By Mark Wachtler
April 29, 2013. Houston. (ONN) On Thursday, a group of over 120 cancer doctors released a joint position paper condemning America’s pharmaceutical industry. The cancer specialists accuse the drug industry of ‘profiteering’, ‘price gouging’ and even being ‘immoral’. The group of doctors insists that Big Pharma is charging patients over $100,000 for life-saving drugs that cost only a few dollars to manufacture.
Novartis raised the price of Gleevec 300% to almost $100k annually. It now brings in $4.7 billion in yearly sales to the company. Image courtesy of CBS News.
Consider the following statistic from Thursday’s Yahoo Health, ‘Of 12 new cancer drugs that received FDA approval last year, 11 of them cost in excess of $100,000 a year—prices that the specialists attack as “astronomical,” “unsustainable,” and maybe even immoral. What’s more, only three of these drugs were found to improve patient survival rates and of these, two only increased it by less than two months, according to the Washington Post.’
The report and the price of drugs
The report published last week by the assortment of international cancer specialists was printed in the medical journal Blood, ‘The Journal of the American Society of Hematology’. The extremely critical paper is titled, ‘The Price of Drugs for Chronic Myeloid Leukemia (CML); A Reflection of the Unsustainable Prices of Cancer Drugs: From the Perspective of a Large Group of CML Experts.’
One of the specific examples the doctors referred to was the cancer drug Gleevec, manufactured by Novartis. Typically, more than a decade after any new drug is introduced into the marketplace, its price tag eventually goes down. But in the case of Gleevec, the exact opposite has happened. When it was first sold in 2001, the cost was about $30,000 per year for patients. Today, it costs roughly $100,000 annually. Price gouging such as that is what led to Novartis to rack up $4.7 billion in sales of that one drug in just one year, 2012.
Showing just how blatant and universally known the pharma giant’s overcharging is, even one of the doctors that helped develop Gleevec for Novartis has come out publicly against the company. As detailed in the above referenced Yahoo Health story, Dr. Brian Druker – Director of Knight Cancer Institute at Oregon Health & Science University – remarked, “If you are making $3 billion a year on Gleevec, could you get by with $2 billion? When do you cross the line from essential profits to profiteering?”
Other cancer drugs have also come under fire by the doctors’ association. Another drug from Novartis, Tasigna, is prescribed for leukemia patients. The cancer treatment is another big profit center for the pharmaceutical giant bringing in over $1 billion in sales last year. Another cancer drug that’s been widely criticized, and even boycotted by a number of cancer clinics in the US, is Sanofi-Aventis’ colon cancer drug Zaltrap. According to the doctors, the monthly cost for the drug (roughly $11,063) was more than double that of a similar drug and showed no signs of working any better than its cheaper rival. In response to widespread boycotts, the pharma giant cut the price in half.
Excerpts from the report
While almost half of the 19-page paper is filled with acknowledgments, indexes, footnotes and data sources, the rest of the highly critical report takes issue with the pharmaceutical industry’s actions as well as its allegedly dishonest statistics. For example, pharma corporations insist it costs them an average of $1 billion to research and test a new drug before bringing it to market, and that is one reason for the astronomical price tags. In the report however, the cancer doctors insist independent pharmaceutical experts have put the cost at just a fraction of that, at $60 to $90 million.
It’s also worth noting that one of the report’s co-authors, Dr. Hagop Kantarjian, is currently a paid consultant for a number of drug companies including MBS, Novartis, ARIAD and Pfizer. That detail is important because it shows that even the pharmaceutical industry’s own experts are coming out against what they call immoral profiteering.
While the doctors confirm their support for the free market system and the forces of supply and demand, they suggest that such profit-driven tactics be left out of the life-saving medical industry. ‘One could argue that when a commodity affects the lives or health of individuals, just price should prevail because of the moral implications,’ the report reads, ‘Examples include the price of bread during famines, polio vaccine, ivermectin for river blindness (provided for free by Merck and estimated to save the vision of 30 million individuals).’
The initial pages of the paper set the stage for the cancer doctors’ arguments and examples. They cite three new cancer drugs introduced last year and their shocking price tags. ‘The 3 new drugs, however, have been priced at astronomical levels,’ the paper explains, ‘ponatinib at $138,000 per year, omacetaxine at $28,000 for induction and $14,000 per maintenance course, and bosutinib at about $118,000 per year.’
The doctors also attempt to explain how multinational pharmaceutical corporations come up with their drugs’ price tags. Suggesting it has nothing to do with cost, the report describes how drug companies have instead assigned a price tag for every extra month of life a drug might provide for a terminally ill cancer patient.
One example given is pancreatic cancer. With an average life expectancy of only six months, current drugs might extend the patient’s life by two months, with a price tag of $33,500 per additional month lived, or $400,000 per year. One drug the paper cites, cetuximab, is priced so high it values each additional year of life at $800,000.
While these dollar amounts do not reflect the prices the drug companies charge, they are considered the base cost of what their drugs are worth to the patient. So in the mind of Big Pharma, charging $100,000 per year for a life-prolonging drug is actually a charitable act on their part because the ‘value’ of the treatment is four to eight times that.
Price gouging the United States
The above formula that calculates the price tag drug companies put on each additional month or year of life is also one of the many examples of Big Pharma profiteering off of the American people. As the paper explains, the US gives a value to the various cancer drugs of roughly $400,000 to $800,000 per year of extended life in the US. In the UK however, that value is recognized at only a fraction that inflated amount at $50,000 per additional year of life.
Illustrating their point, the 120 global cancer doctors also included a chart showing three new popular cancer drugs (Imatinib, Nilobinib and Dasatinib), and their cost to patients from country to country (from the Price of Drugs report):
Country Imatinib Nilotinib Dasatinib
US $92k $115k $123k
Germany $54k $60k $90k
UK $33k $33k $48k
Canada $46k $48k $62k
Norway $50k $61k $82k
France $40k $51k $71k
Italy $31k $43k $54k
South Korea $28k $26k $22k
Mexico $29k $39k $49k
Argentina $52k $73k $80k
Australia $46k $53k $60k
Japan $43k $55k $72k
China $46k $75k $61k
Russia $24k $48k $56k
South Africa $43k $28k $54k
Its ironic, and a bit insulting, to see how these US and European drug companies repay the countries that fostered and assisted in their now-thriving corporations. In the United States, Big Pharma corporations are charging their fellow Americans as much as three or four times the prices they charge the Communist Chinese or Russia for the exact same drugs. Why? That’s a good question.
Read the entire Report at Price of Drugs for Chronic Myeloid Leukemia