Category Archives: Patents

The $153,000 Snake Bite and America’s Decline

The paradox of American capitalism is that we say it works best when there is a “free market” with competition.  But as we have seen time and again the goal of business, even in healthcare, is obtain monopoly status (i.e. eliminate competition) for your “product” and then gouge your customers–a great business plan, no?

This was brought home by the Washington Post article reporting a snake bite for which medical costs were $153,000.

The bulk of his hospital bill—$83,000 of it— is due to pharmacy charges. Specifically, charges for the antivenin used to treat the bite. KGTV reports that Fassler depleted the antivenin supplies at two local hospitals during his five-day visit. Nobody expects antivenin to be cheap. But $83,000?

There’s currently only one commercially-available antivenin for treating venomous snakebites in the U.S. — CroFab, manufactured by U.K.-based BTG plc. And with a stable market of 7,000 to 8,000 snakebite victims per year and no competitors, business is pretty good.

and

BTG has fought aggressively to keep competitors off the market. A competing product, Anavip, just received FDA approval this year and likely won’t be on the market until late 2018. This lack of competition is one reason why snakebite treatments rack up such huge hospital bills — $55,000. $89,000. $143,000. In May of this year, a snakebit Missouri man died after refusing to seek medical care, saying he couldn’t afford the bill.

Excessive costs  are nothing new to anyone with a serious illness.     New cancer drugs for example start at $100,000/year for the drug alone, whether they work or not.  As a matter of fact most don’t work at all for the majority of patients treated with them.

This article was almost immediately followed in my browser by the brief statistical review of the 12 economic signs that the U.S. is on the decline published in Fortune magazine  based on the academic article Is the U.S. Still the best Country in the World? Think Again by Hershey Friedman and Sarah Hertz.  Interestingly the thesis of the article is not that the U.S. has too many regulations but rather that unfettered capitalism really really does not work.

“Capitalism has been amazingly successful,” write Friedman and co-author Sarah Hertz of Empire State College. But it has grown so unfettered, predatory, so exclusionary, it’s become, in effect, crony capitalism. Now places like Qatar and Romania, “countries you wouldn’t expect to be, are doing better than us,” said Friedman.

Read the article for the 12 signs but consider that whether it’s incomes, poverty levels, internet speeds, education, health, or prison population the U.S. lags other countries in the world.  Hardly the position for a world leader.

Medicynical Note:  I would posit that the snakebite anecdote is the concrete example of the second article’s thesis.  Our costs lead the world (yes that is one area we are world leader) and that in turn affects access, quality and yes the economic well being of citizens.  The U.S. continues to lead the world in bankruptcy from health care costs–a category of bankruptcy unknown in other countries.

Even more damning is that patients almost never know the cost of a  health care service AND providers (hospitals and practitioners) have little certainty  as to what they will actually be paid for the service rendered.  And yes adding to the insanity,  people billed directly, those without insurance and least able to pay, are billed more, much more, for the same services.  That’s true predatory capitalism!

ASCO Meeting: Cancer Drugs Unsustainable Pricing, Getting Worse!

Only on rare occasions does the yearly meeting of oncologists (ASCO) confront the reality of spiraling drug costs for cancer.  After all, the meeting is largely sponsored by drug companies and most of the research oncologists are in the pay of the drug companies (literally and figuratively).  But this year Leonard Saltz raised the issue, as he has done in the past, a more or less lone voice in the wilderness.

Dr. Saltz’s remarks focused mainly on an experimental melanoma treatment made by Bristol-Myers Squibb Co. , but he also criticized pricing more widely. He cited statistics showing that the median monthly price for new cancer drugs in the U.S. had more than doubled in inflation-adjusted dollars from $4,716 in the period from 2000 through 2004 to roughly $9,900 from 2010 through 2014. Dr. Saltz cited studies showing that the price increases haven’t corresponded to increases in the drugs’ effectiveness.

And talking about a new regimen for malignant melanoma:

Dr. Saltz said the combination regimen’s benefit was “truly, truly remarkable for a disease that five years ago we thought was virtually untreatable.” But he said that combining the drugs would cost around $295,000 a patient over nearly one year, which he called unsustainable. If all U.S. patients with metastatic cancer took drugs priced at $295,000 a year, it would cost $174 billion to treat them all for just one year, Dr. Saltz said.

Medicynical Note:  The irony of drug development is that the most effective regimens require the least testing on patients because they work.  It’s the regimens with results that are marginal and maybe not even real that require large randomized studies to prove even a paltry few weeks delay in progression so as to get FDA approval. 

Whatever the cost of development, drug companies price drugs based at least in part on the seriousness of the illness treated.  The more desperate the situation, the higher the price.  A little like “your money or your life.”

