Will German price controls hasten the era of personalized medicine?

An article in yesterday’s Wall Street Journal (German Curbs on Drug Costs Rile Big Brands) describes a German health commission’s review of drug efficacy. The objective is to determine which brand name drugs deserve a price premium over generics.

Results have been terrible for the branded companies. So far only two brand name drugs (the antibiotics Ketek and Avalox) have been deemed worthy. Many other brands, including the best selling drug in the world, Lipitor were deemed to be no better than generics. As a result the government is only willing to pay the same price for the branded products as for the generic drugs in the class. The pharmaceutical companies are furious, and understandably so.

The problem for the companies is that in general the commission may be right. The statin Lipitor may be no better overall than the generic statin, simvastatin. And the same will be true for many categories of treatment that have “me-too” drugs. But certain statins may be better for particular individuals, just as some people do better on Bextra than Celebrex and vice versa (see I’m Upset About the Bextra Withdrawal).

If the pharma companies lose their initial legal, lobbying and public relations battles, a fallback position may be to push to identify the patients who do better on their drugs, and build a case for charging substantially more for those patients. That would require stepped up efforts in pharmacogenomics and personalized medicine, which would benefit us all.


Welcome Grand Rounds readers! Please feel free to check out the rest of the Health business blog.

May 3, 2005

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