Cancer Drug Price Rises 1400% With No Generic to Challenge It

[Mockingbird]

Quote

 

Since 2013, the price of a 40-year-old, off-patent cancer drug in the U.S. has risen 1,400%, putting the life-extending medicine out of reach for some patients.

 

Introduced in 1976 to treat brain tumors and Hodgkin lymphoma, lomustine has no generic competition, giving seller NextSource Biotechnology LLC significant pricing power.

 

The U.S. Food and Drug Administration is seeking to encourage more competition for drugs like lomustine, one of at least 319 drugs for which U.S. patents have expired but which have no generic copies, according to a list the agency published earlier this month.

 

The FDA says it will speed up review of any applications to market generic copies of the drugs on its list, as part of a broader effort to encourage lower drug prices.

 

An FDA spokeswoman said the agency has received inquiries from several companies about products on the list, but that it is too soon to gauge overall interest in the products.

 

But as the experience with lomustine shows, attracting generic competition to some older drugs can be hard to pull off.

For many years, lomustine was marketed under the brand name CeeNU by Bristol-Myers Squibb Co., which charged about $50 a capsule for the highest dose, before selling the product in 2013.

Now, the same capsule costs about $768, after nine price increases by a little-known Miami startup, NextSource, which supplies lomustine in a deal with the drug’s new owner, manufacturer CordenPharma.

 

NextSource, which rebranded the drug as Gleostine, most recently raised the price by 12% in November, on the heels of a 20% increase in August, according to analyses drug-price tracker Truven Health Analytics and Elsevier performed for The Wall Street Journal. Prices also have increased significantly for other doses of the drug.

 

Robert DiCrisci, chief executive of NextSource, said in a statement the company bases its pricing on product-development costs, regulatory-agency fees, and the benefit the treatment delivers to patients. The company provides discounts to uninsured patients and those with financial limitations, he said.

 

The price hikes after the change in ownership are similar to what some other companies including Valeant Pharmaceuticals International Inc. and Turing Pharmaceuticals have done in recent years.

 

Normally, rising prices for a product should attract more competition. But Rena Conti, an assistant professor at the University of Chicago who studies health policy, said generic-drug makers have to carefully choose which drugs to make because there can be big entry costs and time commitments associated with obtaining regulatory approval and dedicating manufacturing capacity.

 

“There still may be opportunities for entering other markets that would be more enticing to firms than this market,” she said. Even for medicines that have a generic version, about 40% have only one generic supplier, according to a study she co-wrote this year.

 

Many of the drugs on the FDA’s list are for small patient populations, and companies may decide it isn’t worth the investment to sell generic copies, said Chip Davis, president and CEO of generic-industry trade group Association for Accessible Medicines. He said the FDA’s steps, however, could entice more companies to enter markets for older drugs.

 

[...]

 

Source: https://www.msn.com/en-us/news/us/cancer-drug-price-rises-1400percent-with-no-generic-to-challenge-it/ar-BBHjrTV?li=BBmkt5R&ocid=spartanntp

[+Zagadka Subscriber²]

"Cancer Drug Price Rises 1400% With No Generic to Challenge It" ... I'm pretty sure that is the heading of the company's quarterly earnings report.

[FloatingFatMan]

This sort of crap is why price controls on life sustaining drugs are required,

 

[The Rev]

It's the Epipen all over again...

I'm not saying socialism is the way to go; truth is, like everything else, the real solution lies in the middle...  But people hail how great capitalism is in America, even while paying outrageous prices for ###### that costs pennies to make...  It really baffles my mind sometimes.  

 

[macrosslover]

19 minutes ago, The Rev said:

It's the Epipen all over again...

I'm not saying socialism is the way to go; truth is, like everything else, the real solution lies in the middle...  But people hail how great capitalism is in America, even while paying outrageous prices for ###### that costs pennies to make...  It really baffles my mind sometimes.  

 

You have to understand the people who are paying those outrageous prices aren't hailing the greatness of capitalism.  They have no choice but to buy the medicine, which is why the price is raised.  For those who are never in the position to need the medication they would never feel the pain of trying to get this medicine as they would never need it.  Most of that medication is being paid for through insurance, which is shared by everyone, which empowers a company like this to keep raising the price.

