Ten pharma policy topics in just one article!
Kaiser Health News is a non-profit news service that does a great job of exploring healthcare policy topics. Still I was impressed that one article (How a drugmaker turned the abortion pill into a rare-disease profit machine) managed to directly and indirectly raise at least 10 important policy topics.Here's my count:
- Abortion: A drug on the market to induce abortion appears to be highly effective against Cushing's syndrome, a condition that can be fatal. Due to mifepristone's association with abortion, there are tight restrictions on its use and it's less likely to be prescribed off-label or developed for other conditions.
- Orphan drugs: Because Cushing's only affects about 10,000 people in the US, treatments are eligible for orphan drug status, which provides seven-year market exclusivity for the manufacturer and therefore a chance to make an attractive profit. The orphan drug law can also be abused by jacking up prices on low-cost products.
- Drug price levels: The price for Korlym (as the Cushing version of the drug is known) is about $550, compared with $80 for the abortion drug. And the abortion drug is only needed once, whereas the Cushing drug might be needed up to 3x/day forever. The manufacturing cost is presumably close to zero.
- Drug price increases: Korlym came on the market at about $220 per pill, but the manufacturer has boosted the price substantially every year, with no end in site. Meanwhile the price of the abortion pill has stayed the same or dropped.
- Pharmacy benefit management: The article duly notes that the prices quoted are "before any discounts or rebates." Pharmacy benefit managers (PBMs) negotiate discounts and rebates. Depending on what's happening behind the scenes, it's possible that the big boosts in list price have not been matched by an equal run-up in actual price realization by the manufacturer, and it's likely that there are significant differences from one PBM to the next. Meanwhile the PBMs may be benefiting from higher prices, which could boost their own revenues from rebates and other incentives and fees.
- Funding of drug development: Corcept Therapeutics, which developed Korlym, is developing a variety of other drugs, which may help more people with Cushing's or treat aggressive forms of cancer --or may fail completely and help no one. One way the company rationalizes the high price of Korlym is as a source of funding for new drug development. But is there a reason Cushing patients and their insurers should be the source of such funding? Would the company charge less if it didn't have other drugs in development?
- The role of generic drugs: Teva has filed a patent for a generic version of the drug, now that the exclusivity period is coming to an end. That could lower prices for those paying the bill and dent Corcept's profits and stock price.
- How pharma tries to block generics from coming to market: Generic companies need to compare their product with the branded product to get it approved. But the branded company can sometimes interfere with that. Corcept's CEO implies in the article that Teva may have obtained Korlym for testing through nefarious means. Corcept's CEO says Teva won't have an impact on Korlym soon because the issued will be tied up in court for years.
- Conflict of interest: The original idea for Corcept was to develop mifepristone for major depression. But a co-founder left the company in 2007 after Congress investigated his conflict of interest.
- Patient advocacy: Corcept is a funder of a patient advocacy group for Cushing's. These groups can be useful for patients and their families as advocates for treatment and reimbursement and for raising awareness and educating people. Of course the drug manufacturers have an interest in how it goes.
Every one of these topics merits extensive discussion --or at least a blog post of its own. Thanks to Kaiser Health News for bringing all these issues to the surface.
By healthcare business consultant David E. Williams, president of Health Business Group.