Our congress doesn’t allow the FDA to evaluate cost effectiveness of regimens and doesn’t allow Medicare to negotiate prices with drug companies.  After all, the unstated goal of our non-system of health is NOT affordable care for all citizens but rather protection of the profits of patent holders and maintaining the cash flow of some of the most profitable corporations in the country. 

You think that’s why our health care is the most expensive by far in the world but only has average results? 

Psst, in case you are worried about American Exceptionalism, we also lead the world in bankruptcy from health care costs, we’re number 1

Corporate Cheaters in Health Care? Shocking!

It becoming increasingly apparent that Big Pharma and other medical suppliers game the “system.”  Consider:

The past decade has seen a relatively constant rate of newly approved drugs every year. The number has even jumped in the past few years. Yet, despite such encouraging trends, we are actually facing a crisis in drug innovation today. That is because many of these new products do not offer substantial improvements over already available alternatives.

And:

At the same time, novel and effective treatments for many diseases—both rare and common—remain elusive. For example, there is widespread concern over the lack of development of new antibiotics aimed at multidrug-resistant infections. Therapeutic innovation for central nervous system disorders such as dementia and psychoses, which affect almost 100 million Americans, has likewise stagnated.

In this climate, pharmaceutical manufacturers have nonetheless continued to thrive. The top eleven drug manufacturers made $711 billion from 2003 to 2012, including $68 billion in 2012 alone, translating to an industry profit margin on par with the banking sector.

Yet some of these profits have been acquired through illegal marketing practices that lead to unnecessary over-prescribing of their products, including issuing kickbacks to physicians, making false claims about their products, and marketing drugs for unapproved uses for which there is no evidence of efficacy despite important risks potentially leading to adverse patient outcomes. In the past five years alone, pharmaceutical companies have been required to pay over $13 billion for such violations.

Read the rest of the article here.

Medicynical Note:  Health Care in the U.S. is all about money.  Value, affordability, efficacy, whatever is not their first priority, maybe not even their second or third.

Drug Costs Outstripping the Ability to Pay

Health Affairs’ blog had an interesting discussion of the problems of our drug patent system and it’s costly consequences.

One critical incentive for ongoing drug discovery and development is the temporary monopoly pricing that manufacturers can command for novel drugs. Yet this incentive, embedded in current patent and regulatory policy, does not guarantee that manufacturers will deliver novel products with clinically meaningful benefits. Indeed there are many diseases—including Alzheimer’s disease and Amyotrophic lateral sclerosis (ALS)—that pose significant patient, family, and societal burden but have not benefited from meaningful treatment advances.

Meanwhile, the American public appears increasingly wary of the unintended consequences of these market-based incentives. Since the early 2000s, regulatory actions have focused increasing public attention on shortfalls in the efficacy and safety of already marketed drugs — including the withdrawal of celebrated “blockbusters.” Recently, patient and insurer attention has focused on the list prices of novel specialty drugs, including those to treat cancer, that commonly exceed $50,000 per treatment course — these drug prices have also grown faster than all other medical spending.

Medicynical Note:  In the U.S. the medium and average family incomes are about $50-60,000/year.  So we are talking drugs that cost multiples of the annual incomes of families.  A few of these drugs have miraculous effects but most offer slight improvement in patint’s outcomes. 

Other countries try to control these expenditures by providing strong guidelines on expensive medications use; negotiating prices with the manufacturers and suggesting equally or more effective alternatives.   Their costs are significantly less than ours.  The Affordable Care Act has started this process but whether or not it’s political overseers (under the influence of  drug companies contributions)  will allow a rational implementation remains to be seen. 

It’s NOT a Health Care System

The Times reports on bribes given to health care providers to prescribe their patent protected product.  In this case it’s a addicting medication.

Dr. Judson Somerville, a pain specialist in Laredo, Tex., received $67,000 in speaking fees, travel and meals in 2013 to promote a powerful and addictive painkiller called Subsys, according to a new federal database of payments that drug companies make to physicians.

But while Insys Therapeutics, the Arizona company that makes the product, was paying Dr. Somerville to promote it, he was under investigation by the Texas Medical Board. Last December, the board ordered him to stop prescribing painkillers after it found that he had authorized employees to hand out pre-signed prescriptions to patients and after it learned that three of his patients had died in 2012 of drug overdoses, most likely from drugs that he had prescribed.

Read the article and weep!

Medicynical Note:  Health care in the U.S. is not systematically provided and the way it is delivered is not a “system” to provide it.   Rather what patients received is carefully designed “system” to maximize revenue for providers, hospitals, insurers, technology developers and pharmaceutical manufacturers.  The well-being of their stock holders and investors are much more important to them than the well-being of patients. 

