The Soaring Cost of a Simple Breath

I am amazed at how the prices for medication can differ between different countries and how different countries purchase medications and set affordable rates for their citizens. It seems to me that buying in bulk and getting the manufacturers to set affordable prices is the way to go. The other area that baffles me is why we have to see a doctor for a prescription that we’ve had forever. Repatenting is another scam that needs to be stopped. And marketing to the public … its like they think I know more than my doctor. My doctor is another quality control person who gathers feedback from their patients on the medications they have prescribed. These are all things that driven up our health care costs… from everyone taking a piece of the pie and a lack of roles and responsibilities. I agree, some creative policies are desperately needed in order to get our skyrocketing medication costs down, even in Canada. Recommend reading the entire article. Click here to learn more or an excerpt below.

 

The arsenal of medicines in the Hayeses’ kitchen helps explain why. Pulmicort, a steroid inhaler, generally retails for over $175 in the United States, while pharmacists in Britain buy the identical product for about $20 and dispense it free of charge to asthma patients. Albuterol, one of the oldest asthma medicines, typically costs $50 to $100 per inhaler in the United States, but it was less than $15 a decade ago, before it was repatented.

“The one that really blew my mind was the nasal spray,” said Robin Levi, Hannah and Abby’s mother, referring to her $80 co-payment for Rhinocort Aqua, a prescription drug that was selling for more than $250 a month in Oakland pharmacies last year but costs under $7 in Europe, where it is available over the counter.

Qvar inhalers

USA – 2

Greece – 37

Advair inhalers

USA – 1

France – 7

Rhinocort bottles

USA – 2

Romania – 51

Augmentin pills

USA – 19

Belgium – 445

Colcrys pills

USA – 51

Saudia Arabia – 9,158

Unlike other countries, where the government directly or indirectly sets an allowed national wholesale price for each drug, the United States leaves prices to market competition among pharmaceutical companies, including generic drug makers. But competition is often a mirage in today’s health care arena — a surprising number of lifesaving drugs are made by only one manufacturer — and businesses often successfully blunt market forces.

Asthma inhalers, for example, are protected by strings of patents — for pumps, delivery systems and production processes — that are hard to skirt to make generic alternatives, even when the medicines they contain are old, as they almost all are.

The repatenting of older drugs like some birth control pills, insulin and colchicine, the primary treatment for gout, has rendered medicines that once cost pennies many times more expensive.

“The increases are stunning, and it’s very injurious to patients,” said Dr. Robert Morrow, a family practitioner in the Bronx. “Colchicine is a drug you could find in Egyptian mummies.”

Pharmaceutical companies also buttress high prices by choosing to sell a medicine by prescription, rather than over the counter, so that insurers cover a price tag that would be unacceptable to consumers paying full freight. They even pay generic drug makers not to produce cut-rate competitors in acontroversial scheme called pay for delay.

Thanks in part to the $250 million last year spent on lobbying for pharmaceutical and health products — more than even the defense industry — the government allows such practices. Lawmakers in Washington have forbidden Medicare, the largest government purchaser of health care, to negotiate drug prices. Unlike its counterparts in other countries, the United States Patient-Centered Outcomes Research Institute, which evaluates treatments for coverage by federal programs, is not allowed to consider cost comparisons or cost-effectiveness in its recommendations. And importation of prescription medicines from abroad is illegal, even personal purchases from mail-order pharmacies.

“Our regulatory and approval system seems constructed to achieve high-priced outcomes,” said Dr. Peter Bach, the director of the Center for Health Policy and Outcomes at Memorial Sloan-Kettering Cancer Center. “We don’t give any reason for drug makers to charge less.”

And taxpayers and patients bear the consequences.

Asked to explain the high price of inhalers, the two major manufacturers say the calculus is complicated.

“Our pricing is competitive with other asthma treatments currently on the market,” Michele Meixell, the United States spokeswoman for AstraZeneca, which makes Symbicort and other asthma drugs, said in an e-mail. She added that low-income patients without insurance could apply for free drugs from the company.

Juan Carlos Molina, the director of external communication for GlaxoSmithKline, which makes Advair, said in an e-mail that the price of medicines was “closely linked to this country’s model for delivery of care,” which assumes that health insurance will pick up a significant part of the cost. An average co-payment for Advair for commercially insured patients is $30 to $45 a month, he added.