 

The two solutions to solve this particular situation are a price control on the medicine, as they have a monopoly, and could always make a profit or to hope another company makes a cheaper generic to compete with the medication. 

[Clove511]

6 hours ago, macrosslover said:

You have to understand the people who are paying those outrageous prices aren't hailing the greatness of capitalism.  They have no choice but to buy the medicine, which is why the price is raised.  For those who are never in the position to need the medication they would never feel the pain of trying to get this medicine as they would never need it.  Most of that medication is being paid for through insurance, which is shared by everyone, which empowers a company like this to keep raising the price.

 

The two solutions to solve this particular situation are a price control on the medicine, as they have a monopoly, and could always make a profit or to hope another company makes a cheaper generic to compete with the medication. 

You were spot on about insurance until the price control part. If you don't want monopolies, you need to stop the force that creates them...and it isn't capitalism. In fact, capitalism has nothing to do with this story. Capitalism in its true form is inherently anti-monopolistic, because it encourages copycats and generic competition which undermine monopolies, and force monopolies to lower prices to stay relevant (*cough* like all cheap electronic technology with its relaxed regulations *cough*). What people above are complaining about is "Crony-Capitalism" or "Capitalism at Gunpoint", aka "Government-run Capitalism".

There would be no monopoly on any drug if it weren't for the government protecting the company, insurance clouding the price, the FDA keeping new drugs off the market, and intellectual property laws which can make it illegal to reproduce the compound or delivery method. Every single "solution" that people propose the government take is just to repair one or more mistakes the government already made -- you don't untie a knot by throwing another on top of it. The true cost of creating a generic copy of this drug is drowned in the FDA's regulations. Remember the highschoolers* who made the Daraprim solution in their chemistry lab for under $20 who thought they'd solved the Martin Shkrelli crisis? Turns out you need something like $2.87 Billion and 12 years** to get a new drug through the FDA's insane R&D and testing (and bribing) barriers...and that's assuming you beat the 1-in-5,000 or 10,000 odds of getting approved. On top of that, people still get killed by "FDA-approved" meds and treatments all the time, so what's the point of such an impossible barrier of entry***? 

 

The final two lines of the first article highlight the point I'm making:

Quote

In most countries, including Australia, Daraprim is sold for between $1 to $2 per pill. A second US-based company, Imprimis Pharmaceuticals, made an alternative compound to Daraprim — sold for US$1 a dose — but the drug is not FDA-approved. (Emphasis added)

The reason they can sell it so cheaply is because they don't have the same regulation standards as the U.S., so the drug was able to sell internationally immediately and cheaply from day 1. You don't need price controls. You need to eliminate the barriers that keep competition out, and the market will adapt to serve the consumer. It always has, where it is allowed to....it's trying to with the case of Daraprim and the Epipen, but the U.S. FDA won't approve identical copies of those drugs.

To your point about insurance, this is the exact problem with the ACA. These are insurance companies with limited funds, payroll, and other company costs. They aren't bottomless pits that make costs magically disappear. The only reason they exist is to make a gamble: "I'm betting that you'll be healthy. If I'm wrong, I'll pay your expenses. If I'm right, then I profit off of your premiums." and we gamble the opposite: "I'm betting I'm going to get sick, and if I'm right, then you'll pay more for my medical bills than I pay for your premiums. If I'm wrong, then I'm out some money." Insurance being mandatory causes everyone to raise prices. As a result, insurance companies have higher premiums to account for higher costs...otherwise they're losing money and will eventually collapse into bankruptcy... You'd probably assert we should control the price on their premiums as well, but that wouldn't solve the problems either, as it would eliminate insurance companies altogether.

So if we want to fix the problem with medical care, it has to start at the base, with relaxed regulations on the re-creation of drugs, or else prices will respond to intervention....as our current predicament shows.

* http://www.abc.net.au/news/2016-11-30/daraprim-nsw-students-create-drug-martin-shkreli-sold/8078892

** https://www.fool.com/investing/general/2016/04/30/the-cost-of-developing-an-fda-approved-drug-is-tru.aspx

*** https://www.drugwatch.com/featured/misplaced-trust-fda-approval-concerns/