Setting A Cost Of Time That Patients May Gain From A New Therapy

Since quite some, an intense ongoing debate about setting a cost of time, often by a few months, that patients could possibly gain from a new therapy for complex diseases. The answer still remains elusive.  Meanwhile, newer therapies for treating cancer, such as, Kymriah, priced at US$ 475,000, alongside several rare diseases, hit the market with jaw-dropping prices. The latest being - Zolgensma of Novartis, carrying a price tag of US$ 2.12 million – the most expensive treatment ever. This trend assumes greater significance as Bio – claimed as the world’s largest trade association representing biotechnology companies, and related organizations, across the United States and in more than 30 other nations, also makes some interesting points in this area.

This article will dwell on the relevance of this important issue, both in today’s and also in the future perspective. It will try to explore, why pharma and biotech companies are not keen to use a ‘transparent multi-factorial life-value calculator’, especially for prolonging life or curing an incurable disease, with a high-priced novel therapy.

Emotional ads to justify the trend, against tough practical questions: 

A part of a sleek looking advertisement from Bio, depicting the power of new therapies to prolong life, carries a headline – ‘Time. The Currency of Life,” followed by three emotive lines and two equally emotive questions: “Another decade with a spouse. A few more years with your best friend. A rich, fuller life rather than one cut short. How do we place value on these?” It then asks: “What is more precious? What is more priceless?”

Turning this emotive question on its head to a rational one, an article published in the Stat News on February 25, 2016 questioned: “How much is an extra month of life worth?” It asked the drug makers to calculate the same. The same article also quoted a Yale University economist and practicing radiologist asking: “It’s all well and good to just say life is priceless, but the reality is we are paying for it.”

Emotive ads try to justify funding towards innovation for such drugs:

The same advertisement, as above, while trying to indirectly justify such exorbitant drug costs, used yet another emotive note in its playbook. It emphasized: “By continuing to fund the innovation pipeline that has served us so well, we will be able to reduce the costs associated with modern-day health care.”

Such claims are being scientifically challenged – head on, by many important studies. To illustrate this point, I shall quote the following two, both were published in the JAMA Network. The first one in the JAMA Otolaryngology-Head & Neck Surgery and the next one in JAMA Oncology.

The first article is the ‘John Conley Lecture’, carrying a title, ‘Unintended Consequences of Expensive Cancer Therapeutics—The Pursuit of Marginal Indications and a Me-Too Mentality That Stifles Innovation and Creativity,’ appeared on December 2014. On innovative drugs of such genre, the paper concluded: “The use of expensive therapies with marginal benefits for their approved indications and for unproven indications is contributing to the rising cost of cancer care. We believe that expensive therapies are stifling progress, by:

  • Encouraging enormous expenditures of time, money, and resources on marginal therapeutic indications and
  • Promoting a me-too mentality that is stifling innovation and creativity.

The second article is an ‘original investigation, titled ‘Assessment of Overall Survival, Quality of Life, and Safety Benefits Associated with New Cancer Medicines.’ It also underscored: ‘Although innovation in the oncology drug market has contributed to improvements in therapy, the magnitude and dimension of clinical benefits vary widely, and there may be reasons to doubt that claims of efficacy reflect real-world effectiveness exactly.’

Here again, the emotional appeal is being made by creating a ‘perfect World’ scenario. Whereas, scientific analysis of the innovative and high-priced drugs, reveals the reality for other stakeholders to take note of. Different pharma trade associations, although being a part of the same orchestrated effort, try differently to take the eyes off the humongous prices of new life-saving drugs. But many continue to believe that new cancer drug prices have long gone beyond control.

90 percent Biopharma companies do not earn a profit – A bizarre claim?

As is well-known, besides justifying high drug prices by highlighting ‘high R&D cost,’ drug manufacturers often say, as the Bio ad campaign makes an eyebrow raising claim – “Of the approximately 1,200 Biopharma companies in the United States, more than 90 percent do not earn a profit.”

Citing the example of the US market where drug prices are very high, it justifies, the general focus on list prices of the drugs is misplaced. This is because, the ‘manufacturers provide billions of dollars in rebates and discounts on their innovative therapies annually, to federal, state and private payors, in addition to offering direct assistance through patient assistance programs.’ It further added, these discounts vary but can result into a significant total of as much as 50 percent or greater depending on the program.

Experts have challenged even this claim that the list prices do matter, even in the US, for many, including uninsured population and those with co-payment arrangement, which are not based on the discounted prices. Leaving aside America, what happens in those countries, such as India, where out-of-pocket expenses on health care are considered the highest in the world?

With new cancer drug prices going beyond control, the price of postponing death is growing:

That the new cancer drug prices have long gone beyond control, isn’t a new realization. A research paper, published in the Journal of Clinical Oncology on May 06, 2013, also noted emphatically: ‘Allowing the producer-dominated market to set drug prices has spiraled the cost of cancer drugs out of control.’  So did another 2015 study, published in the Journal of Economic Perspective.

