of 94
per cent of the group’s copycat medicine portfolio had either fallen or
stayed the same in 2017, and that prices had fallen overall this year.

Mr Hoffmann said the company had made “price adjustments” on a “small
number of products [that] required investment . . . to become commercially
viable”. The investments included extra manufacturing capacity and finding
new suppliers of “active pharmaceutical ingredient” — the chemical that
gives a drug its clinical benefit, he said.

Michael Rea, chief executive of Rx Savings Solutions, which makes software
to help patients and employers cut their drug expenses said: “In a
challenging economic environment, manufacturers of generic drugs are forced
to pull strings on the products they maintain leverage on. Unfortunately,
consumers and employers are the ones paying the price.”

All but one of the six Hikma products are liquid versions of drugs that
tend to be available at a much lower price in the form of a tablet, where
the market is more competitive.

For instance, West-Ward charges 19 cents for a 5mg tablet of Prednisone, a
type of steroid used to treat inflammatory conditions such as asthma and
arthritis, but $4 for the equivalent dose in liquid form.

It is the sole supplier of the liquid version, but in the tablet market it
faces competition from several rivals, including Perrigo, the large
Ireland-based generic drugmaker.

The US market for Prednisone, which was approved for human use in the
1950s, was worth about $278m last year, according to QuintilesIMS, the data

Liquid formulations tend to be prescribed for patients who have problems
swallowing pills, such as young children or the elderly, or in settings
where people try to hide that they have not taken their medication, such as
psychiatric hospitals.

David Gortler, a former official at the US Food and Drug Administration,
said he would expect liquid formulations — which often come in glass
bottles — to be slightly more expensive but said they “should not cost that
much more”.

The suggestion that the active pharmaceutical ingredient in the liquid was
more expensive than the pill was “nonsense”, added Mr Gortler, who now
lectures in pharmacology at Georgetown University.

Historically, the price differential has been much lower: in 2004, a 5mg
pill of Prednisone was 12 cents while the equivalent in liquid form was 14

The drugs and their price moves
* Diphenoxylate-Atropine for diarrhoea (60ml bottle); old price $15.83; new
price $84.00; 431 per cent increase

* Propantheline 15mg tablet for excessive sweating (pack of 100); old price
$99.09; new price $300; 203 per cent increase

* Prednisone for inflammatory conditions (120ml bottle); old price $33.14;
new price $96.00; 190 per cent increase

* Digoxin for heart failure and rhythm problems (60ml bottle); old price
$61.60; new price $168.00; 173 per cent increase

* Prednisone Intensol for inflammatory conditions (30ml bottle); old price
$57.53; new price $156; 172 per cent increase

* Lithium for bipolar disorder and mania (500ml bottle); old price $102.42;
new price $180; 76 per cent increase

Thiru Balasubramaniam
Geneva Representative
Knowledge Ecology International
41 22 791 6727
thiru at keionline.org

More information about the Ip-health mailing list