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Living in America with a chronic disease: Drug prices here and why they are so high.

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By: Mohor Sengupta Ph.D.

Image by Liz Masoner from Pixabay 

The USA has the highest average prices on drugs compared to all other developed nations across the globe. The average expenditure on drugs per person is around $1200 per year in the U.S., while it is roughly $750 in Canada, according to a 2014 survey. Let us look at a specific example. Nexium is a drug that helps reduce stomach acidity. It is manufactured by AstraZeneca in Sweden and sold to customers in the U.S., Canada, U.K., Australia, New Zealand, India and Turkey. The 40 mg pill costs $3.37 in Canada, $2.21 in the U.K., Australia and New Zealand, less than 37 cents in India and Turkey and $7.78 in the U.S. Specialty medicines, like those used for cancer can cost $10,000 a month in the U.S

Fred Smith, whom I interviewed recently, is a 26-year-old freelance musician and trumpet instructor. Shortly after his 26thbirthday, his health insurance coverage under his mother’s provider plan ended. He went on to buy his medical insurance from the private provider Blue Cross Blue Shield only to realize that he had to pay nine times the cost for each of two medicines, Vyvanse and Viibryd, and 18 times the cost for a third medicine, Adderall, compared to the amount paid while on his mother’s insurance. 

So why do Americans pay more for their medicines? 

  • Drug manufacturers in the U.S. can set the price of their products. 

While this is not the norm elsewhere in the world, federal law in the U.S. does not allow FDA or public insurance providers to negotiate drug prices with manufacturers. Medicare Part D is a 2003 legislation that prevents the nation’s largest single-payer health system from negotiating drug prices. Medicaid, which is the public healthcare program for people with limited income and resources, must cover all FDA-approved drugs, irrespective of the cost. However, drug makers must provide rebates to the government for drugs billed to Medicaid. In general, the biggest cost of medicines is borne by Medicare and private insurers. Private insurance providers do not usually negotiate prices with drug manufacturers. This is because middlemen or third-party pharmacy benefits managers that administer prescription drugs, such as CVS Health, receive payments from drug companies to shift market share in favor of these insurers. These deals also leave consumers with a limited choice. 

Drug makers in the U.S. not only set their own prices but they are also authorized to raise prices. Martin Shkreli became the “most hated man in America” overnight when he raised the price of a generic anti-parasitic drug Daraprim from $13.5 a pill to $750 a pill, a 5000% increase. Mr. Shkreli explained to critics that the hike was warranted because Daraprim is a highly specialized medicine and likened it to an Aston Martin previously sold at the price of a bicycle. He added that the profits from the price increase would go into improving the 62-year-old recipe of the drug. 

Deflazacort, a steroid used to treat Duchenne muscular dystrophy, is a generic compound that has been available worldwide for decades and costs $1000-$2000 per year. Yet, Illinois-based Marathon Pharmaceuticals acquired FDA approval to sell deflazacort under the brand-name Emflaza at $89,000 per year. 

Speaking of generic drugs, here is the next big reason for unaffordable brand-name medicines. 

  • Government-protected monopolies for certain drugs prevent cheaper generics from entering the market. 

The U.S. has a patent system that allows brand-name drug makers to retain exclusive selling rights for 20 years or more. Makers of drugs for rare diseases can also enjoy indefinite monopoly of sale. Moreover, these rare drug makers can extend their solo market dominance by making minor and non-therapeutic modifications to the patented product, like changing the dye component in the coating. They also often pay generic manufacturers to delay their products from entering the market. 

Additionally, FDA approval of generics following expiration of brand-name drug patents can be a long process; it can take up to 3-4 years for generic drug manufacturers to get FDA approval. It is estimated that prices of generic medicines fall to 55% of the brand-name medicine price once two generics enter the market and 33% of the brand-name cost when five generics become available. 

However, why would a brand-name manufacturer applying for a patent cite an unaffordable price to begin with?

  • Unjustified cost of research and development are cited by drug makers. 

It is generally agreed among critics that drug makers put an unjust price on their product citing the research that went into producing it. Because most of the R&D is funded by the National Institutes of Health via federal grants or by venture capital, the cost of research cited by the drug makers is above exaggeration. In reality, companies spend no more that 10-20 percent of their revenue on the research. 

