The American pharmaceutical industry has been getting hit with bad publicity over sky-high drug prices almost daily for the last few weeks. Another blow is coming. An academic study will be presented at an upcoming European cancer meeting that says that drug companies are charging up to 600 times what certain cancer drugs cost to make.
The United States pays more than twice as much as countries in Europe for drugs in a class of cancer medications known as tyrosine kinase inhibitors (TKIs), eight of which are approved by the Food and Drug Administration. TKIs are effective and have fewer side effects than other cancer therapies. This finding is from a study by Andrew Hill of the University of Liverpool in England. He will present his findings this week at the European Cancer Congress in Vienna.
Using data on the cost of the ingredients of these drugs that he obtained from the Indian government data on the cost of pharmaceutical ingredients and allowing for a 50% profit margin, Hill came up with the costs of producing certain drugs. He did not add in any costs for researching the drugs, however.
On this basis, Hill found that the leukemia drug Gleevec (sold in some countries under the brand name of Glivec) actually costs $159 for a year's treatment, compared to the $106,000 price in the United States. Tarceva for lung cancer costs $236, compared to a U.S. price of $79,000. Tykerb costs $4,000 against a U.S. price of $74,000.
These costs are far above those charged in western European, where Gleevec costs between $29,000 and 35,000, Tarceva costs between $26,000 and 29,000, and Tykerb costs around $35,000, Hill reported.
Drug makers say that they must make decent profits in order to pay for the billions of dollars needed for drug research. Some companies have said that the price of a drug is determined by many factors beyond manufacturing costs, including the value to patients and healthcare systems.
However, these high prices are leading to a stronger resistance from healthcare providers, patients, doctors, and politicians. Democratic presidential candidate Hillary Clinton announced that one of her goals was to lower the cost of prescription drugs. That announcement triggered a sell-off in drug stocks.
This issue is not one affecting just cancer drugs. The high price of drugs used to treat hepatitis C and high cholesterol levels have been publicly questioned recently. And there has been serious backlash at companies that buy an older drug and suddenly raise the price astronomically.
The study by Hill was reported by Reuters Health.
