“The analysis piece in the BMJ below summarises the crisis we find ourselves in. I am already depressed post-brexit and this article made me even more depressed. We have created the beast ‘Big Pharma’ to help commercialise innovation that we in academia don’t have the resources to do. Society has a deal with Pharma to act in a socially responsible way and instead we get pure greed. The issue of price gouging seems to be increasingly an industry-wide problem and not simply limited to a few rotten apples. I think it is time for Pharma to look itself in the mirror and ask some soul searching questions. At the end of the day people who work for Pharma, are no different to you and me, they get up and go to work in the morning, have relationships, get married, have children and they also get sick. However, Pharma people are in a very privileged position in that as a collective they make a massive difference to the world. In the example below, Pharma have commercialised a class of drugs that cures people. Wow this is the stuff of legends; we should be celebrating their success not denigrating their business practice. However, when Pharma perpetuate and widen the inequalities of the world, which have emerged with globalisation, we need to ask ourselves is there an alternative way for society to develop drugs? I am not sure a neoliberal approach works when it comes to healthcare; it is time for politicians to rethink, and renegotiate, the deals society has made with the pharmaceutical industry.”
Excerpts:
Key messages
- Gilead’s $11bn acquisition of sofosbuvir after phase II studies magnified the speculative costs of drug development
- The resulting $35bn in revenue has been primarily directed to shareholders via share buybacks rather than to further research and development
- The public pays “twice,” both funding pivotal early research and purchasing the drug at high prices
- Solutions include giving health systems increased power to negotiate pricing and payment models, limiting share buybacks, and testing other ways to encourage and reward drug development
….. Sofosbuvir based medicines have marked an important breakthrough for patients with hepatitis C infection, offering cure rates of over 90%. The virus is a leading infectious killer globally, disproportionately affecting vulnerable groups such as people who inject drugs or have HIV/AIDS.1 Even after discounts offered from a US list price of about $90 000 (£70 000; €80 000) per three month treatment course, however, the cost of these drugs, manufactured by Gilead Sciences, has challenged government budgets and led to rationing…..
…… One argument for the high prices has been that the curative drugs represent a major advance in value to patients and health systems. They are indeed more cost effective than many expensive medicines that provide only marginal benefit. Yet the company’s ability to charge high prices ultimately relies on monopoly protections via patents, which the industry has long argued are necessary to encourage costly research and development. Critics, however, charge that these costs are exaggerated…..5
….. During the 2000s, a small start-up called Pharmasset emerged from a publicly funded laboratory at Emory University to develop sofosbuvir, the backbone compound behind the new class of curative hepatitis C therapies. Raised primarily from venture capital and eventual stock based financing, the company’s total reported research and development spending (2003-11) in US Securities and Exchange filings was $271m for sofosbuvir and other failed compounds.7 8 From this total, Pharmasset reported $62.4m specifically for developing sofosbuvir from preclinical research to phase II trials.6 At this stage, Pharmasset identified a future budget of $125.6m for taking sofosbuvir through phase III trials and FDA approval, bringing the compound’s total past and projected development costs up to $188m…..
….. Phase II trials of sofosbuvir showed a more promising cure rate than Gilead’s in house prospects. In anticipation of an annual $20bn market in coming years, Gilead acquired Pharmasset for $11bn in November 2011 using cash from previous profits and new debt. Gilead gained approval for sofosbuvir by December 2013 after completion of four phase III registration studies and with the help of the FDA’s accelerated approval pathway…..
….. The company has since combined sofosbuvir with a series of in-house protease inhibitors (ledipasvir in Harvoni, for example), aiming to create a single oral regimen that shortens treatment from 12 weeks to under eight weeks for some patients. Though Gilead has not shared the costs of its failed compounds and previous in-house research, the company reported aggregate costs of $880.3m to the US Senate for sofosbuvir based clinical trials from 2012 to 2014….