Sofosbuvir was made by Michael Sofia, a scientist with a Princeton-based pharmaceutical company called Pharmasset. He even received the 2016 Lasker-DeBakey Clinical Medical Research Award for inventing it. Sofosbuvir is recommended for management of hepatitis C. After Gilead Sciences acquired Pharmasset for $11 billion in 2011, it applied to FDA for a new drug combining Sofosbuvir and Ribavirin, first made in 1972 by scientists at International Chemical and Nuclear Corporation (currently Canada-based Bausch Health Companies). Gilead priced their product at $84,000 for a single course of treatment in the U.S. The pricing caused a huge controversy when patients on Medicaid were denied the drug until becoming seriously ill. Moreover, generic licensing agreements to produce Sofosbuvir in 91 developing countries, which bear the burden of more than half the world population with hepatitis C, came under fire when Gilead asked for prices unaffordable by consumers in these countries. 

This brings us to the final cause of high drug prices. 

Doctors are often unaware that their prescriptions could be cheaper for their patients if they purchased two generic medicines instead of the brand-name prescription drug that is just a combination of the two. Vimovo, manufactured by Horizon Pharma, is a drug used to treat symptoms of osteoarthritis, rheumatoid arthritis, and ankylosing spondylitis. It is a combination of two generic medicines, naproxen (brand-name Aleve) and esomeprazole (brand-name Nexium). Naproxen is the anti-inflammatory component (NSAID) and esomeprazole is the aforementioned stomach-acidity reducer. It is added to the combination to reduce side effects of the NSAID. Whereas a month’s supply of Aleve and Nexium cost one patient $40, his insurance company was billed $3252 for the same supply of Vimovo. Moreover, not everyone who uses NSAIDs experiences stomach problems and do not need the additional esomeprazole component. 

Several Americans do not fill their prescriptions because they cannot afford to. Data show that 36 million Americans between the ages of 18 to 65 did not fill their prescriptions in 2016. Many resort to buying medicines online from foreign sellers or get them imported. Both routes are illegal and therefore we do not know the exact percentage of the population participating in these practices. 

I interviewed Tammy Connor, who regularly gets her medications from abroad. Tammy takes Synthroid, a brand-name drug, which is used to manage symptoms of hypothyroidism. She has been procuring it from Canada at 1/3rd its U.S. price for many years. In the middle of 2018, the U.S. began blocking drug purchases from Canada, preventing her from continuing this cost-saving practice. Eventually, she got a referral to a U.K.-based drug company called Medix Pharmacy, where she pays 1/3rd the amount that she would have to pay if she purchased Synthroid from the U.S. “Ironically, Medix gets its Synthroid supply from Canada”, Tammy said.

Big Pharma” is a major lobbying group in the U.S. This is a group of a few gigantic pharmaceutical companies which have together kept their profit margins rising amidst public outcry of drug unaffordability. Big Pharma also includes corporations that push overpriced drugs to customers. With their deep pockets, they can spend astronomical amounts on advertising and lobbying. 

Unaffordable prices of life-saving medicines cause many people to skip taking necessary medications, thanks to the Big Pharma. Now, more than ever, is the time that something was done about this. 

Recommended links: 

  1. http://money.com/money/4462919/prescription-drug-prices-too-high/
  2. https://jamanetwork.com/journals/jama/article-abstract/2545691
  3. https://www.cnbc.com/2017/05/10/americas-10-most-expensive-prescription-drugs.html
  4. https://www.renalandurologynews.com/home/news/almost-1-in-10-americans-cant-afford-medications-says-cdc/

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Written by sciencepolicyforall

May 9, 2019 at 4:23 pm

Science Policy Around the Web – January 11, 2019

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By: Mary Weston, Ph.D.

1600px-aedes_albopictus

Source: Wikimedia

A Virus Even More Dangerous Than Zika to Pregnant Women

According to a recently published paper, Rift Valley Fever Virus (RVFV), a mosquito-borne virus found in Africa and the Middle East, may be even more damaging to fetuses than the Zika virus.

RVFV largely affects livestock, causing death and 90%-100% abortions in cattle. In humans, RVFV infections cause anything from mild flulike symptoms to severe liver problems. In 2016, a study associated the development of RVFV infection while pregnant with an increased likehood of miscarriage, but nothing further was known. However, a new study published last month in Science Advances shows that RVFV may severely harm human fetuses if contracted by women while pregnant.

