New oral MS drug to cost $50,000 ( canadian ) per year

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New oral MS drug to cost $50,000 ( canadian ) per year

Postby garyak » Sat Oct 09, 2010 8:26 am

Please justify this cost to the patient - especially disabled people who don't work.

http://www.reuters.com/article/idUSLDE6971P220101008
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Postby auburntiger » Sat Oct 09, 2010 9:30 am

Thanks for sharing Gary! Can't believe they are commanding this kind of retail price for a medication that is not even bio-engineered. The thought process has to be that they feel people will migrate because they want to be off the shots.
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Postby David1949 » Sun Oct 10, 2010 9:04 am

I've been tempted to start a discussion of free market economics for quite a while here. But I hesitate to do so because it will likely piss off quite a few people. Oh well -here goes.

The first PC I bought, 18 years ago, cost $2000. The second one, purchased about 5 years later cost $700. The one I have now was purchased about 6 years ago. It cost $500. Each new computer was faster and had more RAM and a bigger hard drive than it's predecessor. Each one was far better and cheaper than the one before. A similar occurrence is happening with wide screen TV's, although not quite as dramatic. Even with cars the prices are not rising very fast anymore. The Jeep Patriot I bought this year was priced about the same as the Jeep Cherokee I bought in 2001. The point is that with many goods prices are declining or at least holding steady, but this is not the case with medical costs.

Fifteen years ago, the cost of one of the earliest MS drugs was about $12,000 per year. But now it's nearly double that. The drug companies will claim that the cost is high because they have to recover their development costs. OK but that particular drug has been around for at least 20 years. Surely the development costs have long since been paid for. So why is the price still so high?

Why are medical costs going up like a rocket while the price of many manufactured good is declining? I think the answer is that the manufactured good are sold in a competitive free market. People shop for the best values when they are looking for a new PC or a new TV or a car. Manufacturers know that their products must be competitively priced if they want to sell them. So if they want to stay in business they must look for ways to keep their prices down. But this doesn't happen in the medical business. You go to your doctor with whatever problem you have. He writes a prescription for you. On the way out, the clerk says ok your copay for today's vists is $5 and your insurance picked up the rest. When you get your Rx filled the pharmacist says ok you have a $5 dollar copay and the insurance paid the rest. So your total cost for the doctor and prescription is $10 bucks. That's not so bad. But the actual cost to the insurance company is far higher, maybe $100 for the doctor visit and another $100 for the Rx. If you're taking one of the CRAB drugs the RX cost will be far higher, maybe $2000 per month. But the insurance companies just pass those costs on to their customers. That means higher health care insurance costs for everyone.

The CRAB drugs cost about $20,000 to $40,000. Would anyone be willing to pay that out of pocket? I think not. The drug companies would have to dramatically reduce their prices, if they wanted to keep selling that stuff. And no one would buy this new pill at a cost of nearly $50,000 per year. That's about equal to the average gross income in the US. The manufacturer would have to reduce the price tenfold, at least.

We need to get competitive forces back into the medical business . In the case of this new drug we don't need to make them justify the high price. We just need to tell them to shove it until their price comes down.
Last edited by David1949 on Sun Oct 10, 2010 9:17 am, edited 1 time in total.
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Postby ozarkcanoer » Sun Oct 10, 2010 9:16 am

David, free market economics is fine for computers. But I know many people with MS who do not take any of the MS drugs because of the cost. I was thinking of asking my neuro about going on Gilenya but now that the cost has been announced I have second thoughts. I never felt better on my expensive Copaxone. I have had the Liberation procedure and it cost me out of pocket, but it was less than my insurance company pays for my Copaxone. Invent a better computer and they will come. And because of the procedure things are finally looking up for me.

Oh, BTW, it isn't much of a free market if your neurologist tells you that these drugs are the only treatment for this terrible disease. I could do without my computer but I can't do without my brain.

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Postby David1949 » Sun Oct 10, 2010 9:44 am

ozarkcanoer wrote:Oh, BTW, it isn't much of a free market if your neurologist tells you that these drugs are the only treatment for this terrible disease. I could do without my computer but I can't do without my brain.

ozarkcanoer


That's exactly my point. There is no free market in healthcare.

Imagine how PC prices would look if we bought them in the same way we buy medical care. You would go to a PC specialist and tell him what you want to do with your PC. He would then decide which PC you need and give you an RX for it. He would not tell you about other PCs or price comparisons. You would take the RX to a PC store. They would give you the PC and charge you the copay. Your PC insurance would pick up the rest. You might not even know what the actual cost was. But you would soon discover that your PC insurance costs were going through the ceiling, because your PC specialist picked out a high price PC for you. And the store that sold it to you charged top dollar.

