Someone else is getting rich here - and its not the patient

I have often wondered why medications are so expensive here and so cheap in other countries. I read this really long article, which focuses on asthma drugs but can be applied to any prescriptions:

I learned this:

"In all other developed countries, governments similarly use a variety of tools to make sure that drug manufacturers sell their products at affordable prices. In Germany, regulators set drug wholesale and retail prices. Across Europe, national health authorities refuse to pay more than their neighbors for any drug. In Japan, the price of a drug must go down every two years. 

Drug prices in the United States are instead set in hundreds of negotiations by hospitals, insurers and pharmacies with drug manufacturers, with deals often brokered by powerful middlemen called group purchasing organizations and pharmacy benefit managers, who leverage their huge size to demand discounts. The process can get nasty; if mediators offer too little for a given product, manufacturers may decide not to produce it or permanently drop out of the market, reducing competition."

So basically here in the US we are held at the mercy of the drug manufacturers and their middle men.

And here's this little kicker. The manufacturers always say the research costs drive up the costs of their drugs. But how about this little factoid:

"Critics counter that drug companies spend far more on marketing and sales than the 15 percent and 20 percent of their revenues that they devote to research and development."

In the real world, most companies budget a lot less of their revenues for marketing... Do we really need those ads with the disclaimers that make things sound horrible?

So my thoughts now are:

1. We really need a system to tell drug companies we will not be at their mercy and medications must be made available at affordable prices
2. Drug companies are getting rich at the expense of patients
3. Because of the high costs of drugs, insurance companies are getting involved in decisions which should be left to doctors
4. And to the drug companies, I would like to say "liar, liar, pants on fire" to their claim their research costs are what drive their high drug costs.

The real problem is not the patient's

This is crazy. The breast cancer patients covered by Britain's National Health Service will not have Afinitor made available to them - because of the cost. And Novartis' reply? A blow for the patients.

Sorry I am not buying this one. It is a problem for the patients. But the real problem is for the manufacturer.

The UK gave it a cost of 68,000 pounds (>$100,000)/QALY (Quality Adjusted Life Year). Now the QALY is a fancy term but you get the basic idea.

The real problem is the manufacturer is putting all their costs on the backs of the patients again.

I just don't have a lot of sympathy for an industry which is doing quite well full of high salaries, perks, funded research and more. Then they hire all their lawyers and put together all the fancy promotion and packaging and try to justify the high prices they want.

I think it should never be the patient's problem but should go back to the originator - which is the manufacturer here.

Show me the data but don't charge me an arm and a leg

In the past the biotechnology industry enjoyed a cost and procurement system where drugs were provided at the cost set by the provider. Now there is change coming in the industry where the value of the drugs must be proven before being accepted. They now will be forced to sell good outcomes and at a lower cost.

While the industry stock levels are running at a long term high and the FDA has approved a record number of drugs, the winds of change are shifting on through. On Monday, there was an executive meeting at the Biotechnology Industry Organization convention in Chicago where this issue was discussed in detail. 

"The national health care overhaul, the shift toward personalized medicines targeting smaller patient populations, and tougher reimbursement standards by commercial health insurers in the United States and government payers in Europe are changing the game for biotechnology start-ups and pharmaceutical giants alike, Burrill said.

“We as a health care system are at a pivotal moment,” said David Meeker, chief executive of the Genzyme division of Sanofi SA in Cambridge. “Economic growth in the Western world is negligible to negative. Everyone’s taking a hit. That’s translating into increased pressure on health care spending. The trend is to spend less.”

Drug makers once could count on a straightforward regulatory process and automatic reimbursement for approved medicines. But the process for getting experimental drugs to market has grown longer and costlier as regulators demand more patient-specific data before granting approval. At the same time, payment regulations have become more variable and less certain.

“The payers used to just pay,” Burrill said. “Now they want proof that drugs can improve outcomes and lower costs. And the way you do that for the French versus the way you to it for the Chinese versus the way you do it for Aetna or Kaiser Permanente is all different.”

Industry executives discussed the new dynamic at a Monday session on “pay for value” in the drug business, but there was little agreement on how to define the value of new medicines."

Payers are demanding more data showing benefits before covering them. Manufacturers are creating more and more drugs for smaller populations - for the rarer ailments. Insurers are also reluctant to pay for new expensive drugs to treat common conditions such as diabetes or heart disease.

These changes are causing pharma companies to look at how they do business and partner with other companies, particularly smaller ones, to reduce their risks. I hope to see this continued change s that medications become more affordable and insurance companies are not denying new drugs  because the costs are too high. The doctors should be the one making the decisions on which medications are appropriate for their patients, not the pharmaceutical companies nor the insurance companies.

The FDA isn't always the bad guy.

We like to think of all the alphabet government agencies as the bad guys. They are the big brother that is overlooking everything we do, think, eat, wear, breathe, etc. But maybe this time the FDA is not the bad guy.

There is a massive problem with shortages of oncology and anesthesiology drugs in the US. Most of them are related to manufacturing problems when they are shut down for failed FDA inspections. Others have tried to claim that the FDA doesn't concern themselves with potential shortages when they cite manufacturers but that is not the case. The FDA tries to work with the manufacturers to prevent shortages and tries to get substitute drugs that are manufactured to US specifications overseas.

So where does the problem lie? In an aging manufacturing infrastructure. Hmmm.... so the same people that charge upwards of $10K per dose cant keep their manufacturing facilities up to par? I fail to sympathize here. They are supposed to be saving lives not killing people with defective drugs.

A really big fine but did they learn anything

Horrors! Glaxo SmithKline was fined $3 billion (that's with a 'b', not an 'm' folks) for marketing drugs for purposes for which they were not approved and for paying doctors kick backs to prescribe these drugs. $1 billion is for the criminal offenses and the other $2 billion is for the civil liability.

Kick backs and illegal use of the drugs. And apparently they are not alone in these practices. According to their website their annual sales are in the range of $28 billion so this is going to hurt them. Unless they have some fancy insurance policy which covers this.

There are laws in place that are there to prevent this. I hope that this shows that there are teeth behind the law and that other companies cease these practices. Not to blame GSK solely but we do want to assume the laws are in place to protect us patients.