Why U.S. drugs are so pricey

Cheaper copy­cat drugs now al­lowed in Europe re­main un­avail­able here

Baltimore Sun Sunday - - FRONT PAGE -

Eu­ro­peans have found the se­cret to mak­ing some of the world’s costli­est medicines much more af­ford­able, as much as 80 per­cent cheaper than in the U.S.

Gov­ern­ments in Europe have com­pelled drug­mak­ers to bend on prices and have thrown open the mar­ket for so-called biosim­i­lars, which are cheaper copies of bi­o­logic drugs made from liv­ing or­gan­isms. The brand­name prod­ucts — rang­ing from Hu­mira for rheuma­toid arthri­tis to Avastin for can­cer — are high­priced drugs that ac­count for 40 per­cent of U.S. phar­ma­ceu­ti­cal sales.

Euro­pean pa­tients can choose from dozens of biosim­i­lars, 50 in all, which have stoked com­pe­ti­tion and driven prices lower. Europe ap­proved the growth hor­mone Om­ni­trope as its first biosim­i­lar in 2006, but the U.S. didn’t fol­low suit un­til 2015 with can­cer-treat­ment drug Zarxio.

Now, the U.S. gov­ern­ment stops short of ne­go­ti­at­ing and drug­mak­ers with brand-name bi­o­log­ics have used a va­ri­ety of strate­gies — from spe­cial con­tract­ing deals to over­lap­ping patents known as “patent thick­ets” — to block copy­cat ver­sions of their drugs from en­ter­ing the U.S. or gain­ing mar­ket share. As a re­sult, only six biosim­i­lars are avail­able for U.S. con­sumers.

Euro­pean coun­tries don’t gen­er­ally al­low price in­creases after a drug launches and, in some cases, the national health au­thor­ity re­quires pa­tients to switch to less ex­pen­sive biosim­i­lars once the copy­cat prod­uct is proved safe and ef­fec­tive, said Michael Klein­rock, re­search di­rec­tor for IQVIA In­sti­tute for Hu­man Data Sci­ence.

If Susie Christoff, a 59-year-old who suf­fers from de­bil­i­tat­ing pso­ri­atic arthri­tis, lived in Italy, the cost of her pre­ferred medicine would be less than a quar­ter of what it is in the U.S., ac­cord­ing to data gath­ered by Glob­alData, a re­search firm. Christoff tried a se­ries of ex­pen­sive bi­o­log­ics be­fore dis­cov­er­ing a once-amonth in­jec­tion of Cosen­tyx, man­u­fac­tured by Swiss drug­maker No­var­tis, worked the best.

With­out the medicine, Christoff said, her fin­gers can swell to the size of sausages. “It’s 24/7 con­stant pain in, like, the an­kles and feet,” said Christoff, who lives in Fair­fax, Va. “I can’t sleep, (and) I can’t sit still. I cry. I throw pil­lows. It’s just aw­ful.”

At first, Christoff ’s co­pay for Cosen­tyx was just $50 a month. But when a dis­abil­ity led her to switch to a Medi­care Ad­van­tage plan, her out-of-pocket costs bal­looned to nearly $1,300 a month — more than three times her monthly car loan. Christoff, with the help of her rheuma­tol­o­gist, Dr. An­gus Wor­thing, tried En­brel, Hu­mira and other drugs be­fore find­ing Cosen­tyx, the only drug that pro­vides re­lief.

No­var­tis de­clined to re­spond to ques­tions about Cosen­tyx’s price. In­stead, like other phar­ma­ceu­ti­cal com­pa­nies, No­var­tis says it of­fers pa­tient as­sis­tance pro­grams for those who can’t af­ford the drug. Christoff said she doesn’t qual­ify for fi­nan­cial as­sis­tance.

Like other bi­o­log­ics, Cosen­tyx costs thou­sands of dol­lars per month. The an­nual cost of Christoff ’s treat­ment runs about $65,000 in the U.S. In Italy, where com­pe­ti­tion and price ne­go­ti­a­tions play a big­ger role, it would run about $15,000, ac­cord­ing to Glob­alData. In Eng­land, Dr. Christo­pher Grif­fiths, a lead re­searcher at the National In­sti­tute for Health Re­search who treats pa­tients with Cosen­tyx, said the National Health Ser­vice would pay about 10,000 pounds, or less than $13,000.