According to various studies, such as the one published in the JAMA Otolaryngology-Head & Neck Surgery, as quoted above, also found after studying over 70 of such new drugs that the median improvement in survival was around 2.1months. Some other reports indicated this number to be around 3.5 months on an average.

Interestingly, the 2015 study, published in the Journal of Economic Perspective found that ‘the price of postponing death is growing. In 2013, one extra year of life for cancer patients costs US$ 207,000, on average, nearly quadruple what it did in 1995.

Is it quality of life over the quantity of life, or vice versa?

The above findings may lead one to the critical question – what type of treatment choice would create the most desirable net impact on individual cancer patients? This evaluation should include all the three parameters – the extent of prolongation of the ‘Length of Life (LoL)’, the ‘Quality of Life (QoL)’ the patients experience during this period – and the additional drug cost that needs to be incurred.

It should ideally be up to patients whether they will choose quality over quantity of life or vice versa. To facilitate this process, an informed briefing by the doctor on the most likely scenario, vis-à-vis other available treatment alternatives, is expected to help individual cancer patient exercise the best affordable individual option.

This point was scientifically addressed in a research article - ‘Quality of life versus length of life considerations in cancer patients: A systematic literature review,’ published in the Journal of Psycho-Oncology on May 15, 2019. The study noted, ‘Patients with cancer face difficult decisions regarding treatment and also the possibility of trading the Quality of Life (QoL) for Length of Life (LoL).’ Little information is available on patients’ preferences in this regard, including ‘the personal costs they are prepared to exchange to extend their life.’

Another related question that also remains equally elusive, is the relationship between the cost of a medication and the amount of quality-time that it offers to patients. Quantifiable assessment of such nature could bring more transparency in drug pricing, especially for those that help treat life-threatening ailments, such as cancer.

Similar questions are raised on pricey therapy for rare diseases:

The cost of drugs for rare diseases is threatening the health care system – articulated an article, published in the Harvard Business Review (HBR) on April 07, 2017. The paper stated, in December 2016, US-FDA announced the market approval of nusinersen (sold as “Spinraza”), an effective Spinal Muscular Atrophy (SMA) treatment licensed to Biogen by Ionis Pharmaceuticals. SMA is considered the most common genetic cause of infant mortality.

As the author penned, “Patients and providers greeted the approval with near ecstasy, but the celebration was bittersweet. Five days after the FDA approved, the drug, Biogen announced each dose would cost US$ 125,000. Given that patients need six doses in the first year and three per year after that, it means the drug costs US$ 750,000 per patient in the first year and US$ 375,000 annually thereafter.”

A desperate father’s reaction for the price – and the economics behind it:

The HBR article captured the reaction of the father of an infant on this price, who is desperate to save the baby – in the following words – “Then there’s Will’s heartbreaking reaction, which I’m sure echoes the sentiments of many touched by SMA. – “The Biogen announcement of the cost of nusinersen floored me in every way possible,” he says. “Words cannot describe the sickening feeling I get when I think about it.” If this could be a father’s reaction in America, one can well imagine what happens in a similar situation to people in the developing world.

At that time, Zolgensma of Novartis, wearing a price tag of US$ 2.12 million for treatment of the same disease, was also shaping up for market launch. On this drug, the author of this HBR article who also happened to be a professor, vice chair of research, and chief of the Division of Neuromuscular Medicine at the University of Utah School of Medicine, wrote: “A very promising gene therapy for SMA is on the horizon, which would require only one dose and potentially render nusinersen obsolete. Did such mercenary economics influence Biogen’s pricing decision? We may never know; drug companies are not required to justify their prices.” On the contrary, as many believe, the concerned global CEOs, reportedly, get a hefty financial reward, for the same.

Conclusion:

It is not difficult to understand either, that some drugs, especially for rare diseases, will be used for treating a smaller number of patients. Hence, the optimal economies of scale in manufacturing can’t be attained. At the same time, the cost of R&D of the therapy needs to be recouped along with a reasonable profit, for investment towards future drugs. This is in addition to market exclusivity the drug will enjoy through patent thicket.

Nevertheless, despite the existence of several methods of a human life value calculation, such as in the insurance industry the use of a transparent and drug industry specific, multi-factorial live-value calculator is still not in vogue. As the drug industry often highlights, the ‘value of human life is priceless’ – regardless of the costs of drugs. In this situation, many industry experts, academics and patient groups advocate that the ongoing uncontrolled pricing mechanism for such medicines should be brought under a leash. This could come in the form of a tough price negotiation’ before the drug marketing approval, as was promised by the Government, or putting in place a stringent price regulatory system.

Be that as it may, the bottom line is to understand and find an answer to: ‘Why Does Medicine Cost So Much?’ This issue was analyzed by the Time Magazine in its April 09, 2019 edition. Quoting Dr. Aaron Kesselheim, an associate professor of medicine at Harvard Medical School, it emphasized: It all starts with the manufacturers. There are essentially no regulations governing how new drugs are priced – drug companies select a price what they “believe the market will bear.” Blockbuster first-in-class treatments, therefore, command a stratospheric price, like what happened with Gilead’s hepatitis medication – Sovaldi, way back in 2013. It was priced at US$ 1,000 a pill, or US $84,000 for the full course of treatment. From this perspective, although, setting a cost of time that patients may gain from a new therapy has a moral and ethical relevance – but actually, it doesn’t seem to be business-friendly in the drug industry.

