Pfizer and Incyte drugs shamed in pricing study

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A ‘global revolution’ must occur in new cancer drug pricing if the world is to cope with the growing instances of the disease.

That is the stark finding of a study published on Tuesday in the journal Nature Reviews.

“It is very clear that pharmaceutical companies charge far too much, often blaming their shareholders for pressure to maximize profits”

 

The paper, titled Sustainability and affordability of cancer drugs: a novel pricing model, is written by Professor Carin Uyl-de Groot and Professor Bob Lowenberg from Erasmus University Rotterdam in the Netherlands, and proposes an algorithm that should be used to determine innovative drug prices with ‘a maximum level of transparency’.

This algorithm takes into account the actual costs of R&D, manufacturing, sales, marketing and a fair profit margin based on the clinical benefit to arrive at a reasonable price for each drug.

For example, a price of $3,094 is recommended for each treatment of Xtandi (enzalutamide), a prostate cancer drug from Japan’s Astellas (TSE:4503) and US pharma giant Pfizer (NYSE:PFE). This product is priced at $88,704 in the USA, more than 28 times the recommended price, and at $36,288 in the UK.

Meanwhile, for Incyte Corp’s (Nasdaq: INCY) more specialist myelofibrosis drug Jakafi (ruxolitinib), the algorithm finds that the fair price would be $17,251 per treatment. The US price in this instance is $90,000, while in the UK it is currently $59,760.

Governments are ‘letting it happen’

Professor Uyl-de Groot says: “Looking at these figures, it is very clear that pharmaceutical companies charge far too much, often blaming their shareholders for pressure to maximize profits.

“And many governments, despite some making efforts to change the status quo, are letting it happen. We understand the need to make a profit – but this can be achieved by making the drugs they produce more widely affordable.

“Using the algorithm, we now know what the correct price for these drugs is – the missing link is legislation. Governments should be facilitated to adopt the model via new European Union legislation, with the same going for the US market. For that reason, I aim to start a petition to really put the pressure on those able to make a difference.”

Free market model ‘not suitable’

Professor Uyl-de Groot adds: “It is abundantly clear that the existing free-market model is not suitable for innovative cancer drugs – and is in fact detrimental to cancer patients globally.

“With a 68% increase in cancer incidence forecasted by 2030, a revolution in new cancer drug prices is needed.”

Source: www.thepharmaletter.com


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