It's not just Turing Pharmaceuticals, maker of the
now-infamous Daraprim, the drug whose price jumped by 5,000 percent
overnight, that appears to be exploiting patients. Other drug companies
are vastly overcharging Americans with cancer for a group of drugs known
as tyrosine kinase inhibitors, or TKIs, an academic study has found.
Sometimes, the price of those drugs is up to 600 times more than the
cost of production, Reuters reported this week.
In the U.S., a patient can expect to pay $75,000 to $100,000 per
year, twice as much as a European counterpart, for these drugs, which
have fewer side effects than chemotherapy. Yet the World Health
Organization has determined that TKIs can be produced at a low cost,
adding one such drug to its list of essential medicines earlier this
year.
The findings of the study, carried out by Andrew Hill, a
pharmacologist at the University of Liverpool in Britain, come amid a
raging debate over the price of drugs in general, not just cancer
treatments, in the United States. Sovaldi, for example, a hepatitis C
drug that when taken daily for 12 weeks cures 90 percent of patients,
costs $1,000 a pill. Many other drugs treating a variety of illnesses or
infections in the U.S. can cost hundreds of thousands of dollars per
year per patient. Daraprim, which treats the parasitic infection
toxoplasmosis, joined that category when, this week, Turing ran up the
price from $13.50 a tablet to $750.
Hill, who analyzed TKI production costs and pricing, found that if it
produced on a large scale, TKIs could cost anywhere from $159 to $4,022
per person every year, especially as patents on some TKIs expire and
generic versions can be made, Reuters reported.
"There is a lot of scope for prices to come down," Hill said. "There
has to be some middle ground between the prices that companies are
charging, which may not even be cost-effective by the standards set by
some healthcare authorities, and the actual production cost."
Pharmaceutical companies have long maintained that drugs are priced
so high because those profits fund critical research and
development, allowing drug companies to create better medicines, and
more of them. But critics argue that pharmaceutical companies make
excessive profits and that the high cost of drugs cannot be explained or
justified simply by R&D needs.
In 2013, average profit margins for the pharmaceutical industry
rivaled those of the banking industry, beating the auto industry and
even oil and gas companies. That year, Pfizer, the world's largest
pharmaceutical company by revenue, had a 42 percent profit margin, the
BBC reported.
Hill's calculations showed that if the TKI Gleevec, which treats
leukemia and is made by Swiss-based Novartis, were to have a 50 percent
profit margin, it would cost $159 for a year of treatment. In the U.S.,
it costs $106,000.
A spokeswoman for Novartis told Reuters the cost of production was
not the only factor determining the price of a drug. "We invest in
developing novel and current treatments to find ways to make more
cancers survivable," she said. "This is challenging and risky and needs
to be taken into consideration when discussing pricing of treatments,"
she added.
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