Sunday, July 28, 2013

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.]

1 comment:

Steinar Andersen said...

We are 42,000 into costs since March and that is 1 cystoscopy and 6 chemo treatments. And it is out of network.