Costly Biologic Drugs
Some examples that the Times cites include Avonex for multiple sclerosis, which is produced by Biogen Idec for roughly $20,000. Then there is Avastin, a drug for cancer, which is produced by Genentech can cost more than $50,000. Don’t forget the numerous Genzyme drugs for rare diseases that can cost $200,000 a year or more.
Why are these drugs so expensive? The reason is that current law prohibits other companies from produce these drugs. The companies are allowed to sell the drug at higher prices in order to cover the cost of research and development and manufacturing. Companies have 12-14 years from the time that the Food & Drug Administration (FDA) approves the drug to recoup and profit from their investment before a generic drug can be created and sold by competition.
The drug companies argue that fewer investors will want to invest in this market, which will slow down the overall scientific research into medicine. However, this argument makes a large assumption that may not be correct. It assumes that investors want to profit from the discovery and manufacturing of these drugs. Perhaps the investors provide financial backing in order to find and provide a general “cure” for a medical condition.
For example, lets say Michael J. Fox (actor) and Sergey Brin (Google Founder) provides financial backing for research into Parkinson’s Disease. They have both expressed interest in finding a cure and making it available to everyone. They are not interested in profiting from the drug.
It would be interesting to know how many of the private financial backers are truly in it for the money. And how many are providing funds to find a cure because either they or someone they know had a health problem?
According to the times,
In Europe, which has approved biosimilar versions of three biologic drugs, companies generally price their biosimilar drugs about 20 to 30 percent lower than the originals. The impact in Europe has been limited so far, but in Germany the biosimilars have captured about 30 percent of the market for anemia drugs and forced the brand-name manufacturers to lower their prices.
So the issue is being raised in Congress with the new Health Care Reform Proposal. According to the NY Times article, “seven years would be a ‘generous compromise.'” It will be interesting to see where this issue heads, as it appears that both the Senate and House are in favor of supporting the industry and against the generic competition.
Read the original article