Archive for March, 2017

Pharma Spends More On Marketing & Sales Than R&D…Again

Posted by on March 30th, 2017

Direct-to-consumer advertising is a mainstay of pharmaceutical marketing the US. The US and New Zealand are outliers among developed nations; they are the only ones who still permit direct-to-consumer advertising for pharmaceuticals. Advertising and marketing pharmaceuticals is controversial for a number of reasons. The ads direct their message directly to people not medical practitioners, who may be better able to evaluate them against competing therapies. Pharma ads are also a topic of controversy because of their relationship to new drug R&D.

Big pharmaceutical companies by and large spend more money on marketing and sales than they do on research and development. This isn’t a new trend either. It’s been consistent for many years. Pharma’s classic line is: personal drug importation is bad because it will affect the development of new drugs. Yet their spending habits clearly indicate that they’re more likely to invest in new ads than new drugs.

FiercePharma recently released a list of the top 15 pharmaceutical companies by revenue in 2016. We examined the annual reports and regulatory filings of these companies to see how their R&D and marketing spending tallies up. It’s very clear, not much has changed. The trend is still in place.

Quick Takeaways (Top 15 Pharmaceutical Companies)

  • Total Revenues for 2016: $524.26 billion
  • R&D spending for 2016: $91.45 billion (17% of revenue)
  • Marketing spending for 2016: $135.57 billion (26% of revenue)
  • These companies spent 48% more on marketing than on R&D in 2016.

Pharma’s high prices are more likely to be used for glossy ads and marketing campaigns. Only three of the 15 companies listed above spent more on R&D than they did on marketing.

A little healthy skepticism is a good thing. Whenever you hear big pharma, their lobbyists, or surrogates say personal drug importation would negatively affect drug R&D you will know the truth. Don’t be fooled by their attempts to create fear and confusion. If you would like to do something but don’t know where to start, check out the Campaign for Personal Prescription Importation. They’re a grassroots campaign working to get personal importation opened up for every American. You can also write your congressman or senator and ask them to support one of the numerous personal importation bills that are before congress right now.


Drug Costs Exceed The Cost of Hospitalization

Posted by on March 29th, 2017


For the first time in history, the cost of drugs has exceeded the cost of hospitalizations. Hospitalizations have not decreased, but rather the speed of prescription drug price increases has surpassed the rate of increase in the cost of hospitalizations. As a result, hospital pharmacies are also being pickier about which drugs they stock. They are cutting back on the use of expensive new drugs and many formularies have rejected new and cutting edge medications altogether due to the cost. This shouldn’t surprise anyone. It was only a matter of time before hospital budgets began to weaken under the weight of high drug costs.

There’s a disconnection between drug companies and the people who need their products. Drug companies are virtual monopolies, able to produce and price at will. They believe they deserve the highest possible price for their product, even if that price will make their product nearly unaffordable for anyone. There are a number of reasons high drug prices persist in the US; monopolistic pricing practices by big pharma, patent laws that give long term exclusivity, anti-competitive practices like evergreening or pay-for-delay, and an FDA approval process that doesn’t deal with the question of value.

A cutting edge, or long established, drug priced so high hospital pharmacies won’t stock it, is of no use to anyone. Yet when it comes time to accept responsibility for the problem, big pharma will point at anyone except themselves. We all probably know someone who never takes responsibility for anything. They always blame someone else and never acknowledge their own culpability. That’s the pharmaceutical industry. They will blame insurers, pharmacy benefit managers, the government and anyone else for the problem of high drug costs. The problem, they say, is not that their prices are too high, but that payers (insurers) refuse to pony up the money and provide the coverage they should. Pharma’s strong belief in its right to be compensated at whatever level it wants, regardless of people’s ability to pay, or the market’s ability to bear the cost, is a big problem.


Top 5 Pharma Excuses Against Drug Importation

Posted by on March 29th, 2017

Pharmaceutical lobbyists have spent a lot of time publishing arguments against the personal importation of prescription drugs lately. The profusion of anti-importation articles suggests that the idea is no longer being batted around as a hypothetical idea, but is being seriously considered as a solution to high US drug prices. After all, lobbyists don’t complain or advocate against things that aren’t likely to happen. The pharma lobby has a not-so-big bag of excuses it pulls out to oppose importation. The talking points are clear and well worn. It’s almost as if they keep them on slips of paper in a hat and pull one or two out whenever they feel they need to. Here’s the top five.

Safety issues (including the risk counterfeited and/or adulterated drugs) preclude importing finished pharmaceuticals from other countries. Doing so could compromise the US drug supply.

