To stay a Wall Street darling, Pharma is rolling with new, uber priced drugs notably hepatitis C drugs that cost $1000 a pill. Gilead Sciences sold $12.4 billion worth of its hepatitis C drug, Sovaldi, at that price last year, reports the New York Times " straining the budgets of insurance companies and Medicaid programs."
While drug company representatives initially tried to cast the outrageous prices as recouping their research and development costs they quickly back pedaled into admitting the drugs are priced on "value"--what they are "worth" for the patient's health. Needless to say such valuations come pretty close to the definition of extortion--or offers you "can't refuse."
Even business writers cry foul. Why does the same hepatitis C drug that costs $84,000 a year in the US cost $900 a year in Egypt asked Forbes staff writer Avik Roy. Since most hepatitis C patients in the US are uninsured, underinsured or imprisoned, taxpayers pick up the bill through Medicaid, the VA and prison systems writes Roy.
To combat investor disenchantment, drug companies are also rolling out expensive drugs that treat such rare conditions, they almost sound like a joke. If you are sleepy during the day, you may have narcolepsy says Jazz Pharmaceuticals which its drug Xyrem treats for $35,000 per year. Coffee might be cheaper.
If you have frequent diarrhea, gas and bloating, you may have exocrine pancreatic insufficiency says AbbVie to sell the drug Creon.
Your back pain may not be from working out at all but from a disease called ankylosing spondylitis, AbbVie now advertises, a condition that can be treated with its biologic drug Humira for as much as $20,000 a year.
Injectable "biologic" drugs like Humira are a new drug industry push because they are so expensive and less susceptible to generic competition than pills. Amgen's injectable bone drug Prolia at $1650 a year made $884 million in the US and $1.4 billion worldwide between 2011 and 2013 despite the drug maker's admission of its links to risks like "hypocalcemia, serious infections, suppression of bone turnover, including osteonecrosis of the jaw" as well as "atypical femoral fracture" and "dermatologic adverse events." Ka-ching.
Now Sanofi and Regeneron Pharmaceuticals are rolling out a cholesterol lowering drug which could be embraced by the millions who made the statin Lipitor the best selling drug in the world before it went off patent. Yet the list price of Praluent, an injectable biologic, is over $14,600 a year. Like Gilead, Sanofi and Regeneron say the price reflects what it is worth in potential benefits to patients and savings to the health care system--e.g. what they can get.
Nor is cost the only question with the new cholesterol drug. Increasingly, high bad cholesterol is viewed as a weak cardiovascular risk factor versus other factors like inflammation. Cholesterol lowering drugs can also be used to duck important lifestyle changes. "Plenty of adults down statins regularly and shine off healthy eating because they know a cheeseburger and steak can't fool a statin," writes Dr. Michael J. Breus on the Huffington Post.
The good news is lawmakers are not falling for Pharma profiteering and they are demanding cost breakdowns from drug companies for the new drugs. How much are true costs and what is profiteering? Some states are drafting bills that would let insurers refuse to pay for a drug if its maker does not file cost breakdowns.
What is the response of Big Pharma to such bills addressing expensive drugs? They would be costly to comply with, it says.