Let me give you an example of one area of health care that still operates as a mostly free market; vision correction surgery. Medicare and most insurance companies consider that an elective procedure so they won't pay for it. You have to pay out of pocket. When that procedure first became available about 25 years ago it cost about $3000 per eye. But now it is frequently advertised for $1000 per eye. Why did the cost drop? Well since people are paying out of pocket they shop for the best prices. That puts competive pressure on the providers. They must have reasonable prices if they want to do business.

Take a look at the price for Liberation treatment within the USA. The low price doctor charges $5000 ( just raised to $6000). The high price doctor charges $40,000. Why the difference? Well if your insurance pays for it you don't care what it costs because it isn't coming out of your pocket. But if we pay out of pocket then the doc who charges $40,000 won't get any customers. He will either have to drop his price or get a job selling hot dogs.
Last edited by David1949 on Sun Oct 10, 2010 9:49 am, edited 1 time in total.
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Postby Jugular » Sun Oct 10, 2010 9:49 am

They say that the cost to bring a drug to market is $100 to $200 million and so the incentive is the period of exclusivity given to a drug company where they get to stick it in the ear of the consumer until their patent expires.

The cost of these drugs is part of the larger debate on drug patenting and generics. I think Obama recently signed a bill to effectively reduce drug patent terms from 20 to 12 years. The MS drugs will be coming off patent at some point in the near future and so they are busy filing patents for tweaks and improved formulations. An example may be Copaxone in oral form or the new and improved Rebiff that's coming out. This process is known as "evergreening" a patent.

Drug companies and generic manufacturers are in a constant state of patent litigation.

Apart from that drug companies charge what the market will bear. With there being few approved treatments available for MS, these companies have had a pretty good run. This is why it is important to get Liberation treatment recognized as an approved treatment for MS. While it isn't a direct competitor, if patients achieve good results with it they will be less likely to keep on with expensive drugs of limited benefit. But they might, if the price is right. Therefore If Liberation is approved then it should exert downward pressure on the costs of these drugs.

You'd be a fool to think that these drug companies won't do what they can to make sure CCSVI gets deep-sixed. But before going off on a paranoid rant against big pharma, there are remyelination drugs in the pipeline that might prove to be pretty beneficial. Also if CCSVI treatment becomes accepted there may be drugs to help keep veins open longer and so forth.

Also you can't dismiss the economic incentives associated with liberation treatment. If one clinic can modestly treat 5 patients a day, 200 days in a year, at $6,000 a treatment, that translates into revenue of $6,000,000 a year. And that doesn't include imaging MRV and ultrasound. So there are economic forces in play in favor of this proposition.
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Postby David1949 » Sun Oct 10, 2010 10:07 am

Jugular wrote:They say that the cost to bring a drug to market is $100 to $200 million and so the incentive is the period of exclusivity given to a drug company where they get to stick it in the ear of the consumer until their patent expires.


That's an excellent point, and that's certainly another problem that needs to be solved. Why are the development costs so high? Yes we all want safe and effective drugs but if you made them so safe that no one can afford them then maybe you made them too safe. Even with all the precautions some drugs get removed from the market because of problems that showed up later. So they still aren't completely safe, but they are extremely expensive.

Consider the hoops they want to put Liberation through before it becomes an accepted practice. First they want another study to see if there is a correlation between CCSVI and MS even though both the Zamboni study and the Buffalo study show a strong correlation. Then there would be small scale clinical trials and then a large scale trial. By the time all of that is done many years would elapse and millions of dollars would be spent. But most of us understand the risks and are willing and eager to get Liberated now. So maybe the approval process is just too cumbersome. Let's get it streamlined.
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Postby Cece » Sun Oct 10, 2010 10:36 am

I have thought that it's wrong for pharma to be treated as if it's intellectual property (due to their investment and discovery that went into the creation of it) when it's not like a book that you can read or not read; it's not a non-essential; it's drugs that prolong or better your life. The system is set the way it is, with patents expiring and generics introducing that free market competition. But the pharmaceutical companies are rich and they do ridiculously well in good times and in bad, so I personally think the system needs to be adjusted. It's too much power and money going to these companies, of course they will abuse the power, that's what power does.
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Postby David1949 » Sun Oct 10, 2010 11:55 am

I also have to note that our fellow MSers north of the border aren't very happy with the Canadian Health Care system right now. Canadian health care won't pay for Liberation and worse yet they won't even let Canadians pay for it themselves. They have to leave the country to get it. There are qualified doctors in Canada who could do the procedure but they are prohibited from doing it.
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Postby auburntiger » Sun Oct 10, 2010 12:03 pm

Jugular mentioned that the current MS drugs will be coming off patent in the near future. This is correct. However, the cost to setup/manufacture a generic bio-engineered drug to mirror those out there is not as simple as that seen with other medications so may not translate into as large a discount as we see with other generic medications.
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