Within the U.S., the worth of Revlimid, a brand-name most cancers drug, has been rising for twenty years. It now sells for practically $1,000 a tablet. In Europe, the worth has been persistently 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. Surprised by the excessive value, 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. each time it noticed match.
Even with decrease costs in Europe, Celgene nonetheless made a revenue there, a former government instructed Congress. That added to the greater than $21 billion in web earnings the corporate made after Revlimid was launched in 2005.
After all, Revlimid isn’t the one drug with a value disparity. Individuals pay extra normally for prescribed drugs than folks in different rich international locations. And prices hold 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 executed about it?
In most different rich international locations, governments set a single value for a drug that’s normally primarily based on evaluation of the therapeutic advantage of 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 cheaper price, however for some illnesses 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 persistently argued that American drug costs mirror the price of analysis and growth. Individuals might pay extra, however additionally they profit from having first-line entry to cutting-edge therapies. (Celgene has since been acquired by Bristol Myers Squibb, which says its value 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 Middle who research drug pricing, stated that pharmaceutical firms typically overstate the price of creating medication and that many drug discoveries originate in hospital and tutorial labs funded via 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, based on a Bentley College examine. Corporations additionally don’t spend all their earnings on innovation: The 14 largest drug firms on the earth spent extra on inventory buybacks and dividend funds to buyers than on analysis and growth, based on a 2021 evaluation by the U.S. Home Oversight Committee.
One doable answer to carry down prices: tie American costs to what drugmakers cost in different rich international locations. The Congressional Price range Workplace found final yr that this might have the largest affect on lowering prices of seven proposals it studied. It’s an concept with bipartisan assist.
Sens. Josh Hawley, R-Mo., and Peter Welch, D-Vt., introduced a bill 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. Corporations that promote above the typical would face civil penalties equal to 10 instances the distinction between the U.S. listing value and the typical value in these different international locations.
President Donald Trump has advocated for comparable 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 value 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, based on reports 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 business teams who say it will go away selections on drugs to the federal government somewhat than docs and sufferers.
“Authorities value setting in any type is unhealthy for American sufferers,” stated Alex Schriver, a spokesperson for the Pharmaceutical Analysis and Producers of America, an business group. He stated efforts must be centered on fixing “the failings within the U.S. system,” together with cash that flows to intermediaries equivalent to pharmacy profit managers.
Some critics additionally warn so-called worldwide reference pricing will be gamed and permits international governments to basically set the worth of medicines offered within the U.S.
The Trump administration is anticipated to announce drug pricing plans as early as subsequent week, based on a report. The White Home didn’t reply to a request for remark.
