International and High-cost of medicines
Our previous work on high-cost medicines
The following content was originally published in 2015.
PHARMAC provides the best health outcomes from within the funding provided. We can do that, as a small country in a big market, because we can encourage competition and, ultimately, have the power to say no to pricing being offered. Increasingly, other countries are thinking along these lines too and trying to replicate the PHARMAC model.
Below is a collection of information about international concerns related to the pricing of medicines.
“…current prices … are too high, unsustainable, may compromise access of needy patients to highly effective therapy, and are harmful to the sustainability of our national healthcare systems.”
“Novartis, the company that makes the leukemia drug Gleevec, keeps raising the drug’s price, even though the drug has already delivered billions in profit to the company. In 2001 Novartis charged $4,540, in 2014 dollars, for a month of treatment; now it charges $8,488.”
“…private investors spent perhaps $300 million in R&D outlays for sofosbuvir over the course of a decade, and perhaps well below that sum. Those R&D outlays were likely recouped in a few weeks of sales in 2014.”
“Dr Brian Druker, director of the Knight Cancer Institute has asked: "If you are making $3bn a year on [cancer drug] Gleevec, could you get by with $2bn? When do you cross the line from essential profits to profiteering?".
“Contrary to the consumer’s ideal in which bare-knuckled rivals cut prices to grab market share, competitors in branded pharmaceuticals often drive each other’s prices higher. This behavior, known as “shadow pricing,” is one reason U.S. drug costs are surging.”
“The York research highlighted the Cancer Drugs Fund — a special scheme set up by the coalition government to provide extra money for cancer medicines — as a glaring example of waste. For every QALY gained from the fund, five were lost, the study found.”
International payers have systems that don’t promote competition, so have to resort to:
- Delay - in the UK – Hepatitis C drug funding delayed(external link) – The Guardian
- Legislation - in Ireland – Health Minister threatens to legislate to bring prices down(external link) – Irish Times
- Activism - in France – Doctors challenge patent in Hepatitis C drug price protest(external link) – The Guardian
- Regulation and ‘please explain’ - in Canada – Alexion asked to repay sales over 'excessive pricing(external link)’ – Wall St Journal
“Saying no, or even the threat, works to lower prices in the United States, too. But it’s rare. In 2012(external link), my hospital said we wouldn’t give the colon cancer (external link)drug Zaltrap to our patients because it cost twice as much as another drug (Genentech’s Avastin(external link)) that was just as good. When we refused to use it, the company realized that other cancer hospitals and doctors might follow, and halved its price nationwide.”
“Big drug companies," says Helena McAlpine are 'absolutely taking the [....]'. The margins on their products are indefensible.”
"I strongly believe now there needs to be a strong focus on the costs that pharma are charging when they introduce new targeted therapies into the market.
"We certainly can't afford all of them and I think our process of carefully assessing the drugs is a good one."
“According to a cost calculator developed at York University, if the £230m spent on the Cancer Drugs Fund between April 2013 and April 2014 had instead been spent in the wider NHS, it could have added over 17,800 “quality-adjusted life years” — a measure that combines survival and quality of life. It estimated that the Cancer Drugs Fund added less than 3,400 during that time.”
“Globally New Zealand is a tiny player, representing just 0.1 per cent of the pharmaceutical market.
“Yet Pharmac pays some of the lowest prices in the world for medicines, using a combination of tendering and negotiations to encourage competition between drug companies.”
When prices reduce, we create opportunities for better health outcomes
“The introduction of lower cost biosimilar filgrastim and the subsequent price reduction on pegfilgrastim means we use fewer hospital resources and deliver optimal chemotherapy more safely to more women with breast cancer.”
MidCentral Health oncologist Dr Richard Isaacs