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Pharmaceutical companies are in the business
of making money from people's sickness.
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The following
are past
postings from AIDSACT
>we just feel that in the time of plague, drug cos. should
>make a REASONABLE profit, rather than continuing their
>normal practice of charging ..... profit margins that are 4 to 5 times
>that of the most profitable non-drug industries.Mark Milano
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While I agree that Mark's statements are cogent and to the point, I'd like to point out one common misconception. Regarding the development of Foscarnet, and as one who worked on the pricing of Foscarnet extensively as a member of T&D, Foscarnet was not developed with "almost entirely" taxpayer money.
According to the Summary of Approval with FDA, the Antiviral Advisory Committee of the FDA considered 5 studies in the NDA. Of those 5, only one, the study conducted by the NEI in cooperation with the NIAID was partially funded by the U.S. government (Palestine et al, Annals of Intern Med). And that was a very small, peripheral retinitis study with less than 30 patients.
That said, I don't think it in any way detracts from Mark's comments on the extraodinary price that Astra introduced Foscarnet with, and continues to charge today.
And his comments as to the profitiability of the industry in general, and their pricing practices in particular, are right on target.
Kevin Frost
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The cost of producing ddC is practically nothing. One kilogram of ddC will supply more than a thousand people for a year; and as far as I know, the chemical is not especially difficult to manufacture. It has been available in bulk from chemical supply catalogs for many years--which is how buyers' clubs obtained and sold it in the U.S. before it was approved anywhere.
Pharmaceutical-grade production adds to the expense, but this difference is probably not enough to have any significant impact on the economics of distribution or treatment. (An extra thousand dollars per kilo means only one dollar per year extra treatment cost per patient; and impurities are less likely to be a problem when a drug is given in such tiny amounts.)
Of course ddC is seldom used today, because of the difficulty of finding a therapeutic window between an effective dose and the serious side effect of neuropathy, which is not always reversible by stopping the drug. Nevertheless, ddC does work well for some patients (probably a small minority), who apparently do have enough therapeutic window because of their individual metabolism.
What is needed is to take ddC as a "lead compound," research its antiviral action and its side effects, and find or synthesize related chemicals which have larger therapeutic windows. This approach would get around the Roche patent, because the result would be a different molecule. If the right people were contracted to do the work, the chemistry, animal toxicity tests, and small phase I/II viral load tests in people would not be terribly expensive--well under a million dollars per new drug candidate I would think, even at U.S. or European research prices--although of course there is no way to guarantee when or if any useful drug will be found.
If we also want FDA approval for the U.S., then we must also go through an enormously inefficient research and development system with many palms to be greased. Many people around the world might choose to accept less than that, in view of the lack of alternatives available to them.
What we could do as a community is to bring proposals together, saving money by using top quality but lower cost researchers and institutions, in developing countries when possible--and find wealthy donors willing to finance projects for human benefit with no proprietary restrictions.
John S. James
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>No one wants to take away the profit motive,
>we just feel that in the time of plague, drug cos. should
>make a REASONABLE profit,
What is a reasonable profit to some is unreasonable to others. I'm not going to defend the pharmas across the board. While their profitability is not the 4-5 times you said, it is ONLY 2-3 times the industry average and clearly the most profitable major industrial sector in the economy. Them boys ain't hurtin.
But I do have to argue that so much of what they do is secret that it is nearly impossible to determine what is profit--reasonable or otherwise--on a particular drug. All we have to do is look at our "friends" in the entertainment industry, where even blockbuster movies seldom make a "profit," to know that there are lots of games accountants can play. The Oxandrin example you cite is one of the few clear examples of price gouging because we have a before and after snapshot. Drawing and quartering would be too kind for that CEO.
I would also disagree with you on the cost of research. From what I've seen at NIH and in other sectors, the cost of research is going up much faster than the general cost of living. But then, when marketing takes up 15-30 percent of budget for the pharmas, profits 20+ percent, there is a lot of room for reducing drug prices and still not going bankrupt.
Bob Roehr
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>What is a reasonable profit to some is
unreasonable to others. I'm not going
>to defend the pharmas across the board. While their profitability
is not the
>4-5 times you said, it is ONLY 2-3 times the industry average
and clearly the
>most profitable major industrial sector in the economy. Them
boys ain't hurtin.
If Mr. Roehr is not currently a PR rep for a drugco, he should apply soon. Our research of a couple of years ago showed the following % annual profits based on net income/sales. These figures came from each company's annual report.
AT&T 2%
Texaco 3%
Chrysler 3%
General Motors 2.5%Merck 22%
Abbott 16%
Roche 18%
Glaxo 23%
These number ARE 4-5 times higher than non-drug industries, and even more. The drugcos have NO justification for their profits other than that they are able to charge whatever they choose, since people have no choice but to take their drugs. Despicable.
Mark Milano
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> These number ARE 4-5 times higher than
non-drug industries, and
> even more. The drugcos have NO justification for their profits
> other than that they are able to charge whatever they choose,
> since people have no choice but to take their drugs.