And those dras­tic price dif­fer­ences are true even though there is no biosim­i­lar ver­sion of Cosen­tyx yet avail­able in Europe, and might not be for years.

The cost of the drug is tak­ing a toll on Christoff. This past sum­mer, her pro­gres­sive dis­ease made it dif­fi­cult to en­joy the an­nual fam­ily va­ca­tion with her three grown chil­dren and their kids in Vir­ginia Beach, Va. “I can’t get down on the sand to play with my kids with­out help. I can’t get up with­out help,” Christoff re­called. “I’m not ready to stop try­ing. But I’m also not ready to go through my en­tire re­tire­ment fund to walk.”

Un­like Cosen­tyx, ri­val drugs — Hu­mira, En­brel and Rem­i­cade — all face biosim­i­lar com­pe­ti­tion in Europe. Only Rem­i­cade has com­pe­ti­tion from a lower-cost biosim­i­lar in the U.S., and Hu­mira isn’t ex­pected to have a copy­cat com­peti­tor in the U.S. mar­ket un­til 2023. Hu­mira, made by Ab­bVie, is the world’s top-sell­ing drug.

In late Oc­to­ber, Wall Street an­a­lyst Ronny Gal at San­ford C. Bern­stein & Co. noted that Ab­bVie agreed to drop Hu­mira’s price by 80 per­cent in one Nordic coun­try to com­bat biosim­i­lar com­pe­ti­tion.

Con­cerned about how much bi­o­log­ics cost the U.S. health sys­tem and pa­tients, Food and Drug Ad­min­is­tra­tion Com­mis­sioner Scott Got­tlieb an­nounced an “ac­tion plan” last sum­mer that in­cluded tap­ping the Fed­eral Trade Com­mis­sion for help, say­ing he was “wor­ried” about the biosim­i­lar mar­ket.

“The branded drug in­dus­try didn’t build its suc­cess by be­ing busi­ness naive; they are smart com­peti­tors,” Got­tlieb told an au­di­ence full of ad­vo­cates, in­dus­try in­sid­ers and re­searchers at the Washington, D.C.-based Brook­ings In­sti­tu­tion in July. “But that doesn’t mean we need to em­brace all of these busi­ness tac­tics or agree with them and think they are ap­pro­pri­ate.”

One of these busi­ness tac­tics in­volves so-called re­bate traps, in which fi­nan­cial deals are cut to make sure pa­tients can get only a bi­o­logic, not a biosim­i­lar. In­ter­na­tional drug­maker Pfizer al­leged in a Septem­ber 2017 law­suit that ex­clu­sion­ary con­tracts cre­ated by John­son & John­son pre­vented use of its biosim­i­lar by health in­sur­ers, hos­pi­tals and clin­ics.

John­son & John­son’s wildly suc­cess­ful bi­o­logic Rem­i­cade, the brand-name ver­sion of in­flix­imab, pro­duced $6.3 bil­lion in world­wide sales in 2017. Pfizer launched its copy­cat drug, In­flec­tra, in the U.S. in Oc­to­ber 2016, not­ing in the an­nounce­ment that it would price the drug at a 15 per­cent dis­count to Rem­i­cade’s whole­sale price.

Still, health sys­tems such as Geisinger Health, based in Penn­syl­va­nia, say they have had dif­fi­culty switch­ing to the less ex­pen­sive al­ter­na­tive. “J&J has done a re­ally good job of en­trench­ing them­selves in the mar­ket,” said Ja­son Howay, man­ager of for­mu­lary ser­vices at Geisinger.

The health sys­tem ul­ti­mately de­cided it wanted to switch all adults to Pfizer’s biosim­i­lar, say­ing it pro­vided the same qual­ity of treat­ment.

But John­son & John­son had “bun­dled” the prices of other drugs with Rem­i­cade. So if Geisinger stopped us­ing Rem­i­cade on adult pa­tients, J&J could stop pro­vid­ing dis­counts on other drugs, such as those used for car­di­ol­ogy, Howay ex­plained. “It weaves a very tan­gled web.”

A spokes­woman for Janssen, John­son & John­son’s main phar­ma­ceu­ti­cal sub­sidiary, says the drug­maker does of­fer “more at­trac­tive con­tract terms” to buy­ers who use a wider range of J&J medicines. “Our con­tract­ing ap­proach has al­ways pri­or­i­tized ac­cess for pa­tients and their providers,” Mered­ith Sharp says.

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