….. Gilead’s function as an acquisition and regulatory specialist in drug development for hepatitis C reflects a strategic preference shaped by financial concerns. In an April 2015 earnings call, then chief executive John Martin reinforced this approach to Gilead’s investors: “We typically like things where we can have impact on phase III and where we can accelerate those products either into the approval process or into greater indications after the approval process.” Gilead’s preference is part of an industry-wide pattern. A 2014 study found that companies deemed to be “winners” earned more than 70% of their sales from products developed by other companies….
…. Examining the destination of Gilead’s hepatitis C revenue reveals a second form of speculation that distorts the claimed link between high prices and further innovation. By the first quarter of 2016, Gilead had accumulated over $35bn in global revenue from hepatitis C medicines since their launch in December 2013. This revenue is over triple the cost of the initial acquisition of Pharmasset and nearly 40 times the cost of Gilead and Pharmasset’s combined reported costs for developing sofosbuvir based medicines…..
…… Beyond stockpiling a portion of this money for future acquisitions—Gilead holds nearly $21bn in cash —where have its profits gone? Since the beginning of 2015, the company has announced $27bn in “share buybacks” to be executed over the coming years. Share buybacks, which emerged in the 1980s and peaked in recent years, are a financial manoeuvre whereby a company purchases its own shares to increase the value of the remaining ones…..
….. Some may argue that the trade-offs between innovation and access are the textbook result of private companies competing in free markets to maximise profits. Yet governments protect pharmaceutical companies from truly free markets through patents, data exclusivities, and prohibition of drug reimportation….
…..Recently, however, an analysis of Gilead’s tax returns indicated that the company had used a common industry practice to avoid nearly $10bn in US taxes by transferring the company’s intellectual property for hepatitis C to an Irish subsidiary…..
……Meanwhile, the public is paying twice: for the crucial early investments in research and for high priced medicines. The US Medicare programme for people over 65, for example, spent over $9bn on hepatitis C drugs in 2015, nearly 7% of its prescription drug budget.41 The US Senate report also revealed that Medicaid spent over $1bn in 2014 while treating only 2.4% of its population with hepatitis C….
Prof G you have your head in the clouds. I suggest keeping your feet on the ground. Greed, and neoliberal philosophy, is what makes the world go around. Without greed we wouldn't have pharmaceutical innovation. Get real!
I think you're only teasing, but how about getting real and let pwMS, neurologists & MS Nurses think on their own feet, putting the licensing process in perspective, particularly when progress is minimal or incremental (such as selling a smaller dose of a long established drug for a prohibitive price). It's a nonsense that innovation only comes with greed.
You obviously haven't heard my speech on how "Greed is Good"!https://www.youtube.com/watch?v=PF_iorX_MAw
Ah there you go:-)
Have you read this article? The $600 million man: Gilead CEO's stock gains push compensation way past estimates. http://www.fiercepharma.com/corporate/600-million-man-gilead-ceo-s-stock-gains-push-compensation-way-past-estimates
"At the end of the day people who work for Pharma, are no different to you and me"They are very different to you and me. When last have you received a bonus? The NHS doesn't give bonuses.
"The NHS doesn't give bonuses." NHS Senior managers get bonuses.
I'm sorry but how a lot of NHS money is used is a joke, it's utter madness. I keep reading that senior managers are getting huge amounts of pay per month. The consultants that get huge amounts of cash for overtime. Then I read about GP's prescribing over the counter pain killers which the public can buy from 25p for 16 tablets ibuprofen in supermarkets. It is costing the NHS much more than 25p a packet. It makes my blood boil! Not good for MS.
When characters such as Donald Trump get as much airplay as they do, one should not be surprised or dismayed at yet more proof of how for so many (and particularly those who appear to have nothing but a void for a heart), money is everything. Most unimportant question ever to be posted on this blog: How can it be that, when Trump has a supermodel for a wife, he cannot blend his facial fake tan properly? I mean, I don't actually give a monkey's, but I can't help but wonder, every time I see a photo of him.
Gilead is an extreme example, but I would agree the trend is everywhere.Some pharma employees are regularly trying to bring their companies back to ethics but money is the overall driver, from very early stages of projects. Diseases that have strong advocacy groups – such as AIDS – do have an impact on price and access.So yes, society and public institutions have to renegotiate the deal and create a counter power.