The paper investigated how the virus affects pregnant rats, finding that 40% more pups died compared to uninfected controls and all surviving offspring contracted the virus. Further, the infected mothers’ placentas contained more virus than any other tissue. Upon testing human placenta tissue, they discovered that RVFV infects specialized cells that supports the region of the placenta where nutrients flow in, an area typically resistant to viral infections. According to the Dr. Amy Hartman, the infectious disease specialist at University of Pittsburgh who led the study, “Zika must take the ‘side roads’ into the placenta to infect a fetus, while the Rift Valley fever virus can take the ‘expressway.’”

Given that RVFV is carried by the same mosquitos found in Europe and America, there is a risk the virus could spread beyond Africa and the Middle East. Currently, there are no human vaccines or treatment for Rift Valley Fever and the World Health Organization has classified the disease as a potential public health emergency. Last week, the Coalition for Epidemic Preparedness Innovations launched a call for proposals to develop human vaccines against RVFV and Chikungunya virus, providing $48 million to finance up to eight projects

(Emily Baumgaertner, New York Times)

 

Prescription Drug Costs Driven By Manufacturer Price Hikes, Not Innovation

A new report published in Health Affairs argues that the rampant cost increase of many prescription drugs in the US is primarily due to price inflation, not the entry of new products or improvements to existing therapies.

The study compared pharmacy claims from the University of Pittsburgh Medical Center Health Plan and pricing data from First Databank, a company that collects prescription drug sales data, over the period of 2008-16. They found that the average costs of brand-name oral drugs annually increased 9.2%, while brand-name injectable drugs increased an average of 15.1% every year, five to 8 times the rate of general inflation. For example, the Health Care Cost Institute cited that the cost of insulin doubled from 2012-16.

The costs of generics and specialty drugs also increased during these time periods, but the authors determined that was due primarily to new product entry. During 2008-16, many blockbuster brand-name medications, such as Lipitor, lost their patent protection. There is typically lag time between becoming a generic and the time required to file generic applications. Thus, initial prices of generics are more closely matched with brand-name prices until more competition enters the marketplace, which factored into the report’s observed increase in generic pricing.

William Shrank, the chief medical officer of the UPMC Health Plan and an author on the study, argues that since rising costs are not improving treatments, policy makers may want to get involved. “This observation supports policy efforts designed to control health care spending by capping price inflation to some reasonable level,” he says.

Total US spending on prescription drugsin 2017 was $333 billion, a 0.4% increase from 2016, but a 41% increase compared to $236 billion in 2007. Additionally, according to a 2017 Commonwealth Fund study, US residents pay more for medications than any other high-income countries. Recently, efforts towards lowering/regulating prescription drug costs has received bipartisan support and this new report may help further those proposed regulations.

(Alison Kodjak,NPR)

 

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January 11, 2019 at 4:44 pm

Science Policy Around the Web – September 11, 2018

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By: Liu-Ya Tang, Ph.D

20170610_Gene editing

Source: pixabay

New Therapies

Here’s what we know about CRISPR safety – and reports of ‘genome vandalism’

Since its discovery in 2012, CRISPR-Cas9 has become a popular gene-editing tool forr removing, adding or altering sections of the DNA sequence in the genome. It has been widely used in research settings because it is efficient, precise and cheap. Beyond that, there is a growing interest in applying CRISPR techniques in treating human diseases which are caused by genetic mutations. Firms such as CRISPR Therapeutics, Intellia Therapeutics and Editas Medicine are conducting clinical trials of therapies using CRISPR. For example, one of the pipelines from CRISPR Therapeutics is a gene-editing Phase I/II trial for beta-thalassemia and sickle cell disease, which are caused by mutations in β-globin gene. Hematopoietic blood cells, which are the stem cells that generate red blood cells, are taken from the patient. After genetic correction, the cells are then reintroduced to the same patient. The hope is that the “revised” stem cells will produce normal red blood cells, which will cure the disease, relieving the patients from a lifetime of blood transfusions. Furthermore, there are other clinical trials of treatments for Hemophilia, Duchenne muscular dystrophy and cystic fibrosis by CRISPR. In China the technology has been used to treat patients with oesophagus cancer.

