Thursday, 27 March 2014

Politics: have the US politicians woken-up to the drug pricing issue?

Drug pricing: the politicians have had enough. I predicted this years ago. #MSBlog #MSResearch

"I have been saying for awhile that the current drug pricing climate in the USA is unsustainable and it will only be a matter of time before politicians realise that the US is subsidising drug costs for the rest of the world. The following is a letter from 3 members of the House of Representatives (Henry Waxman, Frank Pallone and Diana DeGette) summoning John Martin, the CEO of Gilead to attend a briefing to explain their pricing of their new anti-hepatitis C drug. The letter is dated the 20th March and they want to be briefed by no later than the 3rd April. The urgency and tone of the letter implies they are pissed off with Gilead for abusing their position, i.e. Gilead have a very effective drug that may cure people of hepatitis and they want to charge $84,000 per treatment. When the this is added to other treatments this could potentially bring the cost up to $150,000 which will be out of reach of most Americans. They also seemed upset that the drug was given a Priority Review by the FDA and assessed within 6 months; this allows the drug to come to market earlier and hence more profits for Gilead. In the briefing they want the CEO to answer some seriously difficult questions about their methodology for pricing the drug."

" I wonder when the CEO is squirming in the hot seat whether or not he will be brave enough to tell them that European countries will be driving a hard bargain and getting the drug for anything down to a third, or less, of the US price. Why? When socialist healthcare systems negotiate they drive a hard bargain and get drug prices down. For example, glatiramer acetate costs the NHS about one-seventh of the cost in the US. May this grilling of Gilead will be the beginning of the end of very high drug prices in the US compared to Europe?"



"I will not be surprised if John Martins' compensation package is discussed? His received $90 million in 2012. Can any Pharma company justify paying its CEO $90M when people are dying from diseases their drugs can cure, but are unable to access them because they cost too much? This is a moral issue and needs debate!"

"After Gilead it is simply a matter of time before a probing flash-light looks into the MS market. It is clear the MS DMT market in the US is not behaving like a true market; whenever a new drug reaches the market the older drugs go up in price. Why? It is clear that there are no mechanisms in place to bring down the prices. It is also strange how narrow the spread of drug prices are; this indicates to me that the MS drug market in the US is functioning like a cartel. One incentive to bring down the prices is the so called co-payment that MSers have to pay. This is incentive is removed by many Pharma companies paying most of the co-payment for MSers so they are not out of pocket. I suspect this is one loophole the politicians will close. It will be bad news for MSers, but it will lower costs."

"If you are interested in reading more about this Gilead story I would recommend the following article in the Wall Street Journal."

ED SILVERMAN. AIDS Group To Pharma CEO: Lower Your Prices Or Lower Your Pay. 21 March 2014. 

11 comments:

  1. Outrageous; Gilead deserve what is coming there way. Since you have starting doing political posts this blog has become a lot more interesting. I think issues like drug pricing affect us all and need a forum for discussion. I would be interested to hear about what the MS Pharma companies have to say about the issues you raise. Is there any way of letting us know what their CEOs get paid?

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    1. I agree. It's the political posts that I look forward to reading now. I also like the increase in politically-driven comments. It proves just how switched on and intelligent MSers in the UK are

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    2. What their CEOs get paid...the amount is not relevant suffice to say it is alot.:-)

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    3. P.S. The MSers are not just from the UK

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  2. Hmmm, this should be interesting. Wonder how far their net will be cast.

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  3. There are two problems with this. The same thing probably won't happen with the MS DMT market since the occurrence of MS is relatively small compared to other diseases. Many more people probably have hepatitis than MS.

    Probably the bigger problem is the mantra of the "free market" in the U.S., and this unjustified belief that is will create competition. It clearly hasn't worked for the MS DMT market. Heck, it didn't even work in the banking industry.

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    1. It's certainly not worked in the UK energy market where the Big Six have become a cartel driving up prices exponentially.

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  4. As a U.S. citizen I am amazed that officials on the committee do not understand drug pricing, even in their own country. Solvaldi has the potential to cure or eliminate certain HCV genotypes. What is the price of a cure? What would the price be for a MS cure? I think the price of drugs should reflect their efficacy. DMTs are not created equal, why pay 55K/yr for a 40% effective therapy.

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  5. For those those interested (you know who you are) in the involvement of ProfG for his NHS work with the Hospital, his academic appointment with the University and pharma consultancy please read through the blog, this issue has been addressed and is frankly tiresome.

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  6. It will go the other way. The UK and EU will be forced to comply and harmonize with the US prices when TTIP gos ahead. A single market will prevent health systems in the EU from pushing drug prices down.

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