Posted by on Nov 28, 2016 in Blog | 8 comments

Share
Email

At a founder’s day speech of the Medical College of Virginia on Dec 1, 1950, George W. Merck, President and Chairman Merck & Co., Inc. ( 1925- 1957) stated,

“We try to remember that medicine is for the patient. We try never to forget that medicine is for the people. It is not for the profits. The profits follow, and if we have remembered that, they have never failed to appear. The better we have remembered it, the larger they have been.”

 

Is it appropriate that “commodities like health care that involve sickness, suffering, and death” be priced based on the “market forces”?  This is a question that two oncologists raised in April 2015.  The question can be expanded to ask if it is appropriate that supplies of said commodities be based on the “market forces?”

In their article, Drs. Kagop Kantarjia and Vincent Rajkumar did something rather amazing:  they questioned the pharmaceutical industries’ claims for high cancer drug prices.   In the process, they pointed out how, in 2003, the pharmaceutical companies lobbied for and got a situation where Medicare would not be allowed to negotiate drug prices.  Additionally, they  refute the claims pharmaceutical companies make of the high costs of research and development –85% of cancer research is funded by taxes through grants from the federal government.

Pricing

Of course, the problem is not only in cancer medications.  Here are a few examples from the news.

  •  In a study published in JAMA, the cost of insulin (see What is Insulin?) increased from $4.34 per ml to $12.92 per ml or 197% from 2002 to 2013.  According to the authors, “The estimated expenditure per patient for insulin in the United States in 2013 was greater than all other anti-hyperglycemic medications combined.”

Epinephrine costs about $1. It saves lives of people who are having acute, life-threatening allergic reactions.  People use the EpiPen because there is less likelihood of making a mistake with dosage and dosing (too much epinephrine can kill and if the epinephrine goes into a blood vessel, it is deadly.)

As Kantarjia and Rajkumar state  “Americans with cancer still pay 50% to 100% more for the same patented drug than patients in other countries despite the fact that much of the research is subsidized by their tax dollars.”

Not only are there price hikes but there are also shortages.

Shortages

The 2014 Government Accounting Office (GAO) report summary states

“Although reports of new drug shortages declined in 2012, the total number of shortages active during a given year—including both new shortages reported and ongoing shortages that began in a prior year—has increased since 2007. Many shortages are of generic sterile injectable drugs. Provider association representatives reported that drug shortages may force providers to ration care or rely on less effective drugs.”

There were 1,798 drug shortages between January 2001 and March 2014.  When researchers reviewed the medications, they found that one third of the drug shortages were used in emergency medicine.  The found that over half were medications used in life-saving or critical situations and there was no substitute medication available for 10% of those.

What are the reasons for shortages?

According to an infographic by the FDA, there are a number of reasons for shortages.  In a pie chart, manufacturing issues related to quality is the number one reason (37%) followed by issues with the materials it takes to make the medication (27%) and issues with delays or the manufacturer’s capacity (27%).  The other reasons are in the single digits:  increased demand (5%), loss of a manufacturing site (2%) and discontinuation of the medication (2%).

Examples of these reasons can be found in two products that treat heart related conditions: heparin, a blood thinner that treats blood clots; and nitroglycerin, a medication that relaxes blood vessels, widening them to get move blood more easily through the body.  Quality was the issue with heparin according to an American Heart Association document.  Heparin is made from the intestinal lining of hogs.  For many years, US drug makers bought 75% of this raw ingredient from other countries, mostly (60%) from China. In the year and five months between January 2007 and May 2008, 149 people worldwide died after taking heparin.  There was an investigation and the FDA discovered that it was “intentionally adulterated with OSCS to reduce production costs” and also that the farms and slaughter houses outside of the US and Europe were not regulated.

In the case of IV nitroglycerin, several problems have occurred recently to interfere with the supply.  In 2013, two companies discontinued making the product, one for “unspecified manufacturing delays” and the other because of required “manufacturing upgrades.”  This  put pressure on a third company, Baxter Healthcare, to deal with the demand.  Issues around containers and a lack of raw products caused a distribution stoppage by Baxter.  Now another company in Germany (that is FDA approved) is supplying another formulation of IV nitroglycerin.

Some Action

In 2011, Obama issued an executive order and in 2012 Congress pass the Food and Drug Administration Safety and Innovation Act. This legislation required pharma to notify the FDA at least 6 months in advance of any shortage issues.  According to a study in Health Affairs, the legislation has helped but shortages are longer and more frequent for drugs that are primarily used in acute settings, like hospitals.   In an interview after publication, one of the authors of this research pointed out that shortages might be caused by financial considerations.  For example, if a company has a manufacturing problem, that problem may not be fixed, but instead more assets will be used to produce medications that ensure greater profit.

One of the findings of the GAO’s analysis of FDA data confirms this authors opinion.  In the case of generic sterile injectables, which have had continuing shortages,  the GAO  “identified potential underlying causes specific to the economics of the generic sterile injectable drug market, such as that low profit margins,, have limited infrastructure investments or led some manufacturers to exit the market.”  The GAO also noted that a “frequent cause” of shortages had to do with quality.

The Bottom Line

As the header above implies, patients’ access to life-saving medications appears to be at the whim of the bottom line.  The question that the US needs to address is, should the free market make the decisions about whether or not there are medications available to all our citizens?  Or, to rephrase it more starkly, is making money more important than the life of a child, a mother, a father, a sister or brother?  Is it more important, particularly in light of the amount of federal dollars that supports pharmaceutical research?

 

 

Share
Email