Though there is great potential for applying CRISPR to cure human diseases caused by various genetic mutations, cautionary measures need to be implemented while the safety of this technology is being debated. Several studies have raised concerns that CRISPR may not be as effective as previously thought, and in some cases it may produce unwanted side effects. The data have shown that applying CRISPR-Cas9 system on human body may cause stress to cells and some people may not be responsive to CRISPR-based therapy if their immune system has developed an immune defense against the CRISPR protein. Additionally, studies show that CRISPR-Cas9 may cause off-target DNA damage during genome editing, and the rate is about 1 to 5 percent. However, the clinical application of CRISPR editing is a work in progress. Hopefully new versions of the technique with improved accuracy and efficiency will be used to treat genetic diseases in the near future.

(Jianhua Luo, The Conversation)

Public health

Hospitals are fed up with drug companies, so they’re starting their own

Shortages of critical generic drugs and price spikes on old drugs have plagued hospitals in recent years. To resolve this, a group of major American hospitals are launching a nonprofit and independent generic drug company, which is called Civica Rx.

The company’s mission is to “make sure essential generic medicines are affordable and available to everyone”, so it will focus initially on establishing price transparency and stable supplies for 14 generic drugs used in hospitals. Civica is backed by seven large health systems and three philanthropic groups including Mayo Clinic and HCA Healthcare, collectively representing about 500 hospitals. A commitment of $100 million from governing members have been contributed to the effort, and member health care organizations have agreed to buy drugs from Civica based on the long-term contracts.

The list of 14 drugs haven’t been disclosed because of competitive reasons, but they include generic drugs that underwent price increases of 50 percent or more between 2014 and 2016 and essential medicines that were on national shortage lists. It is estimated that the first drug from Civica could hit the market next year.

The establishment of Civica would present a “threat” to other pharmaceutical companies that make the same generic drugs. There is a possibility that those companies will temporarily cut their prices to maintain the market share. But Civica leaders say the model of guaranteeing a steady supply at a fair, transparent price will be attractive to hospitals. Martin VanTrieste, chief executive of Civica, hopes that the entrance of 14 generic drugs to the market is a good correction for the over-priced drug market and the company would expand if the market place cannot be fixed by adding these 14 drugs.

(Carolyn Y. Johnson, The Washington Post)

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September 12, 2018 at 8:56 am

Science Policy Around the Web – May 11, 2018

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By: Mohor Sengupta, PhD

Tablets Nutrient Additives Dietary Supplements Pills

source: Max Pixel

Drug prices

Why Can’t Medicare Patients Use Drugmakers’ Discount Coupons?

With high drug prices, affordability of specialized medicines is a matter of concern for many individuals, especially those on life-saving brand-name drugs.

Manufacturers of brand-name medicines provide discount coupons to people with private health insurance. Such discounts are denied for people with federal healthcare plans such as Medicare or Medicaid. For example, for one patient on Repatha (a cholesterol reducing drug), the co-payment is $618 per month with the Medicare drug plan, but it is only $5 for patients with commercial insurance plans. This discrepancy has resulted in a “double standard” because arguably, the discount is denied to the people who need it most, that is the retired population subscribing (compulsorily) to federal healthcare programs.

Drug manufacturers have an incentive to offer discounts on branded medicines as they increase the likelihood of purchase and results in greater access to and demand for the products. While these discount coupons are immensely beneficial for life-threatening conditions for which generic drugs are not available, a 2013 analysis has shown that lower cost generic alternative and FDA approved therapeutic equivalent was available for 62% of 374 brand-name drugs.

The federal government has argued that with the discount coupons, patients might overlook or be discouraged from buying cheaper variants of the brand-name drug. Even if a patient chooses to use a brand-name drug with a discount coupon over cheaper alternative, their health insurance plan still has to pay for the drug. That amount maybe more than Medicare or Medicaid may be willing to pay. This has resulted in the federal anti-kickback statute which prohibits drug manufacturers to provide “payment of remuneration (discounts) for any product or service for which payment may be made by a federal health care program”.

One important question is why do drug makers sell the brand-name drugs at a much higher price bracket when generic, cheaper options are available? In the present scenario, insurance companies should make the judgement about whether they are willing to cover such brand-name drugs for which generic alternatives are available. Often doctors prescribe brand-name drugs without considering their long-term affordability by patients. It is the responsibility of doctors and insurance providers alike to determine the best possible drug option for a patient.

Taking in both sides of the picture, use of discounts must be exercised on a case basis. It must be enforced for specialized drugs against which generic alternatives are not available and which are usually used for severe or life-threatening conditions. Currently for people with such conditions and on federal healthcare plans, affordability is a major challenge.