Even with good insurance, the Hayeses expect to spend nearly $1,000 this year on their daughters’ asthma medicines; their insurer spent much more than that. The total would have been more than $4,000 if the insurer had paid retail prices in Oakland, but the final tally is not clear because the insurer contracts with Medco, a prescription benefits company that negotiates with drug makers for undisclosed discounts.

Patent Plays

Dr. Dana Goldman, the director of the Leonard D. Schaeffer Center for Health Policy and Economics at the University of Southern California, said: “Producing these drugs is cheap. And yet we are paying very high prices.” He added that because inhalers were so effective at keeping patients out of hospitals, most national health systems made sure they were free or inexpensive.

But in the United States, even people with insurance coverage struggle. Lisa Solod, 57, a freelance writer in Georgia, uses her inhaler once a day, instead of twice, as usually prescribed, since her insurance does not cover her asthma medicines. John Aravosis, 49, a political blogger in Washington, buys a few Advair inhalers at $45 each during vacations in Paris, since his insurance caps prescription coverage at $1,500 per year. Sharon Bondroff, 68, an antiques dealer in Maine on Medicare, scrounges samples of Advair from local doctors. Ms. Bondroff remembers a time, not so long ago, when inhalers “were really cheap.” The sticker shock for asthma patients began several years back when the federal government announced that it would require manufacturers of spray products to remove chlorofluorocarbon propellants because they harmed the environment. That meant new inhaler designs. And new patents. And skyrocketing prices.

“That decision bumped out the generics,” said Dr. Peter Norman, a pharmaceutical consultant based in Britain who specializes in respiratory drugs. “Suddenly sales of the branded products went right back up, and since then it has not been a very competitive market.”

The chlorofluorocarbon ban even eliminated Primatene Mist inhalers, a cheap over-the-counter spray of epinephrine that had many unpleasant side effects but was at least an effective remedy for those who could not afford prescription treatments.

As drugs age and lose patent protection, the costs of treatment can fall significantly because of generic competition — particularly if a pill has only one active ingredient and is simple to replicate. When Singulair, a pill the Hayes girls take daily to block allergic reactions in the lungs, lost its patent protection last year, generics rapidly entered the market. The price of the drug has already dropped from $180 per month to as low as $15 to $20 with pharmacy coupons.

But sprays, creams, patches, gels and combination medicines are more difficult to copy exactly to make a generic that meets Food and Drug Administration standards. Each time a molecule is put in a new inhaler or combined with another medicine, the amount delivered into the lungs or through the skin may change, even though that often has an imperceptible effect on patients.

“Drug companies can switch devices and use different combinations, and it becomes quite difficult to demonstrate equivalence,” Dr. Norman said, adding that inhaler makers have exploited such barriers to increase sales of medicines long after the scientific novelty has passed.

Obstacles for Generics

A result is that there are no generic asthma inhalers available in the United States. But they are available in Europe, where health regulators have been more flexible about mixing drugs and devices and where courts have been quicker to overturn drug patent protection.

“The high prices in the U.S. are because the F.D.A. has set the bar so high that there is no clear pathway for generics,” said Lisa Urquhart of EvaluatePharma, a consulting firm based in London that provides drug and biotech analysis.“I’m sure the brands are thrilled.”

The F.D.A. acknowledges that the lack of inhaled generic medicines, as well as topical creams, has been costly for patients, but it attributes that to “difficult, longstanding scientific challenges,” since measuring drug activity deep into the lung is complicated, said Sandy Walsh, a spokeswoman for the agency. Dr. Robert Lionberger, the agency’s acting deputy director in the office of generic drugs, said that research into the development of generic inhaled medicines was the agency’s highest priority but that the effort had been stalled because of budget cuts imposed by Congress.

Even so, experts say, a significant problem is that none of the agencies that determine whether medicines come to market in the United States are required to consider patient access, affordability or need.

The Food and Drug Administration has handed out patents to reward drug makers for conducting formal safety and efficacy studies on old drugs that had not been so scrutinized. That transformed cheap mainstays of treatment like colchicine for gout and intravenous hydroxyprogesterone for preterm labor into high-priced branded products, costing $5 a pill and $1,500 per dose.