Ordering drugs from licensed pharmacies in Canada is safe. Canada has safety standards for pharmacies and pharmaceuticals which are the equivalent of those in the United States. Legitimate Canadian online pharmacies are licensed by the College of Pharmacists in the province they are located in. They have licensed pharmacists on staff who can be consulted; they also require a prescription from a medical practitioner licensed to practice in the patient’s area of residence.

Third party organizations like the Canadian International Pharmacy Association (CIPA) and Pharmacy Checker play a part in confirming the legitimacy of online pharmacies. They inspect pharmacies to make sure they not only comply with local regulations but also their own, often more stringent, regulations too.

There have been no stories of large numbers of Canadians becoming sick or dropping dead from their medications. In fact, the medications that Canadians get are the same as the products marketed in the US. They are regulated in a similar fashion to the US. Counterfeited and adulterated medications from rogue “pharmacies” are a concern but by following a few simple tips you can avoid them:

  • When using an online pharmacy, always look to see if they are members of CIPA or Pharmacy Checker. If they display the badges of those organizations, go directly to the organization and confirm they are actually members. Rogue websites will often steal these badges. CIPA approved pharmacies currently have a perfect safety record.
  • They must require a prescription for prescription medications. If every pharmacy you’ve visited requires a prescription for a particular medication but the one you’re currently looking at doesn’t it is a cause for concern. There are cases where a drug which may be a prescription drug in the US and is over the counter elsewhere but this is not common. Further, any pharmacy that offers to prescribe a drug for you should be avoided.
  • Legitimate pharmacies will have licensed pharmacists on staff available to answer any questions you may have about the drugs your taking.
  • Legitimate pharmacies are licensed by the pharmaceutical regulator in their area. For example, CanadaDrugs is licensed by the College of Pharmacists of Manitoba. Some websites are brokers and do not actually provide pharmacy services themselves. In this case the pharmacies they do business with must be licensed and provide pharmaceutical counselling services.

Prescription importation will export high US drug prices to other countries.

This one is a bit of a head scratcher. This excuse often makes it seem they want to protect the lower prices in other countries. Altruistic as that is, it is designed to make Americans think twice about ordering medications from other countries. It’s something like this: Americans are kind people and would not want to do anything that would put people in other countries in the same position they are when it comes to high drug prices. Pharma lobbyists argue importation would rapidly deplete stocks of drugs in places like Canada. Plus drug companies might hike prices there or delay introducing new products as a sort of retaliation for providing a work around to high US drug prices.

The problem is that the argument assumes Canada would become the pharmacy of the US. This is unlikely. Considering the majority of Americans take one or more prescription drugs, only a small proportion of Americans ever make use of importation. For most people they have coverage through their health insurance or government coverage to make personal importation financially unnecessary. Importation is a safety valve for those whose personal circumstances mean their prescription drug costs can be helped by ordering from Canada.

Prescription importation will affect new drug research and development.

This is one of the most cited excuses. Pharma says that allowing prescription importation will cause R&D funds to be reduced as there won’t be as much money coming in to fund it. It’s an assertion that was recently debunked by Health Affairs. The top 15 pharmaceutical firms combined raked in over $500 billion in revenue in 2016. They spent 17% of that revenue on R&D while spending 26% on sales and marketing.

You don’t pay the full amount anyways. The majority is covered by insurance/the government.

This is a straw man that easily blows down. Insurance companies and governments do not have money of their own; they must get it from somewhere. That “somewhere” is your pocket. Insurance companies make money by charging premiums, copays and coinsurance. Governments cover their expenses through taxes and debt (which must be serviced by more taxes). Many government medical programs (like Medicare) also charge premiums and copays on their services. So you pay several times, through copays, premiums and taxes.

As drug prices rise insurance have to find a way to compensate for increased costs. They are not endless wells. To compensate for their higher costs they will charge their customers higher premiums and copays. People who use personal prescription importation often do so because they find that online prices for their medications is lower than their premiums and copays.

Importation will import government prices controls.

Drug prices in Canada are a combination of government regulation and mass negotiation. It’s negotiation that provides the true savings. Provinces band together in massive buying groups that ensure they get the best possible deal from drug companies. US States and the federal government could band together in the same way to negotiate savings, but they do not. It’s unlikely that allowing personal prescription importation would do much to lower prices in the US as long as insurance companies and the government continue to pay for them. And it’s very unlikely that Congress, having opened prescription importation to the public, would then proceed to mass price controls.

Allowing personal prescription importation IS the alternative to mass price controls. People are angry about high drug prices. Many people are clamoring for the government to exercise patent march-in rights and start manufacturing and selling prescription drugs at lower prices. This would amount to price controls far than importation would. Importation is a free enterprise idea.

