Canada Wants To Cut Price Of 'World's Most Expensive Drug'; US Manufacturer Sues To Stop It
from the that's-gratitude? dept
The Turing Pharma case has received widespread coverage, but as Techdirt readers know, it's hardly a unique example of the pharmaceutical industry taking advantage of a flawed system. In fact, over in Canada, there's another interesting example of the industry's sense of entitlement, reported here by CBC News:
A U.S. drug company is taking the Canadian government to court for its attempt to lower the price of what has been called the world's most expensive drug.
According to the article, a 12-month course of Soliris costs about $520,000 in Canada at today's exchange rates, and a mere $500,000 in the US.
Alexion Pharmaceuticals has filed a motion in Federal Court, arguing that Canada's drug price watchdog has no authority to force the company to lower its price for Soliris.While Soliris is not a cure, it can stop the assault [by two rare blood diseases] on the body's tissues and organs. Since patients typically need to take the medication indefinitely, it can cost tens of millions of dollars over a lifetime.
Understandably, some Canadian regions are struggling to provide the drug for all the people who need it:
Due to the high cost, some patients in Canada can't get the drug. Only some provinces will cover the cost of treatment and there are different criteria to qualify for coverage in various jurisdictions.
The pharmaceutical industry likes to argue that, though high, such prices are necessary in order for companies to recoup the research and development costs of new drugs. According to the CBC article, Soliris has already brought Alexion around $4.5 billion in revenues, which ought to be enough to cover any such outlay, not least because of the following important fact:
In case of Soliris, most of the research and development was done by university researchers working in academic laboratories supported by public funds.
That means that Alexion had to spend less than usual to develop and bring the drug to market. It also means that, once more, a pharma company gets to build on the work funded by the public, but without any sense of obligation to pay that back in the form of lower prices -- on the contrary. Perhaps most damagingly, the lawsuit brought by Alexion to defend its exorbitant pricing could have very serious negative consequences for everyone in Canada:
"I think the public science is well over 80 or 90 per cent of the work," said Sachdev Sidhu, a University of Toronto scientist who is also in the business of drug development.A University of Ottawa professor who specializes in health law said he was shocked that Alexion would challenge Canada's authority to regulate drug prices. If Alexion's case is successful, it could end Ottawa's ability to control the cost of patented drugs, Amir Attaran told CBC News.
In the pursuit of high profit margins, the world's dysfunctional drug industry continues to ride roughshod over everything in its path, whether a patient trying to survive a rare chronic disease, or an entire nation trying to provide decent medical treatment to as many of its population as possible.
"This is the single greatest threat to pricing of drugs in Canada ever," he said Thursday.
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Filed Under: canada, drug prices, soliris
Companies: alexion
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Drugs should cost about as much as candy.
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they are stealing public commons
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Problem is the incentive: While students and professors are interested in finding these cures, most of the cost is on mindnumbing repetitive tests for bringing the product to market with little learning value for the students and even less for the professors. You would have to set up a new mechanism for funding the approval requirements. Reducing drug safety standards to reduce that cost would generally not be advisible.
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How dare you molest the sea!
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An offer they can't refuse...
In case of Soliris, most of the research and development was done by university researchers working in academic laboratories supported by public funds.
"I think the public science is well over 80 or 90 per cent of the work," said Sachdev Sidhu, a University of Toronto scientist who is also in the business of drug development.
If for no other reason than the resulting screams would be music to the ears of so many, drug patent life needs to be tied into public funding percentages, and adjusted accordingly.
If a company wants to spend 100% of their money developing a new drug, then they get 100% of the patent duration for it. If 50% of the development costs are paid for by public funds, then the patent duration is reduced by 50%, and so on.
And because you know they would try it, the costs would be calculated by an independent third party, and any evidence of the company attempting to modify the numbers to boost the patent duration past what it should be would result in the patent immediately being put into the public domain, and free for anyone to use to create the drug in question.
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Re: An offer they can't refuse...
They can't afford the drug, so they have no choice but to decline the offer and die in horrific agony.
See? The system works! Yay capitalism! /sarcasm
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Your daily dose of Godwinism
He gave the program light funding, and the Me 262 had limited deployment, but were certainly more effective than the Messerschmitt Bf 109s.
While I cannot speak to the agony of the blood diseases that Solaris inhibits, or the chance of survival, a self-imolation campaign in the lobbies of Alexion Pharmaceuticals by those already doomed might help change their minds.
Or at least secure that no human being will want to work for Alexion Pharmaceuticals.
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Re: An offer they can't refuse...
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Re: An offer they can't refuse...