(Michelle Andrews, NPR)

 

EPA standards

EPA’s ‘secret science’ rule could undermine agency’s ‘war on lead’

Last month the Environmental Protection Agency (EPA) administrator, Scott Pruitt issued a “science transparency rule” according to which studies that were not “publicly available in a manner sufficient for independent validation” could not be used while crafting a regulation. This rule is at loggerheads with Pruitt’s “war on lead” because a majority of studies on lead toxicity are observational, old and cannot be validated without consciously exposing study subjects to lead.

Lead is a potent neurotoxin with long term effects on central nervous system development. It is especially harmful to children. There are several studies showing lead toxicity, but many do not meet the inclusion standards set by the EPA’s the new science transparency rule. Computer models developed to assess lead toxicity, which played important role in EPA’s regulations on lead in the past, have amalgamated all these studies, including the ones that cannot be validated. If the science transparency rule is retroactive, it would mean trashing these models. An entire computer model can be rendered invalid if just one of its component studies doesn’t meet the transparency criteria.

Critics say that the transparency measure will be counter-effective as far as lead regulations are concerned. “They could end up saying, ‘We don’t have to eliminate exposure because we don’t have evidence that lead is bad’”, says former EPA staffer Ronnie Levin. Another hurdle is the proposed data sharing requirement. Lead based studies tend to be epidemiological and authors might be unwilling to share confidential participant data.

Bruce Lanphear of Simon Frazer University in Canada is skeptical of EPA’s intensions because the agency has not imposed similar transparency measures for chemical companies like pesticide producers.

Finally, this rule could set different standards for lead safely levels in different federal agencies. Currently Center for Disease Control and Prevention (CDC) and Department of Housing and Urban Development (HUD) consider 5 micrograms per milliliter of lead in blood as the reference level. The EPA rule could lead to a new reference level, leading to discrepancies when complying with agencies across the U.S. government.

(Ariel Wittenberg, E&E News)

 

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May 11, 2018 at 10:24 pm

Science Policy Around the Web – June 23, 2017

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By: Saurav Seshadri, PhD

Drug Policy

Trump’s New Policy to Tackle Sky-High Drug Prices Makes Sense — Sort Of

Tackling high prescription drug prices was a repeated promise of the Trump campaign. The Trump administration has now taken its first step towards fulfilling this pledge, outlined in a blog post by Food and Drug Administration (FDA) commissioner Scott Gottlieb. The agency will pursue a Drug Competition Action Plan, whose goal will be to eliminate obstacles to the development of cheap generic drugs – particularly those caused by loopholes in existing FDA policies, which are exploited by pharmaceutical companies to extend their patent exclusivity period and maximize profits. An example of such ‘gaming’ the system, cited in the post, is the practice of limiting access to branded products for comparative testing by generic developers. Ultimately, the FDA will work closely with the Federal Trade Commission (FTC) to address such issues, since directly regulating business practices is outside its mandate.

On its face, the FDA’s effort is a step in the right direction. Availability of generics reduces the cost of medications by over half within the first year, and according to a recent Congressional report, manufacturers state that ‘competition…is the primary driver of generic drug prices’. However, it ignores evidence that the real driver of increased drug spending is new, branded medicines, not overpriced generics. In fact, early indications are that Trump’s policies will favor the pharmaceutical companies that produce such medicines, by reducing regulations and apparently abandoning his promise to enable the government to negotiate drug pricing through Medicare. Overall, these actions signal a commitment to promoting free market mechanisms in the pharmaceutical industry; time will tell whether this approach will actually lead to more affordable drugs. (Julia Belluz, Vox)

Cancer

In a Major Shift, Cancer Drugs go ‘Tissue-Agnostic’

With the landmark approval of Keytruda in May, the Food and Drug Administration (FDA) appears to have ushered in a new era of cancer drug development.  So far, cancer treatment and drug evaluation have largely used the tumor’s tissue of origin as a starting point. Keytruda (an immune system enabling drug developed by Merck and approved for melanoma in 2014) marked the first departure from this approach, receiving priority approval to treat any solid tumor containing a mutation in the mismatch repair pathway, regardless of context. Recently released data suggests that another tissue-agnostic cancer therapy is on the way: larotrectinib (a cell growth inhibitor developed by Loxo Oncology) showed high efficacy for any tumor with a certain biomarker (TRK fusion). Several other such drugs, whose indications will be based on tumor genetics rather than location, are in the clinical pipeline.