Conclusion

So there are five of the most common pharma anti-importation talking points. They will likely be walked out numerous times in the months ahead as healthcare undergoes big changes. You can add your voice to the growing chorus of people demanding change. You can add your voice by joining the Campaign for Personal Prescription Importation.


Cancer Drug Prices Are Through The Roof

Posted by on March 27th, 2017


When you’re being treated for cancer the last thing you should have to worry about is your financial health. Yet it’s all too common. People find themselves with massive out-of-pocket costs they are unable to readily pay. Many have to take out loans or sell/re-mortgage their homes and possessions to pay for their treatment. Those with few assets to draw on will often skip doses or not take medications at all. That’s dangerous with an illness like cancer. The drugs prescribed by doctors either keep cancers in check or at least slow their advance. By not taking them, patients risk their cancers advancing faster and a reduction in their quality of life.

Most new cancer medications enter the market with a price tag of $100,000+. That’s more than the blockbuster Hepatitis C curatives Harvoni or Sovaldi. Around 25% of cancer patients refused to fill a cancer prescription because of cost, another 20% only partly filled a prescription or didn’t take the dosage prescribed. The problem is exacerbated by the fact that a large number of cancer patients are covered by Medicare which does not cap co-pays. Those with private insurance often have it through their employer, yet many people have to cut back work hours or quit their jobs to deal with the illness. That leads to the loss of insurance, which leads to increased costs.

High drug costs disproportionately affect the elderly. They often have many chronic conditions and 50% have less than $13,800 in assets. Medicare co-pays take up a more significant portion of their incomes. The cracks in the system are huge and a large number of people are slipping through. People are being forced to focus on their finances rather than their treatments. This is far from ideal, and high drug prices play a big part of it. Cancer drug costs are among the top causes of bankruptcy. To give you an idea of how much cancer drugs cost we put together this chart.

Brand Generic Manufacturer Cost
Avastin Bevacizumab Hoffmann-La Roche AG $100,000/yr
Herceptin Trastuzumab Hoffmann-La Roche AG $54,000/yr
Revlimid Lenalidomide Celgene Corp. $128,666/yr
Gleevec Imatinib Mesylate Novartis $146,000/yr
Zytiga Abiraterone Johnson & Johnson $5000/month
Tasigna Nilotinib Novartis $80,000/yr
Afinitor/Votubia Everolimus Novartis $168,000/yr

Frustration about this should be paired with action. You should write your congressional representatives and ask them to support one of the many personal importation bills before congress. You can also join the grassroots Campaign for Personal Prescription Importation.


High Prices Are Needed to Fund New Drug R&D?….Not Quite

Posted by on March 24th, 2017

A new study throws some much needed additional light on an issue we’ve talked about a lot. Health Affairs reports that one of pharma’s most common excuses for high drug prices is just smoke and mirrors. The people at Health Affairs looked at the 20 globally best selling drugs (made by 15 different companies) in 2015. They wanted to test whether the assertion that high drug prices in the US are necessary to fund new drug R&D. They determined that list prices in other developed countries averaged 41% of the US net drug price. The amount earned by US net drug prices exceeding other countries list prices was $116 billion. The study found that the companies studied spent $76 billion globally on R&D.

“We found that the premiums pharmaceutical companies earn from charging substantially higher prices for their medications in the US compared to other Western countries generates substantially more than the companies spend globally on their research and development. This finding counters the claim that the higher prices paid by US patients and taxpayers are necessary to fund research and development.”

This is something patient advocates have been saying for a long time. The Campaign for Personal Prescription Importation showed how drug companies spend more on marketing than they do on R&D. Here is more proof that personal importation would not jeopardize the ability of the pharmaceutical industry to fund new drug research.

The pharmaceutical industry seemingly wants you to believe that they actually don’t make any money from selling their products in Canada or Europe. If that were true, they wouldn’t sell in those places. In fact the only thing that is reduced is their ability to set arbitrarily high drug prices. They have a major pricing advantage in the United States they are trying to protect.

Pharma’s traditional excuses for their arbitrarily high drug prices are falling apart. It isn’t surprising; they weren’t all that believable to begin with. Americans have been fed a steady diet of misinformation by the pharma lobby and they’re tired of it. The pharma lobby’s only concern is making money and protecting its clients. Americans are viewed by pharma’s lobbyists as a source of income.

If you’re tired of the excuses and high drug prices you can make a difference. Lend your support to the Campaign for Personal Prescription Importation. Write to your senator or congressman and tell them how personal importation has positively impacted your life or the life of a loved one. Urge them to support the efforts in Congress to allow personal importation. It’s time to get this done!