Why Are Drugs So Expensive And Can It Be Changed?

Why Are Drugs So Expensive And Can It Be Changed

Cancer, hepatitis C, orphan diseases are devastating to patients and their families. Zolgensma is worth $2.1 million, and we have to fight for children with SMA and other seriously ill people and pay huge sums of money for the chance to recover.

In 1999, the Nobel Prize laureate, the international organization “Medicine Without Borders” launched a campaign for the availability of medicines under the motto “Medicines should not be a luxury item.”

At that time in the United States, AIDS patients were receiving drugs to enable them to lead a normal life, and thousands of people in Africa continued to die from the disease.

In 2001, the campaign won an important victory. Indian pharmaceutical firm Cipla was allowed to produce a low-cost version of a three-drug combination for HIV that cost $100 a year per patient instead of $10,000 (the price of the original drug). However, many Americans still have to take payday loans GA to afford high-cost treatment. Such loans are very popular today because they have easy-to-meet borrower eligibility requirements and funds can be received the same day you apply. Loan amounts usually range between $100 and $1,000. The borrowed money can be used for whatever purpose, including the purchase of expensive medication.

As a rule, a patent for a drug is valid for 20 years, and no firm (except for the company that owns the copyright) can manufacture and sell it at a lower price. In India at the time, the rules for dealing with intellectual property were different, and pharmaceutical companies produced cheap generics that were sold in developing countries.

Since then, the rules have changed, and when the Hepatitis C drug hit the market in 2013, saving the lives of thousands of patients, and Indian companies attempted to make cheap copies of it, this led to lawsuits against them.

“Our pricing system is a gas car, but no brakes,” said Michelle Mello, a professor of economics and health law at Stanford University.

Where do the sky-high prices come from?

In 2016, the Tufts Center for the Study of Drug Development (Boston, USA) estimated that the development of one drug cost the company $2.558 billion.

The question, however, is what exactly is included in this gigantic amount.

Big Pharma – this is how the group of the largest pharmaceutical companies is collectively called, (Johnson & Johnson, Pfizer, Merck, Gilead, Amgen, Roche, Sanofi, GlaxoSmithKline and some others) – argues that costs need to include not only the cost of the initial components and the production of the drug but also the cost of research, expensive clinical trials and legal procedures to obtain regulatory approval for a drug.

Moreover, while developing a drug for a specific disease, scientists are researching dozens of different compounds in laboratories, most of which do not even reach clinical trials. The cost of unsuccessful studies, according to the pharmaceutical giants, should be paid by the consumer of the successful drug.

These arguments fail to convince patient advocates.

In their opinion, patients are not obliged to pay for the failures of Big Pharma. In addition, often the most successful drugs are developed in the laboratories of universities and research centers funded by the state from citizens’ taxes, and pharmaceutical companies buy promising developments from them and conduct their testing and large-scale clinical trials.

For example, Zolgensma

Zolgensma is Novartis’s spinal muscular atrophy (SMA) drug, priced at $2.1 million per injection, that can stop the disease from progressing in a young child who is otherwise doomed to immobility and early death.

The executive director of the company Vas Narazimkhan believes that the price is justified. The drug is a variant of gene therapy, innovative and highly complex, and at the same time gives the patient long (presumably) years of life. In addition, the only alternative to Zolgensme, the previously created drug Spinraza, costs even less – $750,000 per injection – but one injection is not enough, and a total of ten years of therapy will cost $4 million.

The opponents, however, have their own and quite weighty arguments.

For starters, Zolgensma’s early development was funded by the US National Institutes of Health, that is, from taxpayer money, as well as seven charitable foundations, which, in turn, receive donations from families of SMA patients and their friends.

In addition, Novartis bought an off-the-shelf development from AveXis for $8.7 billion.

And thirdly, the very approach of tying the price of a drug to the number of years of life that it gives to the patient is not entirely logical, because it requires an assessment in monetary units of human life, which opens up a wide possibility of speculation. At the same time, Novartis does not disclose how much it cost to bring the drug to the market.