Although these advances have generated significant excitement in the cancer community, some caveats exist. First, identifying the patients that could benefit from tissue-agnostic treatments will require individual initiative and depend on the cost of screening, particularly when considering markers that are rare for a certain tumor type. A potential solution is suggested by the NCI-MATCH trial, part of the NIH’s Precision Medicine Initiative (PMI) – in it, patients can enroll in one of several parallel clinical trials if a corresponding drug-targeted mutation is found in their tumor’s genome. If these trials prove effective, patients could eventually be regularly matched with a personalized, tissue-agnostic, biologically valid treatment, based on a standardized screen.  Second, researchers caution that tissue-agnostic studies should have a strong scientific rationale and/or breakthrough-level efficacy. Otherwise, such efforts ‘could actually slow drug development if there are differential effects across tumor types by diverting resources from enrolling patients in a predominant population or in the tumor type most likely to respond’.

Despite these concerns, the tissue-agnostic paradigm offers great promise for cancer patients. NIH-funded resources such as The Cancer Genome Atlas could be invaluable to this field moving forward. (Ken Garber, Science)

Scientific Publishing

US Court Grants Elsevier Millions in Damages from Sci-Hub

A New York district court has awarded academic publishing giant Elsevier $15 million in damages from Alexandra Elbakyan, founder of the website Sci-Hub, for copyright infringement. Elbakyan, a 27-year-old neuroscientist turned programmer, started Sci-Hub in 2011 with the goal of ‘remov[ing] all barriers in the way of science’. The site allows users to download research papers that would normally be blocked by a paywall, by obtaining credentials from subscribing institutions and using them to access publisher-run databases like ScienceDirect. Over 60 million papers are posted on Sci-Hub, and users downloaded 28 million articles in 2016.

Elbakyan’s case is reminiscent of Aaron Swartz, another high-profile champion of open access to scientific research. Faced with federal charges related to his hacking of journal archive JSTOR, Swartz tragically committed suicide in 2013. Both Elbakyan and Swartz found publishers’ ability to profit from restricting access to scientific literature, effectively withholding knowledge from anyone outside of a privileged inner circle, as well as the legal protection provided to this system, to be deeply unethical. Their willingness to act upon these convictions has earned each a sizable following in the scientific community.

For their part, publishers claim that fees go towards overhead, and point to significant efforts to expand free and open access programs. While judges have so far been sympathetic, Elsevier’s legal battle has been largely one-sided. Elbakyan has been ignoring rulings requiring her to shut down Sci-Hub since 2015, opting to simply change domains instead, and since she is currently based in Russia and has no American assets, she is unlikely to pay any damages. (Quirin Schiermeier, Nature News)

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June 23, 2017 at 11:00 am

The Trans-Pacific Partnership and its Impact on Pharmaceutical Affordability

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By: Shakira M. Nelson, PhD, MPH

        For many, the Trans-Pacific Partnership (TPP) was a point of great debate during the 2016 Presidential primaries and election. As a simplified explanation, the TPP is a free-trade agreement involving the United States, Canada, Australia, Japan, New Zealand, Mexico, Chile, Peru, Brunei, Malaysia, Singapore and Vietnam, intended to “level the trading playing field” through the elimination of tariffs and other laws that create trade barriers. In its final form, the TPP would impact up to one-third of world trade and 40% of the global gross domestic product. Many who debated the ramifications of the TPP did so in the context of foreign policy interests. Although aligned with foreign policy, a major part of the TPP deals with intellectual property protection, and pharmaceutical drug development. If implemented, the effects of the TPP could greatly diminish public access to affordable medicines, both domestically and internationally. Moreover, the stronghold the TPP places on intellectual property could limit the development and marketing of less expensive options.

Intellectual property can be divided into two categories: industrial property and copyright. Patents, trademarks, and industrial design fall under industrial property. Patent development is a large part of scientists’ work, seen as almost a necessity to incentivizing innovation. Many argue that, without the ability to patent inventions and significant findings, scientists would not be able to generate profits used to sustain research and development; within the pharmaceutical industry, patents are the proverbial bread-and-butter. When in place, patents create a stronghold around the release of new chemical drugs, which prevents competition by generic brands. The standard length of time of a patent for a chemical drug is 20 years, which starts from the time the drug is invented.

