Doctors Call Out Novartis For Insane Pricing On Cancer Drug

from the as-they-should dept

Fri, May 3rd 2013 5:37pm — Mike Masnick

Novartis has been in the news lately for the lawsuit filed against it by the US government for kickbacks it allegedly gave to doctors for prescribing certain drugs. As we noted about that case, it should be no surprise that this sort of activity happens, given that the incentive structure we've created with patents is so extreme. Here's one example of at least some principled doctors striking back against Novatis. Over 120 cancer researchers and doctors have published a paper calling out Novartis specifically for its pricing on the cancer drug Gleevec (marketed as Glivec outside the US). The doctors point out that it can cost over $100,000 per year for Gleevec currently. And, Novartis has been continually jacking up the price. There had been concern when the drug was first introduced a decade ago, that it was priced way too high at $30,000, leading the company's then CEO, Daniel Vasella, to acknowledge the complaints, but to argue that it was "a fair price." Well, now the company is pricing the drug at more than three times what it thought was a fair price, and it should be no surprise that people think this is outrageous profiteering by abusing a government granted monopoly to charge way more than any fair market price would allow.

The paper these doctors published points out that such high prices undoubtedly causes harm to patients who need the drug. The lead author of the paper told CNN that this whole situation is unsustainable, and something needs to be done to bring prices down to a more reasonable, market-based level. He just focused on Gleevec because it's his area of research:

"These price increases do not reflect the cost of development of drugs or the benefit they provide to the patient," he told CNNMoney. "They are simply related to the drug companies' wish to increase profits beyond a reasonable range."

Of course, one key way to help drive down prices is to do the obvious: stop granting government-given monopolies on the production of such drugs. That, alone, is the reason why the prices are so crazy in most cases. Thankfully at least some countries have recognized how ridiculous this is. India recently blocked Novartis from trying to patent a slightly different version of Gleevec, which means that the company will finally face some real pricing pressure from generics in that country. One would hope that other countries would do the same, and recognize that competition isn't a bad thing. It might just save lives.

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Filed Under: gleevec, kickbacks, pharmaceuticals
Companies: novartis

39 Comments

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out_of_the_blue, 3 May 2013 @ 5:42pm

If I was not an atheist I'd say there is a special place in hell for those mother fuckers.
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Anonymous Coward, 3 May 2013 @ 6:12pm

Re:
You don't have to have religion to appreciate classical literature. I'd say 10th circle of hell in Dante's Comedy with Sinon from Virgil's Aenid. Fittingly, I picked the circle of disease.
First they lie about the costs of production. They then knowingly deceive the people, that as physicians, they are sworn to protect. Sounds to me about the same as the classic example of treachery.
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PRMan, 3 May 2013 @ 6:29pm

Re:
If you weren't an atheist, you might have compassion on your fellow man too...
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horse with no name, 3 May 2013 @ 6:36pm

Liability Issues
I think a big part of the price increase is the potential liability lawsuits that come with providing medication of this type. They are padding their accounts to handle the significant increased risk that exists out there today for large settlements.
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Anonymous Coward, 3 May 2013 @ 7:49pm

Two things not mentioned here are the special deal Pharma got in Obama Care, and the roughly 20% to 25% decline in the US Dollar purchasing power over the last ten years.
Another part of the price gouging is the expectation that when O'care is fully implemented they will start to take a larger hit in the quarterly earnings.
What with regulatory over burden and uncertainty I am not surprised that they are doing this right now.
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Lorpius Prime (profile), 3 May 2013 @ 8:01pm

Re:
10-year inflation of 25% would mean a price change from $30,000 to $37,500.