By: Tapan J. Ray 

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.

‘Patent Pool’ – is GSK setting a new trend for the global pharmaceutical industry?

On February 13, 2009, The Guardian reported that Andrew Witty, CEO of GlaxoSmithKline (GSK) announced some significant changes to the way his company will operate in the developing countries of the world.

GSK, as Witty said, will:

• “Cut its prices for all drugs in the 50 least developed countries to no more than 25% of the levels in the UK and US – and less if possible – and make drugs more affordable in middle- income countries such as Brazil and India.

Put any chemicals or processes over which it has intellectual property rights that are relevant to finding drugs for neglected diseases into a “patent pool”, so they can be explored by other researchers.

• Reinvest 20% of any profits it makes in the least developed countries in hospitals, clinics and staff.

• Invite scientists from other companies, NGOs or governments to join the hunt for tropical disease treatments at its dedicated institute at Tres Cantos, Spain.”

Quoting Andrew Witty, The Guardian reported, “his stance may not win him friends in other drug companies, but he is inviting them to join him in an attempt to make a significant difference to the health of people in poor countries”.

We work like crazy to come up with the next great medicine, knowing that it’s likely to get used an awful lot in developed countries, but we could do something for developing countries. Are we working as hard on that? I want to be able to say yes we are, and that’s what this is all about – trying to make sure we are even-handed in terms of our efforts to find solutions not just for developed but for developing countries,” Witty envisioned.

I think the shareholders understand this and it’s my job to make sure I can explain it. I think we can. I think it’s absolutely the kind of thing large global companies need to be demonstrating, that they’ve got a more balanced view of the world than short-term returns,” he expressed Knowing full well that his comments will be considered as quite radical within the global pharmaceutical Industry.

The unorthodox young CEO of GSK continued, “I think it’s the first time anybody’s really come out and said we’re prepared to start talking to people about pooling our patents to try to facilitate innovation in areas where, so far, there hasn’t been much progress.”

Definition of ‘Patent Pool’:

The ‘Patent Pool’ is defined as, “an agreement between different owners, including companies, governments and academic bodies to make available patent rights on non-exclusive basis to manufacturers and distributor of drugs against payment of royalties”

Thus one of the often repeated key benefits of the ‘Patent Pool’, as considered by its proponent, is that the system enables the use of innovation against payment of royalties, without the risk of patent infringement.

The rationale for ‘Patent Pool’ system:

Many experts in this area feel that the conventional patent system does not really work for the diseases of the poor, all over the world. Though the concept of ‘Patent Pool’ is quite new in the global pharmaceutical industry, this system is being very successfully and widely practised within the Information Technology (IT) industry. ‘Patent Pool’ system, if effectively used, can also help the global pharmaceutical companies to improve their access to many more developing countries of the world.

GSK appears to have kick started the process:

Andrew witty of GSK is undoubtedly the first CEO of a global pharmaceutical company to announce a ‘Patent Pool’ system for research on 16 neglected tropical diseases like, tuberculosis, malaria, filariasis leprosy and leishmaniasis. GSK has, in a real sense, kick started the process by putting more than 500 granted pharmaceuticals patents and over 300 pending applications in the ‘Patent Pool’.

Key requirements for the ‘Patent Pool’:

Careful identification of various patents, which will be essential for the pool, will be one of the key requirements to initiate a ‘Patent Pool’ system. It makes the need to obtain individual patents, required in the process of a drug discovery, less important.

Key issues with the ‘Patent Pool’ concept:

It has been reported, from a WHO conference held in April, 2006 ‘Innovation Strategy Today’ worked out that the start-up costs of a ‘Patent Pool’ for vaccines will be economically viable only if more than 25 participants holding relevant patents join the initiative.

Moreover, various types of litigations, related to patents, which we are currently witnessing within the global pharmaceutical industry, could also be impediment in getting more patents in the pool.

Conclusion:

The initiative to create a ‘Patent Pool’ system in the global pharmaceutical industry, especially for the diseases of the poor, as enunciated by the CEO of GSK, is indeed a path breaking one. Such initiatives are likely to have very positive contribution in solving the problem of access to affordable medicines, especially in the developing world.

In fact, the Council of Science and Industrial Research of the Government of India, lead by its Director General, Dr. Samir Brahmachari has already undertaken similar initiatives in the country where global experts including academia are actively participating.

Though ‘Patent Pool’ is still an untested model in the global pharmaceutical industry, the recent announcement of GSK towards this direction does appear to offer a realistic and practical approach to address the critical global issue of improving ‘access to affordable innovative modern medicines’ to a vast majority of population in the developing countries of the world.

By Tapan Ray

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.