A Modest Proposal: Eliminate Patents on Drugs

I’ve heard from my libertarian friends of the beauty and efficacy of an open unfettered marketplace.  They maintain that regulation causes inefficiencies and the less there is the better.  In medicine there are necessary protections to assure safety (if not efficacy) of medical interventions.  But also there is a regulation that assures excess profits for drug developers, i.e. patents. 

The recent article in the New Yorker Ebolanomics highlights the costs of drug development and offers a new model for drug development. 

When pharmaceutical companies are deciding where to direct their R. & D. money, they naturally assess the potential market for a drug candidate. That means that they have an incentive to target diseases that affect wealthier people (above all, people in the developed world), who can afford to pay a lot. They have an incentive to make drugs that many people will take. And they have an incentive to make drugs that people will take regularly for a long time—drugs like statins.

Read the article for more.

In addition to trying to develop drugs that are used by “everyone” as noted in Ebolanomics, gouging the sickest patients to increase drug company revenue seems to be the alternative model of the drug development.  The excessive prices appear to be unlinked from development costs or  efficacy and are solely dependent on how desperate the patients are, the more malignant the disease the higher the cost.   Drug costs for cancer patients since the 90’s have increased by a factor of almost 100.  I recall new drugs in the early 90’s in the range of a few hundred dollars/dose.  By the end of the 90’s that cost was $1000/dose and with the advent of targeted drugs that cost is over $100,000/year. 

Medications have become the most expensive part of medical care.   A drug now costs more than that Mercedes you’ve been eyeing.  And if it were developed for cancer treatment as often as not it provides just a few months of benefit. 

Drug company costs are hidden behind a veil of secrecy and obfuscation.  Ironically the drugs that are really effective have the shortest development cycle and lowest cost to bring to market.  Consider for example the first targeted agent for chronic myelogenous leukemia,  imatinib (Gleevac).  The drug was developed with government provided research funds.  In it’s first clinical trial it’s efficacy and safety were immediately evident and it’s use revolutionized therapy.  It was immediately taken private and quickly became the most expensive drug on the market.  That despite the government funding and the short drug development cycle.  Charging $100,000 or so/year for it is not based on cost but rather greed.

On the other hand consider the numerous drugs with limited efficacy, i.e. drugs looking for an indication.  These agents are tested and tested and tested and eureka when a one or two month benefit is found, even if it’s a delay to progression with no survival benefit, it is heavily marketed as the second coming and sold for the same price as the truly effective agents, if any.  In this case costs are driven up by the drug’s lack of efficacy and need for many many many trials to find a use for it.

Medicynical Note:  Patents appear to have outlived their usefulness when it comes to drug development.  There is no incentive in the system  to provide value or for that matter efficiency.  Pricing has been delinked from development and marketing rules the roost.  Drug companies interest is in revenue, not healthcare.

Encouraging competition by eliminating patents will do away with the marketing nonsense.  A path to new and innovative drugs would need a new paradigm and the approach offered in Ebolanomics offers one approach.

Primum Eruere patiente (First gouge the patient)

It’s fascinating to watch the business of medicine work diligently to assure continued high prices and profits for medical “advances”—even long after earning back the cost of development.  The well-being of patients and affordability are considered least when profit and monopoly are involved.  Consider these recent examples, first

The language buried in Section 632 of the law delays a set of Medicare price restraints on a class of drugs that includes Sensipar, a lucrative Amgen pill used by kidney dialysis patients.

The provision gives Amgen an additional two years to sell Sensipar without government controls. The news was so welcome that the company’s chief executive quickly relayed it to investment analysts. But it is projected to cost Medicare up to $500 million over that period.

Read the rest of the article for details on Amgen’s recent illegal activities and the extent of it’s political bribery lobbying.

The second example, paying to delay a generic’s release

It would seem a business executive’s dream: legally pay a competitor to keep its product off the market for years.

Congress has failed to stop it, and for more than a decade generic drug makers and big-name pharmaceutical companies have been winning court rulings that allowed it.

Or lastly the extension of the patent because of a technicality as in the  Viagra

If you live in the United States and you have been waiting for generic Viagra to hit the market it looks like you will be waiting quite a while yet. Pfizer, the makers of Viagra, just had a crucial patent validated in a federal court of law.
It all started when the Israeli medical giant Teva received a tentative approval by the FDA for a pill using sildenafil, the active ingredient in Viagra. Teva were intending to start selling the pill in March 2012 when Pfizer’s sildenafil patent runs out.

Pfizer responded by suing Teva for patent infringement, based on a second patent. This patent runs until 2019 and is a so called method-of-treatment patent, meaning that even though sildenafil comes up for grabs in 2012 it would be until 2019 before anyone but Pfizer could market it as an impotence drug.

Medicynical Note:  As long as our system is dedicated to providing more protection to patent holders than patients we’ll continue to be gouged.  It should be noted that other countries don’t put up with such nonsense and they pay less for the patented drug as well as not allowing frivolous extensions.