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Re: An offer they can't refuse...
All this would do is to increase to "bonus" for those 3rd party companies. Sure they wouldn't find anything because $10mio a year per person in charge seems to make them think twice about what actually happend and if that + isn't actually a - .
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The solution is better contracts
I don't have problems with companies, even drug companies, making a profit. But when it seems extortionate like this, it is a problem.
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1. If 80 or 90 percent of the work was done and funded by public science, how the hell did this company get the patent?
2. If 80 or 90 percent of the work was done and funded by public science, and they do give the patent to a private business, why doesn't a representative of the people sue the government for their 80 or 90 percent back? The people have already paid for the research and development, they should only be charged for materials and manufacturing now right?
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Look up Bayh-Dole Act. I don't know if it applies for this drug, but it is perfectly legal for research done with public funds to be patented by the institution that did the research and then that institution can make whatever deals it wants for whatever price it wants.
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discovery process
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Why do you hate capitalism?
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Re: Why do you hate capitalism?
If we could remove all personal benefit politicians can receive based on their office/decisions.. you would only get the idealists in office. THEN we may be onto something. When politicians are allowed to lobby, take lucrative jobs, and get paid really well when they leave office, by the very people that they were supposed to be regulating while in office, you get corruption. It's that simple.
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Re: Why do you hate capitalism?
On the other hand, if I can profit $499,000 for every $500,000 prescription I sell, great that I am willing to watch others suffer while I become mega rich. Thats inhumane capitolism.
The question that is difficult to answer is where do you draw that line in the sand?
Pharma companies are entitled to make profits just as much as bottled water companies.
From my point of view the real problem here is drug patents AND the difficulty in taking a drug to the market.
In this example, if another company could make a nice profit selling that same drug at $1000, they would do so if the barrier to entry was not so high or prevented by patents.
So maybe the real problem is not capitolism, maybe its too much regulation of capitolism that is allowing such inhumane behaviour.
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Re: Why do you hate capitalism?
If it was a free market, and no corporate protections (patents), then another company would come along and sell the same drug for less - because there's clearly plenty of money to be made. Eventually, this becomes a "race to the bottom", until the price the drug sells for is slightly more than the cost to produce.
That is the nature of a free market... and everyone benefits over time.
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Then again, according to some, Jesus loves the free market even more.
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First Quarterly Report 3:12
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That's in there somewhere, right?
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https://www.biblegateway.com/passage/?search=Matthew+13&version=NIV
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Corporate sovereignty
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Re: Corporate sovereignty
Time to repeal corporate sovereignty, instead of creating MORE treaties that include it. How can Harper & co. really be pushing for acceptance of *international* corporate sovereignty when Canada has already been damaged so much by a single agreement with the US and Mexico?
Trudeau, if you're reading this... time to add this to your war chest of campaign issues.
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Canada has a very easy choice, either pay the price or don't have it on formulary. A company has the right to set the price, the buyer has a right to agree or not. It is pretty easy.
Want to change the equation? Start your own fucking company and come up with this yourself. Why the fuck doesn't Canada have their own companies doing this? Why doesn't Canada as a government, run their own R&D, Clinical Trials and manufacturing?
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If a company wants to sell their products in a country, then they have to follow the laws and regulations of the country. If they don't want to deal with the 'hassle' of a government agency having the audacity of getting between them and the profits they are 'owed', then they are welcome to use zero public funding/research for their drugs, not file for a patent in that country, and not sell anything at all in the country.
Don't want the downsides of government 'interference'? Then you don't get the upsides of government 'protection'.
Why doesn't Canada as a government, run their own R&D, Clinical Trials and manufacturing?
Funny you should mention that...
'In case of Soliris, most of the research and development was done by university researchers working in academic laboratories supported by public funds.
"I think the public science is well over 80 or 90 per cent of the work," said Sachdev Sidhu, a University of Toronto scientist who is also in the business of drug development.'
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That isn't the point. Canada can choose to not buy the drug. People can choose to not take the drug. Governments are free to research, develop and get a drug on the marketplace. For some reason, they have not.
Why is that? You say it is a public good, then why isn't a public entity actually doing this?
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Canada is saying "We aren't willing to buy this drug unless it's at least X cost, which seems like a more than reasonable price based on the drug investment costs of the company."
The company is responding with "Corporate sovereignty states that you HAVE to allow us to sell our drug to ANYONE in Canada at whatever price WE want!"
So they're basically suing because Canada is refusing to buy the drug at the price they want for it. Think about that for a moment. That's NOT free market.