I don't think that's the issue.
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Anonymous Coward, 3 May 2013 @ 8:28pm

The Doctor says don't be a dick to Novartis.
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Digdug (profile), 3 May 2013 @ 9:56pm

Re: Re:
What you're not understanding is how the pharmas compute inflation, which clearly involves a few extra zeroes in there somewhere. It's an understandable mistake. /s
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Liz (profile), 3 May 2013 @ 10:28pm

Re: Re:
PRMan, you sir, are an ass.
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Alan Peery, 3 May 2013 @ 10:36pm

@PRMan Try again, with thought
When @out_of_the_blue mentions a "special place in hell" for someone, who do you think he was talking about? I would say he was talking about the Novartis executives that seem to be effectively blocking access to an effective drug, and thus keeping people sick. Do you really think that the exectives deserve compassion? Seems to me that @out_of_the_blue's outrage is directed in exactly the same direction that a compassionate Christian would direct their outrage.

Why does the word "atheist" scare you so much?
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davnel, 3 May 2013 @ 11:25pm

IF the drug companies understood 10% of what the drugs they push actually do (which they don't), and IF they understood how and why they work (which they don't), I might have a little sympathy for them. As it is, they are little different from the snake-oil salesmen of old. The fact that the PTO issues patents to them, on chemicals they have no idea of the long term effects or the mechanisms of operation is totally outrageous and should be stopped immediately, and all issued patents revoked
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Anonymous Coward, 4 May 2013 @ 12:38am

Re: Liability Issues
Which is bullshit of the highest order. Novartis made billions last year. Some of those billions could easily be set aside to cover the cost of a quality legal team.
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dunno, 4 May 2013 @ 2:43am

Re: Re: Liability Issues
I don't think it's cost of lawyers... it's the costs of settlements.
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Anonymous Coward, 4 May 2013 @ 2:58am

perhaps the reason for the drastic price increases are because those getting the kickbacks in return for granting the monopoly over Gleevec, have demanded more and threatened to remove that monopoly if not granted?
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gnudist, 4 May 2013 @ 3:24am

Re: Re:
oh abd christians believing an afterrlife of eterna hellfire is just is "compassionate and caring"? HA!
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Susan, 4 May 2013 @ 6:07am

Re: Liability Issues
It's all about profit. I would think that the risk of liability against a single drug manufacturer would probably be lower if more companies were marketing the same drug. Get rid of these legalized monopolies, and let the American people get life-saving medicines at a reasonable price, just as citizens of other nations are able to do.
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McCrea (profile), 4 May 2013 @ 6:28am

Re: religious perspective
You can still wish them to go to Hell. Whether or not it will affect them is up to their religion.
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staff, 4 May 2013 @ 7:28am

yet another bad idea
'Of course, one key way to help drive down prices is to do the obvious: stop granting government-given monopolies on the production of such drugs.'

That coudl produce undesired results. The reason for patents is without them cos will not invest in R&D becasue if a product is successful in teh mktplace others will copy it. Then there would be no such drugs.

Do you know how to make a Stradivarius violin? Neither does anyone else. Why? There was no protection for creations in his day so he like everyone else protected their creations by keeping them secret. Civilization has lost countless creations and discoveries over the ages for the same reason. Think we should get rid of patents? Think again...or just think.
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Anonymous Coward, 4 May 2013 @ 7:43am

Re: Re:
You realize atheist =/= sociopath, right?
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Mike Masnick (profile), 4 May 2013 @ 8:26am

Re: yet another bad idea
That coudl produce undesired results. The reason for patents is without them cos will not invest in R&D becasue if a product is successful in teh mktplace others will copy it. Then there would be no such drugs.

You do realize that the pharma industry first developed in Germany and Switzerland BECAUSE there were no patents on chemistry in both places? The early R&D centers all moved to those countries because of the lack of patents.

So, uh, no. Wrong again.
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gorehound (profile), 4 May 2013 @ 8:43am

I for one long to see Big Pharma put in their place.
This kind of stuff is outrageous.And so is the ever increasing price of Health.
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JarHead (profile), 4 May 2013 @ 8:44am

Re: yet another bad idea
So, on one hand, no patents leads to locked up and hence lost knowledge that no one has access to. OTOH, patents leads to only the privileged has access to those knowledge. Dunno, no one has access to something seems rather fair/egalitarian to me rather than having a select few chosen by artificial means having access to something while others don't. And I'm saying this while a loved one lay hapless in the ICU.