For its part, the United States patent office grants new protections for tweaks to drugs without weighing the financial impact on patients.

For example, with the patent for the older oral contraceptive Loestrin 24Fe about to expire, the company Warner Chilcott stopped making the pill this year and introduced a chewable version — with a new patent and an expensive promotional campaign urging patients and doctors to switch. While many insurance plans covered the popular older drug with little or no co-payment, they often exclude the new pills, leaving patients covering the full monthly cost of about $100. Patients complained that the new pills tasted awful and were confused about whether they could just be swallowed.

“Drug patents are easy to get, and the patent office is deluged,” said Dr. Aaron Kesselheim, a pharmaceutical policy expert at Harvard Medical School. “The F.D.A.approves based on safety and efficacy. It doesn’t see its role as policing this process.”

Research vs. Marketing

There are good reasons drug companies are feeling threatened. In the last several years, some best-selling medicines, like Lipitor for high cholesterol and Plavix for blood thinning, have been largely replaced by cheap generics in a very competitive market. In 2012, that led to $29 billion in savings for patients, said Mr. Aitken of IMS, or $29 billion in lost revenues for drug makers. Eighty-four percent of prescriptions dispensed last year were for generic medications.

While drug companies generally remain highly profitable, recent trends have meant tough times for some companies, including Merck, whose profits crashed 50 percent this year primarily because the patent expired on its best-selling asthma pill, Singulair.

So AstraZeneca has recently spent millions of dollars in court pursuing several small drug companies for patent infringement after they announced a plan to make a true cheap generic version of Pulmicort Respules. Though a New Jersey judge sided with the generic manufacturers this spring, legal appeals by AstraZeneca will keep the generics off the market for the near future.

As insurance policies require patients to contribute more out of pocket for medicines, public pressure to curb prices has grown. This year, more than 100 top cancer specialists protested the rising prices of cancer treatments.

Drug companies have long argued that pharmaceutical pricing reflects the cost of developing and testing innovative new drugs, many of which do not pan out or make it to market.

“When there’s a really innovative product, you might be able to justify the price,” Dr. Kesselheim said. “But this is not generally the case.”

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 United States, one of the few Western countries that allows advertising of prescription drugs to consumers, GlaxoSmithKline spent $99 million in advertising for Advair in 2012. Despite its financial woes, Merck spent $46.3 million to advertise its steroid spray, Nasonex, according to fiercepharma.com, a Web site that tracks the industry’s advertising.

Also, the focus of much pharmaceutical research in recent years has shifted from simple drugs for common diseases that would have widespread use to complicated molecules that would most likely benefit fewer patients but carry far higher price tags, in the realm of tens of thousands of dollars.

The newest offering for asthma is Novartis’s Xolair, which is given by injection in a doctor’s office every two weeks at a cost of up to $1,500, depending on the dose. Because the drug is so expensive and was deemed to have little or no benefit over inhalers for a vast majority of patients, the British government last year announced that it would not make it available through the National Health Service. It relented this year, agreeing to stock it for limited use, after the manufacturer offered a confidential discount.

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.

With such jockeying determining supply, products can simply disappear and prices for vital medicines can fluctuate far more than they do for a carton of milk. After the price of Abby Hayes’s Rhinocort Aqua nasal spray rose abruptly, it was unavailable for many months. That sent her family scrambling to find other prescription sprays, each with a price tag over $150.

This year the price of Advair dropped 10 percent in France, but in pharmacies in the Bronx, it has doubled in the last two years.

Twenty years ago, drugs that could safely be sold directly to patients typically moved off the prescription model as their patent life ended. That brought valuable medicines like nondrowsy antihistamines and acid reducers to drugstore shelves. But with profitable prescription products now selling for $100 per tiny bottle, there is little incentive to make the switch, since over-the-counter drugs rarely succeed if they cost more than $20.

As a result, a number of products that are sold directly to patients in other countries remain available only by prescription in the United States. That includes a version of the popular but expensive steroid nasal spray used by Abby Hayes, which is available over the counter in London for under $15 at the Boots pharmacy chain.

“Not only is the cost cheaper, but it doesn’t require a doctor’s visit to get it,” said Dr. Jan Lotvall, a professor of allergy and immunology at the University of Gothenburg in Sweden, where steroid nasal sprays are also available over the counter.

 

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