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Because it's a university, the only drugs sold at places like those tend to be the recreational kind.
Did university researchers run the required clinical trails that show that the drug is safe and effective?
Given the quote mentions 'research and development', quite possibly. However, if you're so dismissive of the university's 'contribution', then how about the patent for the drug is revoked until the drug company can do all of the work themselves, going through all steps, and paying entirely with their money. Shouldn't be that expensive right, I mean the university just did the R&D, and as anyone knows, it's not like that's an important step or anything.
In fact, best do this for all future drug patents, bar pharma companies from using R&D from anywhere but their own teams, got to make sure the quality is the best after all, can't be taking shortcuts like letting the public fund it.
Canada can choose to not buy the drug. People can choose to not take the drug. Governments are free to research, develop and get a drug on the marketplace.
Or Canada can tell the company 'You'll either sell it at a lower rate, or you won't sell it at all in this country', which is apparently exactly what they did, and what's got the drug company throwing fits. The company only has the patent on the drug thanks to a government granted monopoly, and what they grant, they can also revoke.
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Like what's happening with Uber, Lyft, AirBnB, and others of their kind.
And a new one I just found out about: http://www.azcentral.com/story/entertainment/dining/wine/2015/09/29/arizona-wine-shipment-crackdown/ 72755478/
(Warning: may be paywalled; you only get a few free looks.)
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Response to: Anonymous Coward on Sep 30th, 2015 @ 10:01am
We do but somehow the big US companies manage to buy them out, strip them clean and then close them down.
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The R is the cheap part, the D, which consists of clinical trials, is the expensive part. That is done by drug companies. Why doesn't universities and governmental agencies get into the business of running clinical trials too? Once they do that, get approval, they could outsource the manufacturing and then sell the drug for whatever price they wanted to?
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That's what this news piece is all about. Canada threatened to not buy from them at that price, and they sued Canada.
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Competition!!
Anybody should be allowed to manufacture even patented drugs, but to cover patent holders R&D there should be a small percentage of the sale price paid to the patent holder.
This would give the patent holder a small cost advantage over competing suppliers but if they get to greedy, other manufactures will step in and compete. it's called capitalism and competition isn't a feature, it's a requirement!
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Re: Competition!!
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Best solution
Well in india, one philanthropic entrepreneur started a drug company, they would add inert proteins to costly drug and sell them at nominal profits. They even won court cases, the big pharma caved in else they would loose their ability to evergreen.
Sorry the name slips my mind right now.
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A few policitcal donations will fix that
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Canada would be free to not reimburse people for the drug, lawsuit or no. They companies lawsuit is more along the lines of "hey, you didn't have a problem with the cost earlier, why now?" Your logic stated in the review board to lower the cost was faulty.
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Really, you should.
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• Richard Levin and others surveyed high-level R&D executives in more than 100 manufacturing industries, and found that "In only one industry, drugs, were product patents regarded by a majority of respondents as strictly more effective than other means of appropriation.... . Comparatively clear standards can be applied to assess a drug patent's validity and to defend against infringement," whereas such standards cannot be applied to assess other kinds of patents (e.g., patents on components of complex systems).
•As the figure shows, Edwin Mansfield found that 65 percent of pharmaceutical inventions would not have been introduced if patent protection could not have been obtained; for the 11 other industries he studied, this percentage was only 8 percent.
•Congress has recognized the importance of patent protection as an incentive to pharmaceutical R&D. For example, as part of the Hatch-Waxman Act, Congress provided for patent term extensions to offset some of the time that drugs spend in clinical testing and in the FDA review process.
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Lipitor was a pretty good drug that could be used by millions of people, so the cost didn't have to be that high to generate profits. Who would invent drugs that only treat a relatively small number of people? What company would do that? The FDA came up with the Orphan drug act for exactly that reason.
Investment chases return, it is really that simple. Remove the return and you will not see the investment.
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BCG is the best treatment for bladder cancer. It is generic, and it is in short supply. Why do you think that is? People will die of bladder cancer because this drug is not available. That is a shame.
Profits drive investment.
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No link to pleadings?
A couple of observations:
* The government's deadline for responding is apparently Monday 12 October, one week before Canadian federal elections. Stephen Harper's Conservatives are running neck and neck with the social-democratic NDP, and Harper has got to be weighing the electoral consequences of his response.
* If the PMPRB is using US prices as a benchmark, I have to wonder if this dispute (over a 4% or 5% price difference) isn't faux-regulatory theater. It would be interesting to know what prices France, the UK, the Netherlands, and Japan have negotiated (or dictated) for Soliris.
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