Many new medicines under development today fall under the category of ‘biologics’. As the name suggests, biologics are treatments made from biological sources, and are very different from chemical drugs. Created to treat a multitude of diseases, including Ebola and cancer, biological sources include vaccines, anti-toxins, proteins, and monoclonal antibodies. Given their structural complexity compared to traditional drugs, and use of recombinant DNA technology, biologics are more difficult, and costlier to make. Moreover, manufacturers have a greater burden in ensuring product consistency, quality, and purity over time. This is done through certifying that the manufacturing process remains the same over time. Because of this, it is estimated that the price to manufacture biologics cost on average more than 22 times the price of chemical drugs. Current laws state that generic biologic development, known as biosimilars, cannot be approved until 12 years after the branded product has been approved – this is known as an exclusivity period. This was enacted under the Biologics Price Competition and Innovation Act of 2009, by the Food & Drug Administration (FDA).

The challenge with current policies is establishing a period-of-time that balances the need for companies to generate profits and cash flows, which will incentive them to conduct more research and compensate them for the extensive manufacturing processes, with the need to provide greater access through launching generic drugs and biosimilars. The trouble with the proposed policies of the TPP agreement is that they seem to embolden the pharmaceutical companies by introducing changes that would prevent competition from generics and biosimilars for longer periods of time than the current basic terms. The implications of this are far-reaching, as it may lead to a significant increase in the current costs of pharmaceutical drugs and biologics, hindering the health of the patients who rely upon these treatments.

Critics of the current system of patent length and biologic exclusivity periods fear that rather than incentivizing innovation, companies are being rewarded through their ability to charge higher amounts for drugs without the fear of competition on the market. Health policy experts concur, identifying policies such as the Hatch-Waxman Act of 1984 in allowing for the creation of drug monopolies, and “going too far in compensating the pharmaceutical industry at the public’s expense”. A report released in 2009 by the Federal Trade Commission stated that biosimilar development was more difficult to achieve than traditional generic drugs. For example, development requires comparisons to the original biologic, to prove efficacy and equivalence. Biosimilars must share the same mechanism of action, with no clinically significant differences in terms of safety or potency for the approved condition of use. The steps necessary to achieve this are significant, and therefore imposing a 12-year exclusivity period on biologics may be unnecessary. US Congressmen have pushed to compromise, floating an amendment to the TPP that would lower the exclusivity period to 8 years. However, critics and patients who rely upon drug competition to lower market prices, have protested this amendment stating that costs of new drugs and biologics are too high, and 8 years is too long of a length of time to wait for affordable generics and biosimilars to come on to the market.

The impact of decreasing the length of time it takes for biosimilars to come onto the market can be seen with Neupogen, a leukemia drug that was first approved by the FDA in 1991. Delivered via injection, Neupogen costs patients $3,000 for 10 injections. With injections needed daily, this drug could carry a price tag of well over $100,000 per year. It wasn’t until recently, however, that the first biosimilar was approved on the US market. The biosimilar, Zarxio, was approved as a leukemia drug and is priced at more than $1000 less than Neupogen. This pricing has the potential to decrease the yearly costs of this drug from $100,000 with Neupogen to $55,000-$75,000. Further evidence of these financial savings was provided by the Rand Corporation, which predicted a savings of over $44 billion over 10 years with an increased approval of biosimilars, for patients who rely upon these specific cancer treatments.

Internationally, the policies of the TPP also have far reaching effects on the availability and costs of pharmaceuticals. The 12-year exclusivity period would be imposed upon the other countries involved in the TPP, where currently for some, such as Brunei, there is no current exclusivity protection. By imposing the 12-year period, global competition could become restricted. Additionally, the TPP proposes other key patent protections that play a bigger role on the international market. One protection, known as evergreening, allows drug companies to request patent extensions for new uses of old drugs. The immediate effect of this is an extension of monopolies on drug sales for minor reasons. The second protection allows pharmaceutical companies to request patent extensions if it takes “more than 5 years for an application to be granted or rejected.” Advocacy groups fear that the price of drugs would undermine the efforts of health initiatives, such as the Global Fund to Fight AIDS, Tuberculosis, and Malaria. These initiatives rely upon price competition to manage costs, with the availability of cheap generics helping drive costs down.

