Within the U.S., the worth of Revlimid, a brand-name most cancers drug, has been rising for twenty years. It now sells for almost $1,000 a tablet. In Europe, the worth has been constantly decrease — in some international locations by two-thirds.
I began reporting on Revlimid after I used to be prescribed the drug following a prognosis of a number of myeloma, an incurable blood most cancers. Shocked by the excessive worth, I discovered that the drugmaker, Celgene, had used Revlimid as its personal private piggy financial institution for greater than a decade, elevating the worth within the U.S. at any time when it noticed match.
Even with decrease costs in Europe, Celgene nonetheless made a revenue there, a former government informed Congress. That added to the greater than $21 billion in internet earnings the corporate made after Revlimid was launched in 2005.
In fact, Revlimid isn’t the one drug with a worth disparity. People pay extra usually for prescribed drugs than individuals in different rich international locations. And prices preserve going up, saddling sufferers with crippling debt or forcing them to decide on between filling prescriptions or shopping for groceries. So why can we pay a lot extra? And is something being finished about it?
In most different rich international locations, governments set a single worth for a drug that’s often primarily based on evaluation of the therapeutic good thing about the drugs and what different international locations pay. Within the U.S., drug firms decide what to cost for his or her merchandise with few restraints. Insurance coverage firms can refuse to cowl a drug to attempt to negotiate a lower cost, however for some ailments like most cancers, that poses a danger of public backlash. Most cancers is a “very politically charged illness,” stated Dr. Aaron Kesselheim, a Harvard Medical Faculty professor who research drug pricing and regulation. Some states additionally mandate that insurers cowl sure most cancers medication.
Pharmaceutical firms have constantly argued that American drug costs mirror the price of analysis and growth. People might pay extra, however in addition they profit from having first-line entry to cutting-edge remedies. (Celgene has since been acquired by Bristol Myers Squibb, which says its worth for Revlimid, which it elevated within the U.S. final yr by 7%, “displays the continued medical profit Revlimid brings to sufferers, together with different financial elements.”)
Dr. Hagop Kantarjian, a leukemia specialist at MD Anderson Most cancers Heart who research drug pricing, stated that pharmaceutical firms usually overstate the price of creating medication and that many drug discoveries originate in hospital and educational labs funded by means of authorities grants. Funding from the U.S. Nationwide Institutes of Well being contributed to all however two of the 356 medication permitted by the Meals and Drug Administration from 2010 to 2019, in accordance with a Bentley College examine. Firms additionally don’t spend all their earnings on innovation: The 14 largest drug firms on the planet spent extra on inventory buybacks and dividend funds to traders than on analysis and growth, in accordance with a 2021 evaluation by the U.S. Home Oversight Committee.
One doable resolution to deliver down prices: tie American costs to what drugmakers cost in different rich international locations. The Congressional Price range Workplace discovered final yr that this might have the most important affect on decreasing prices of seven proposals it studied. It’s an concept with bipartisan assist.
Sens. Josh Hawley, R-Mo., and Peter Welch, D-Vt., launched a invoice this week that may penalize pharmaceutical firms that promote their medication at larger costs than the typical of the costs in Canada, France, Germany, Japan, Italy and the UK. Firms that promote above the typical would face civil penalties equal to 10 instances the distinction between the U.S. record worth and the typical worth in these different international locations.
President Donald Trump has advocated for related actions. Throughout his first time period, he issued an government order directing the Medicare program to make use of a “most favored nation” method in paying for medication. The administration later developed a rule directing Medicare to pick out the bottom worth from a basket of comparable international locations and make that the utmost quantity the company would pay for 50 medication administered by docs. A courtroom blocked the rule from being carried out within the final days of the primary administration.
Now, in accordance with studies this week, the administration is pushing plans to tie Medicaid and Medicare costs to decrease costs charged in different international locations.
Linking U.S. costs to these in different international locations is opposed by trade teams who say it could go away selections on drugs to the federal government moderately than docs and sufferers.
“Authorities worth setting in any type is dangerous for American sufferers,” stated Alex Schriver, a spokesperson for the Pharmaceutical Analysis and Producers of America, an trade group. He stated efforts needs to be targeted on fixing “the issues within the U.S. system,” together with cash that flows to intermediaries reminiscent of pharmacy profit managers.
Some critics additionally warn so-called worldwide reference pricing will be gamed and permits overseas governments to primarily set the worth of medicines bought within the U.S.
The Trump administration is anticipated to announce drug pricing plans as early as subsequent week, in accordance with a report. The White Home didn’t reply to a request for remark.