NO copyright, NO patent, only trademark.
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Anonymous Coward, 4 May 2013 @ 8:45am

Re: yet another bad idea
Quote:
Do you know how to make a Stradivarius violin?Neither does anyone else. Why? There was no protection for creations in his day so he like everyone else protected their creations by keeping them secret.

Actually we can get very close with new materials like carbon fiber that have a good resonance and some new research on the matter.

http://www.instructables.com/id/A-carbon-fibre-violin-i-made-from-scratch/

http://www. telegraph.co.uk/science/science-news/9716271/The-secret-behind-a-Stradivarius-imperfection.html

S till, I dare you to get a violin patent any patent and construct from that an exact copy of any of those "inventions" described there.

You probably won't be able to do it, since after the 80's patents started to get more and more vague about methods and processes. As a resource for knowledge that is a pile of crap today, that is why nobody look at it anymore for inspiration everyone goes to a hacker forum.

Further have you see how many "secrets" companies have?
They don't disclose everything, they don't teach anybody how to do it, they still use secrets a lot, from pressure settings, to ingredients, ratios etc. You wouldn't be able to produce a Strativarus even if you wanted too, because the secret to make it would still be secret, patents don't make everyone magically start teaching others how to do it.

Fucking culture does however, that is why open source culture is more important than the patent system.
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New Mexico Mark, 4 May 2013 @ 8:50am

Re: Re: yet another bad idea
I'm really asking for information here since I don't know a lot about the internals of how patents are filed. Do patents necessarily include all the technical details for a process? In other words, would a "Stradivarius" patent have included all the details of how he made his violins in such a way that it would have been reproducible? If so, I guess some argument could be made for patents as an archive of knowledge. (Then again, I can't help but think of the warehouse at the end of "Indiana Jones and the Temple of Doom".)

Of course, if I wanted to be most truly evil I'd try to lock up both my product and the method I used to create it forever and ever. Oh wait... did I just sum up the driving force behind modern IP law?
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NooberPooF, 4 May 2013 @ 8:57am

RnD
When it comes to RnD it is all done on the publics dime in either Universities, Hospitals or Government research centers of your choice. Once something shows promise on becoming comercial there are two roads. 1) Small startup with small investors that strugle to make it commercial. They invaruably run into financial issue for some odd reason once the base gets established and are "rescued" by a big player. Invariably stripped and gutted they are closed as nonviable. 2) Big pharma steps in because the product is already ready to go commercial and add their "research" to commercialize the product. Pretty much this is just scaling up the manufacturing process while cutting the cost of per unit production.

Either way they do not actually carry the burden of the actual reserch. The rest of us do.

Remember that big pharma is in the business of selling treatments, not cures. Cures cut into their bottom line. As put forth in business journels et al - profit is the only corporate responsibility.
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Anonymous Coward, 4 May 2013 @ 9:14am

Re: yet another bad idea
Instead of thinking you should take a look at any patents filed today.

I dare you construct any invention from those fillings.

Further secrecy lives on, companies don't disclose all that is needed to produce anything, so I pretty much doubt that even with patents you would be able to produce a Strativarus.

On the other hand open research which is done independent of patents already enable us to understand how it was constructed.
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Pixelation, 4 May 2013 @ 9:29am

Creative accounting
I'm not sure what everyone is up in arms about. Novartis has done the prudent thing and hired entertainment industry accountants. The next step they will take is to show how they have been undercharging.
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DNY (profile), 4 May 2013 @ 12:12pm

State Granted Monopolies
Gee, a state-granted monopoly (in this case a patent) is abused because it was granted without the prices allowed to be charged for the product sold under the monopoly are not regulated? What a surprise!

For most things the free market works better than state-granted monopolies. When monopolies are necessary or highly desirable, as in the case of utilities, the rates monopolists are allowed to charge should be regulated in the public interest -- the moreso when the product the monopoly is granted on is one with inelastic demand as is the case with life-saving drugs with no real substitutes.
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Anonymous Coward, 4 May 2013 @ 2:03pm

Re: yet another bad idea
Could would get rid of that "creation" you call a website?
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DCX2, 4 May 2013 @ 3:44pm

Re: Liability Issues
Will you concede that any potential price padding for Glivec should be correlated to the increased risk borne specifically by Glivec? Do you agree that you shouldn't use the inelastic demand for a life-saving cancer drug as a means to extract additional monopoly profits from the market?