"Diseases that have strong advocacy groups – such as AIDS – do have an impact on price and access."Exactly. And here's the thing, patient driven with real goals, real guidance and real "treat to target" issues.I *JUST* literally been trying get this stuff stick in peoples minds.The "Global Awareness" matter. WHY? Why is it important?Is it because we need people who are healthy to be understanding of MS? That's rather pie in the sky. People globally need be aware of disabilities at large and preferably sensitive to them in which MS is part of.I just do not understand what people are thinking. I live in a community where within a 100 mile radius there are 17,000 active MS cases right now. Western NY. If Ontario Canada gets thrown in that mix as its within that 100 mile radius the number significantly rises again.Everyone here knows what MS is and most know someone alive or not that's endured it. Are people caring or sensitive to it? Ummm no.Is a world going to be? Ummm no.If Trumpster gets erected here WATCH how many people in 2-3 years will be loosing their marbles wanting form up "something" when its past too late as empathy in the face of broken systems does not appear to be one of his strong points. Rallying numbers of people who are tired of THEIR lives being impacted by OTHERS lives is.In electrical terms the online MS community appears to have considerable voltage but in terms of amperage its microamps except when rallied (often incorrectly) to a cause.*IF* global awareness is targeted and thus issues such as India's near complete lack of hope for pwMS comes to bare then change can have foundations.Prof. G?Know any general global number of pwMS who are treatment / care poor in MS? 250,000? 500,000? If India is an indicator at 100,000 est I imagine 250,000 is a realistic number? So 10% of people globally w/ MS are in free fall? More?What happens there matters here. Not only in humanitarian terms but also towards things such as say costing.Its just flabbergasting to me. There are enough MS Folks online that if we all did a "Little" focused we can accomplish more than the few beating their brains out to try and change things.Awareness breeds advocacy and activism which results in power and thus opportunity to change things.I tend be of a mindset that there are also other ways, better ways, mutually beneficial ways towards change.MS being one of the most expensive diseases here in the USA in chronic disease has a big red dot on it now due to effective meds. While "Club MS" meanders about in the field of anecdotal medicine and and cottage cheese psychiatry they face a coming battle where they will be rolled over not even realizing what they are facing.Here, the pendulum will swing even more wild than the UK due to variety of insurer options.
Just wait until oral cladribine is approved. Would a $5000/pill price be cost effective? I predict it will be priced between $12,000 – $15,000 per pill. On the plus side, eventually they go generic.
Would a $5000/pill be cost effective..if it cure MS then I would say yes.Alemtuzumab at £60,000 for 8 injections is so that's £7,500 and injection so about $10,000 per injection and its not a cure at least for 60% of peopleHowever your prediction for $12,000-$15,000 per pill, I think is tad high. When it was sold it was about Euro 20,000 for the years course of the pills. In the US the average price of DMT is about $50,000 per year and I would predict that oral cladribine would not be less than thisIt has to be approved first
Last I heard Alemtuzumab here in the colonies (at a Genzyme event) was a bit over $100,000 for the full course of the treatment. Other expenses not included (MRI's etc).1.5 years back now I had a series (5 shots) of Acthar Gel. Known locally among my friends as "The Acthar Witch Project" was billed out at $38,000. I believe that makes it more valuable than gold by weight.They gave me an extra series just in case I needed it in the future. So $38,000×2. Its still in my refrigerator.Given tendencies they could have offered me a $30,000 SUV which may help me longer term than the Gel did."Take 5 shots of this for 5 days and it will reduce the inflammation."I am not sure if it did or not, maybe just sorta uploaded the inflammation into the personality center of my brain.Even my cats were, "Dang Purcilla! Mommies gone plumb loco! Better check the catnip!" Gidget said.
MS meds are not cheap, whether they are new or generics. Generic version of copaxone itself is $63,000. Congress members from both parties are silent on this issue. Pharma has a very effective lobby in DC.