The argument that using Zolgensma will provide savings compared to treatment with another SMA drug, Spinraza, is also unconvincing. In the real world, for most families whose children suffer from SMA, the difference between two million at once or four in installments is not very noticeable: neither one nor the other is not available to them.

Most often you have to rely on crowdfunding or on a wealthy philanthropist, if you’re lucky. But, alas, not everyone is lucky.

In addition, independent experts from the American Institute for Clinical and Economic Review and medical activists and Spinraza’s price have been harshly criticized.

Most health insurance companies refuse to pay an astronomical amount for one injection of Zolgensma.

There is potential, there is no money

Zolgensma is an orphan drug intended for the treatment of a very rare disease, which means that the market for the sale of the drug is quite small. And although this does not fully explain its astronomical cost, it must be admitted that this medicine cannot be cheap either.

But such a disease as cancer is not only common but also one of the leading causes of death worldwide. Meanwhile, cancer drugs are extremely expensive. Only wealthy people with good insurance can afford them, and in poor countries, they are not available to most.

In January 2019, the World Health Organization announced that, contrary to the claims of the pharmaceutical business, the high cost of developing new cancer drugs does not justify the high prices, although these drugs do increase the life expectancy of patients.

This statement is based on research by WHO experts published in the Journal of the American Medical Association. The experts analyzed the revenues of companies that manufacture 10 cancer drugs in comparison with their cost.

It turned out that, on average, pharmaceutical companies received $14.5 per $1 invested in research and development, and the amount was calculated based on the funds spent on failed tests and clinical trials.

Roche’s drug Ibrutinib became the champion of profitability: its sales revenue exceeded development and production costs by 67.9 times in just 1.3 years!

By the end of 2017, 5 cancer drugs had brought in a total of 60 billion for their firms – Roche, Amgen and Novartis – over a sales period of 1 to 9 years.

“Pharmaceutical companies set prices in line with their business objectives, seeking to maximize revenue based on the amount that the buyer is willing to pay for the drug. This pricing approach often makes cancer drugs unaffordable and hinders the full potential of the drug,” said the WHO expert report.

What can be done?

The problem of the availability of drugs is concerned not only by the WHO, which has compiled a list of critical drugs recommended to countries for procurement at the expense of the state but also by the United Nations.

A commission was created at the UN, which included representatives of Big Pharma, civil society from different countries, as well as scientists. The Commission concluded that the current system of drug development and marketing does not fully respond to the needs of society, especially in poor countries. They still do not have drugs for the treatment of Zika and Ebola viruses, as well as new antibiotics, which are needed in all countries of the world.

In the commission’s report, which was published in September 2016, its authors proposed to “decouple” drug prices from research and development costs. This is quite possible if the business is helped by state funds and philanthropists at the initial stages of developing those drugs that are vital for patients.

Most of the major pharmaceutical firms, with the exception of GSK, whose chief executive officer, Andrew Whitty, served on the panel, was not enthusiastic about the report. Perhaps the point is that it proposes to give governments the right to initiate patent circumvention in certain situations and to allow other pharmaceutical companies to make cheap copies of the original drug in the public interest.

Can the pressure of international organizations force Big Pharma to make concessions?

“The problems of simple diseases have been solved. But there are diseases that pose a major challenge, and it is getting harder and harder for us to find a cure for them,” says Jennifer Taubert, executive vice president of Janssen Pharmaceuticals.

Well, that’s quite fair. And besides, a business is a business, and it will always strive to extract the maximum profit.

However, in the modern world, social responsibility is gaining more and more importance, and civic activists and international organizations are putting more and more pressure on business.

We want to believe that someday cancer, hepatitis C or orphan diseases will not ruin patients and their families.

In the meantime, Zolgensma is worth 2.1 million, and we, as a society, have to fight for children with SMA in the face of the harsh reality of today.

Category: General

Tags: drugs, finance, medication, medicine, pharmacology, pharmacy