If the increased risk of large settlements is an issue, we should see this with other drug manufacturers as well. So get rid of the monopoly patent and let's see what price the market sets for this drug and its associated settlement externalities, shall we?
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JMT (profile), 4 May 2013 @ 5:37pm

Re: yet another bad idea
"The reason for patents is without them cos will not invest in R&D becasue if a product is successful in teh mktplace others will copy it. Then there would be no such drugs."

Heard of proofreading...?

There is ample evidence of drug development working just fine without patent protection. There is also ample evidence of big drug manufacturers using patent protection to limit supply and massively increase prices beyond the cost to develop and manufacture with a reasonable profit, not to mention trying to extend protection beyond when the patent was supposed to end. It's extraordinary that you can defend a system that actively works against the supposed purpose of drugs: saving lives.
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Beta (profile), 5 May 2013 @ 5:51am

Re: Re: Re: yet another bad idea
In principle, yes, a patent should contain all information necessary to reproduce the process, so that anyone could visit the patent office, read the "Stradivarius" patent and then start making Strads.

In practice, patent documents have become lawyer-cant, almost unintelligible to anyone but patent lawyers, practically useless to anyone trying to reproduce the invention, and unrecognizable to the very engineers who invented the thing being patented.

(Also, I doubt that Stradivari himself could have written such instructions, since he was surely not conscious of all the little things he was doing, perhaps not aware of some vital contingencies of his workshop or supply chain, and probably not inclined to perform scientific experiments to see which elements were really needed and which were just tradition. We've been studying his instruments for centuries and we still can't reproduce them.)
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The Groove Tiger (profile), 5 May 2013 @ 11:25am

Re: Re:
omg atheists are the evulz
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Anonymous Coward, 5 May 2013 @ 7:32pm

Re: Re:
the Hippocratic oath has been changed twice. both changes were to increases the profit a doctor can make and decrease the care they are required to provided. I have absolutely no respect for "doctors" they only care about their wallets and care nothing for their patients.
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Ninja (profile), 6 May 2013 @ 4:14am

I'd love to hear from the "go without" crowd. While we appreciate the silence it's pretty simple to deal with this issue: break the patent. If it's abused then it should br invalidated, simple as that.
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TheUglyOne (profile), 6 May 2013 @ 6:58am

Re: Re: Re: Liability Issues
I'm sure not all, but most companies have liability insurance to help cover such lawsuits so even that is generally not an issue.
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John85851 (profile), 6 May 2013 @ 3:50pm

Sell your product on quality, not a forced monopoly
Taking a step back: what's the real reason people buy Stradivarius violins? Because the company has built a reputation of creating quality products. They don't need to patent their violin-making process because their name is already established.
Did you know the formula for Coca-Cola is available on the Internet? Then why not make some yourself? Sure, you can't sell it as Coke because of copyrights and trademarks, but will your friends drink it? Or will they prefer Coke just because of the name?

So why can't Pharma companies use the same approach? They could say, "Sure, you could get a generic drug, but buy ours because of the brand name and reputation of quality that we've built up". Oh, right, they don't have to worry about competing on quality when they have a government enforced monopoly.
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DH's Love Child (profile), 6 May 2013 @ 7:29pm

Re: yet another bad idea
"The reason for patents is without them cos will not invest in R&D..."

You do realize that the R&D for the VAST majority of drugs is actually funded and performed by universities, not the pharma companies?

You also realize that marketing is far and away the largest budget item for big pharma companies?

The knowledge of how to create a Strad is lost because he chose NOT to share it with anybody, not because there weren't patents at the time. The idea that patents would have spread that knowledge is ludicrous.
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Jeff, 16 May 2014 @ 2:19pm

Wow
So they've basically got the governments blessing to get away with this? Such an unfortunate situation :(

Jeff
NC Leukemia Webmaster
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