There is no reasonable doubt about it. Besides the fact: AIDS vaccines are neglected, to give priority to medicines that do not cure but create a lifetime-dependent income.
Carlos
MAKING TOP DOLLARS The New York Times April 13, 2004
Many prescription drugs sold in the United States are priced much higher than in most other industrial countries.
How much companies receive for one-month supplies of each drug
DRUG Daily dosage Treatment MAKER
Laboratories
Squibb
U.S. (CVS*) U.S.
(Drugstore.com)Canada Denmark Netherlands Britain New Zealand
*Retail price from a store in Washington. N/A = not available
Sources: Essential Inventions; Drugstore.com; Euromedicines.org
_
This goes on . . .
Developing world (14 June 2003)
Public health and company wealth
by Nathan Ford, access to medicines adviser (Médecins Sans Frontières, London EC1N 8QX nathan.ford@london.msf.org )
"The doctor's role goes from caregiver to undertaker. You talk to them about the cheapest method of burial. Telling them about the drugs is always kind of a cruel joke," said Dr Chris Ouma of Kenya, where 2.5 million people are infected with HIV, and most cannot afford AIDS drugs
Introduction
Millions of people in the developing world are dying because they
cannot access the medicines they need. This made international
headlines during the World Trade Organisation's meeting in Seattle
in December 1999.1 The high price of AIDS drugs became a banner of
the world's iniquities: on one side of the globe, Western multinationals
made billions of dollars; on the other side, millions of people
suffered and died of treatable infectious diseases.
For decades the pharmaceutical industry was the Golden Boy of Wall Street. By the end of the 1990s it began to acquire a new reputation, featuring as the villain of spy novels (like John Le Carre's The Constant Gardener2) and Hollywood blockbusters (like Mission Impossible II). The industry has responded to growing public criticism by reducing some drug prices for some countries. From company boardrooms, it might seem that many sacrifices have been made. But few patients in developing countries are aware of these efforts. Progress in reducing drug prices has depended mostly on market competition (which the industry, through lobbying on global trade rules, is trying to squash) and media attention (which is fickle and exhaustible).
Drug prices down, but not nearly enough
Three years ago AIDS treatment cost $15 000 a year whether you
lived in London or Lusaka. Today, some pharmaceutical companies
provide discounts for sub-Saharan Africa. This is clearly good,
but companies are not doing all they can. At the beginning of
2003, while one company was claiming that "the pace is picking
up" in providing antiretrovirals to poor countries,3
another was charging $2000 a year more for its AIDS drug in Guatemala
than in Switzerland.4
The responsibility to ensure access to essential medicines lies with governments. In 1996, the Brazilian government began to provide AIDS treatment for all in need by making their own version of expensive brand drugs, reducing costs by around 80%. Over 115 000 people in Brazil now receive antiretroviral treatment.5
But few have been able to follow Brazil's example: only 5% of the six million people in the developing world who need antiretroviral drugs are receiving them. The problem extends well beyond AIDS: access to treatment is denied for many people who have diseases such as leukaemia, pneumonia, and diabetes, because brand medicines are too expensive. In many cases generic drugs are much cheaper.6 Although the right of governments to override patents whenever needed was affirmed at the World Trade Organisation's November 2001 meeting, few developing countries have the manufacturing capacity to make their own medicines, so they depend on exports from countries like Brazil and India that produce quality, affordable generics.
Summary points
Most medicines are developed in the West, for use in the West, and priced accordingly
This seriously undermines the doctor-patient partnership in the developing world, where many medicines are too expensive, others are old and ineffective, and some diseases are completely untreatable because no medicines have been developed
The pharmaceutical industry's efforts to date are insufficient
Governments worldwide must make greater efforts to ensure the development of and equitable access to medicines
Essential goods as luxury products
Medicines are big business. The pharmaceutical industry is among
the most profitable in the world, with profits nearly four times
the average. Because market prospects, not health needs, drive
production lines, drugs are developed for Western diseases while
diseases of the developing world are ignored. Lack of profits
dictated that eflornithine, a lifesaving drug needed by hundreds
of thousands of people with sleeping sickness in Africa, was withdrawn
from production in the 1990s; this left doctors with a 50 year
old, arsenic based drug-which is becoming increasingly ineffective
and whose side effects kill 1 in 20 patients. (Eflornithine production
was later restarted, but long term production is not guaranteed.)7
In many clinics throughout the developing world doctors are forced to use old drugs that are toxic and don't work well. For some diseases, no medicine is available at all. Buruli ulcer, a disfiguring and debilitating infectious disease, is a good candidate for antibiotic treatment, but because no drugs have been developed the only option is surgery, including amputation. Industry can be relied on for another half a dozen impotence drugs, but the next generation of tropical medicines is nobody's business-only 1% of medicines developed in the past 25 years are for tropical diseases.8
Better business behaviour
A group of major UK investors recently published a report urging
drug companies to improve poor people's access to medicines.9
The report proposed a framework of good practice to audit companies'
behaviour on issues like anti-monopoly enforcement, fair pricing,
and unfair use of political influence.