Although the current administration has ended the USA’s association with the Trans-Pacific Partnership, it is important to note that other countries may try to implement some of the policies, affecting the availability and affordability of drug treatments. To decrease this burden, the US could work to assist in negotiating exceptions for the poorer and smaller countries, to help them meet any challenges they may come up against. Within the US itself, it is important for policies, laws and any future trade agreements to be modified, with more of a focus on the affordability and regulation of drugs and biologics. Imposing price controls may offer a modest benefit, but may not be a long-term solution. A focus on lowering the patent length for new drugs and biologics can be an immediate step. Although the push back from pharmaceutical lobbyists will be substantial, alleviating the financial burden on families afflicted with cancer and diseases should be the focus.

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Science Policy Around the Web – October 27, 2015

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By: Amy Kullas, Ph.D.

Drug pricing

After the price gouging by Turing, competitor announces it will offer $1 pill

Martin Shrkeli became infamous after he became CEO of Turing Pharmaceuticals and skyrocketed the price of a Daraprim pill, used to treat toxoplasmosis, from$13.50 to $750, a price hike of over 5000%! At that price, the Infectious Diseases Society of America had estimated that it would cost $336,000/year to treat a patient with toxoplasmosis. Turing acquired marketing rights for Daraprim from Impax Laboratories in August for $55 million; though it had initially been made and sold by GlaxoSmithKline for $1 a pill. The United States has no price control on medicines even though in they are common in Europe.

This move by Shrkeli and the news that other drug makers have bought the rights to old, cheap medicines that are the last resort for serious diseases subsequently raising prices has not only angered patients and physicians. It has triggered government investigations, heavy scrutiny by the media and a plunge in biotech stock prices, as well as becoming a political talk point in the upcoming election to fight “price gouging”.

However, there is a new player in the field. Imprimis Pharmaceuticals announced that it can make a ‘close, customized version’ of Daraprim for about $1 per pill. A current caveat is Imprimis’ formulation itself is not FDA approved, and can only be used when prescribed by a doctor for a particular patient. Imprimis CEO, Mark Baum, released the following statement that “Imprimis is forming a new program called Imprimis Cares which is aligned to our corporate mission of making novel and customizable medicines available to physicians and patients today at accessible prices.” (Maggie Fox, NBC news)

Infectious Diseases

Yersinia pestis has been plaguing humans for over 3000 years

In a recent article published in Cell, Rasmussen et al. published that the plague-causing bacteria Yersinia pestis (Y. pestis) DNA was found in human teeth from Asia and Europe dating from the Bronze Age or ~2500-5000 years ago. This is well before any record of plague. These scientists examined over 100 human skeletons and found that the teeth in seven tested positive Y. pestis DNA. The oldest skeleton was 5783 years old! The authors suggest, “plague may have shaped early human populations.” Their data implies that Y. pestis did not become the flea-borne mammalian pathogen it is today (by acquiring the ymt gene), until sometime in the first millennium BC, well before the historically recorded plagues. (Simon Rasmussen, et al, Cell and James Gallager, BBC News website)

Global Health/Infectious Diseases

Interview with Margaret Chan, director general the World Health Organization

On October 14, 2015, Kai Kupferschmidt, a contributing correspondent for Science, had the opportunity to interview the director general of the World Health Organization, Margaret Chan.  The previous week was the first week that there was not a single new case of Ebola reported. This Ebola outbreak has killed over 11,000 people in almost two years.

During the course of the interview, two discussed many aspects of the current outbreak, including the lack of an initial response and how critical it is to get proper resources to those who need most. She stressed that countries impacted by an outbreak should report the disease while countries not affected by the outbreak should not impose their own trade or travel restrictions other than those recommended by the WHO. Chan has said to the WHO’s member states, “If you want WHO to be strong and fit for purpose, keep your promises. Put your money where your mouth is.”

Unfortunately, the WHO reported two new cases of Ebola in Guinea only two days after the interview on October 16, ending a two-week period in which no new cases had been detected across West Africa. The WHO does not consider a region Ebola-free until 42 days, or double the potential incubation time, have passed without a new case. The other two countries, Liberia and Sierra Leone, which were also heavily impacted by this outbreak, are further out from their last reported cases: Liberia is has met the deadline and is considered Ebola-free, while Sierra Leone is over halfway through the 42 day time period. The 42-day guideline may in fact be just that ‘a guideline’ as the Ebola virus has been isolated from seminal fluid 82 days after symptom onset. (Kai Kupferschmidt, Science)

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Written by sciencepolicyforall

October 27, 2015 at 9:00 am