No reasonable person would begrudge pharmaceutical companies a fair return on their investment in research, development, and distribution of life-prolonging drugs. But when these companies jointly start raising prices on competing drugs just because they can, serious ethical and political issues are raised. The New York Times reports–
A group of new drugs is promising to prolong the lives and relieve the symptoms of men with advanced prostate cancer, but could also add billions of dollars to the nation’s medical bills.
“What a great time it is in prostate cancer,” Dr. Daniel J. George of the Duke Cancer Institute proclaimed earlier this month at the annual meeting of the American Society of Clinical Oncology.
And it’s a great time for the drug makers, with several drugs competing to fill a niche for longer-term survival. Analysts estimate that some of the new drugs, particularly Dendreon’s Provenge and Johnson & Johnson’s Zytiga, could reach annual sales of $1 billion or even much more.
The recently approved drugs and most of those in development are for cases in which the disease has spread beyond the prostate gland and is no longer held in check by hormone therapy.
Men with that late-stage cancer had a median survival of about a year and a half using docetaxel. The new drugs each added two to five months to median survival when tested in clinical trials. Doctors say that men taking more than one of the drugs in succession would be expected to live more than two years.
But the price of these drugs has already stirred concerns about the costs of care among patients, providers and insurers. For example, Provenge costs $93,000 for a course of treatment, while Zytiga costs about $5,000 a month. Another of the new drugs, Sanofi’s Jevtana, costs about $8,000 every three weeks.
With other pricey drugs on the way, said Joel Sendek, an analyst at Lazard, “We could be talking easily $500,000 per patient or more over the course of therapy, which I don’t think the system can afford, especially since 80 percent of the patients are on Medicare.”
Still, for now, one company’s price is prompting the next one to follow suit.
“The pricing environment is encouraging and getting better for us,” Andrew Kay, the chief executive of Algeta, told securities analysts earlier this month, after announcing that his company’s experimental drug had extended median survival nearly three months in a clinical trial.
Mr. Kay said he had initially thought that his company, which is based in Norway, would charge about $25,000 for a typical course of treatment with the drug, Alpharadin. But with the rival drug Jevtana costing about $50,000, Algeta and its partner, Bayer, are considering a higher price