The response of the Association of the British Pharmaceutical Industry to the concerned share-holders was: "The problem is not the attitude or commitment of the pharmaceutical industry. It is one of poverty, lack of infrastructure, and lack of political will."10 Everyone's fault, in other words, but not the industry's. And yet the drugs industry can do much to contribute by reducing prices systematically for poor countries and directing some of its enormous drug development capabilities to neglected health needs.
Ensuring social responsibility from industry in the long term depends on socially responsible government policies. An international convention should be developed to ensure that new medicines are developed according to global health needs, and equitable drug pricing should be ensured through a mandatory framework. However, such policies are unlikely to be forthcoming while the pharmaceutical industry continues to influence government to the extent it currently does.11
The director
of the International Pharmaceutical Manufacturers Federation recently
said: "For people with no income or little income, price
is a barrier. I mean I can't afford certainly a car of my dreams,
you know, which might be a Jaguar XJE."12
But medicines are not the same as sports cars, and patients are
not consumers: they cannot choose between AIDS and leukaemia,
and few can move from Guatemala to Switzerland. Over 90% of the
world's medicines are produced in Western countries by companies
that develop drugs according to profit prospects, not health needs..
This needs to change. While medicines are treated like luxury
consumer products, millions in poor countries will continue to
go without the lifesaving medicines they need, and doctors will
continue to play the part of undertaker, advising on funeral costs
because it is the only option available. 13
------------------------------------------------------------------------ [animated photo from ACT UP Pharmco Demonstrations]
1. Sleep less in Seattle.
Lancet 1999;354; 9194.
2. Le Carré J. The constant gardener. London: Hodder
and Stoughton, 2001.
3. Hirschler B. Aids drugmakers say they're boosting Africa supply.
Reuters, 14 January 2003. www.accessmed-msf.org/prod/publications.asp?scntid=2912003151267&contenttype=PARA
& (accessed
29 May 2003).
4. Roche cuts price of AIDS drug to nations. Associated Press,
13 February 2003. www.accessmed-msf.org/prod/publications.asp?scntid=1722003113423&contenttype=PARA
& (accessed
29 May 2003).
5. Galvão J. Access to antiretroviral drugs in Brazil.
Lancet 2002;360: 1862-6.[CrossRef][ISI][Medline]
6. World Health Organisation/Health Action International. Medicines
prices. WHO/HAI, Geneva, May 2003. www.haiweb.org/medicineprices (accessed 29 May 2003).
7. McNeil D Jr. Profits on cosmetic save a cure for sleeping sickness.
New York Times 2001 February 9.
8. Trouiller P, Olliaro P, Torreele E, Orbinski J, Laing R, Ford
N, Drug development for neglected diseases: a deficient market
and a public-health policy failure. Lancet 2002;359: 2188-94.[CrossRef][ISI][Medline]
9. Dyer G. Investors warn drugs industry of backlash over health
crises. Financial Times 2003 March 24.
10. Curl A. Patents are no bar to healthcare for the poor. Financial
Times 2003 March 28.
11. Abrahams J. The pharmaceutical industry as political player.
Lancet 2002;360: 1498-502.[CrossRef][ISI][Medline]
12. Saving grace: defeating Aids needs a global approach. Guardian
2003 February 18. www.guardian.co.uk/leaders/story/0,3604,897761,00.html (accessed 28 May 2003).
13. Vick K. African AIDS victims losers of a drug war. US policy
keeps prices prohibitive. Washington Post 1999 December
4.
PDF of this article website: http://bmj.com/cgi/content/full/326/7402/1296?eaf#REF1
see also:
HIGH DRUG PRICES LINKED TO ADVERTISING, PROFITS, AND
ENORMOUS EXECUTIVE SALARIES_
.Price variations of HIV medications _
Presented @ Durban South African AIDS Conference, 11 July 2000
Pharmaceutical Company Profits and Salaries Listing _
by Richard Laing, Department of International Health, School of Public Health, Boston University
Presented @ Durban South African AIDS Conference, 11 July 2000and selling the Brooklyn Bridge >>>
Makers of AIDS Drugs Agree to Slash Prices in Third World _
May 11, 2000_
Past Drug Pricing Principles:CONSENSUS STATEMENT ON LONG TERM EFFECTIVENESS RESEARCH
TAG statement to NIAID Council on June 15-16, 2000 -Consensus Statement Impending Drug Pricing Actions
JUNE 2000__Pending Abbott ActionsConsensus Statement on Drug Pricing
C O M M U N I T Y -A L E R T -- D R U G -P R I C I N G _
September 9, 1998Lower the Costs of Pharmaceuticals
DEMAND PHARMACEUTICAL COMPANIES LOWER COSTS >
see also [off-site] The Truth About the Drug Companies
