Yesterday I provided you with a link to a Wall Street Journal article about the high cost of thalidomide,
How Drug’s Rebirth as Treatment For Cancer Fueled Price Rises: Once-Demonized Thalidomide Boosts Celgene’s Sales; Patients See Costs Soar, by Geeta Anand.
Anyone notice when this article was written? November 15, 2004!
Six years ago patients were already having trouble affording their oral cancer medications. Geeta’s article used a tried and true journalistic technique by documenting the fast, steady price increase of thalidomide. Now called Thalomid, Geeta explored the calculated reasoning of Celgene officials used to justify double digit yearly price increases of a drug which only costs pennies to produce.
A foreshadowing of things to come, her article only mentions Revlimid once. But read these quotes from company officials and financially strapped patients–it sounds like the story was written yesterday
Mr. Jackson (Former Celgene CEO) argues the high prices don’t hurt patients. “Either people are wealthy enough to pay or health insurance pays or our company gives the medicine away for free,” he says.
Really? Here is what one patient said at the time:
Mary Lou Wright, a retired insurance agent in Harrisonburg, Va., says she has paid a portion of the cost of thalidomide under her insurance plan, although she has enough income to make the expense manageable. Until Ms. Wright went off the drug recently, she paid $289 a month for her prescription of 50 milligrams a day. “The price of the drug is outrageous,” says Dr. Comenzo, the Sloan-Kettering oncologist who treats Ms. Wright
The high cost of Thalomid and even higher cost of Revlimid were questioned at a multiple myeloma for patients and health care professionals I attended in Minnesota three years ago, and I have been fascinated by the subject ever since. A representative from Celgene, as well as the main speaker, multiple myeloma expert Dr. Morie Gertz from Mayo Clinic, both defended Celgene’s pricing policy.
The subject was emotionally introduced in the morning session by a multiple myeloma patient who was having difficulty paying for his Revlimid. I will never forget how surprised I was by Dr. Gertz’ steadfast defense of Celgene. Dr. Gertz spent ten minutes explaining how expensive (over one million dollars) it was to sponsor a phased drug study in this country. According to Dr. Gertz, it may take as much as ten million dollars to get a drug to the point where it might be accepted by the FDA. Since only a few of many experimental drugs are ever approved, Dr. Gertz reasoned the high costs were justified–without them, new anti-cancer/myeloma drugs would never make it to market.
Listening carefully, I felt Dr. Gertz made a good point. True, Dr. Gertz was working with Celgene on several research studies. But potential conflict of interest aside, I could tell he really believed what he was saying.
During a discussion in my myeloma support group the next month, our speaker, a Celgene rep, expanded on Dr. Gertz’ point: “Most of these drug companies lose money.” she said. “One successful drug helps pay for all of those that don’t work–plus helps fund ongoing research for drugs.”
These points are supported by, of all things, the first part of Geeta’s Wall Street Journal story:
Celgene, like many small biotech companies, had lost money every year since its founding. In 1998, it reported a loss of $32 million on revenue of $3.8 million… Celgene’s revenue soared to $38 million in 1999 and $85 million in 2000. It became a star on the stock market, even though it continued to post losses… At the end of 2002, Celgene reported a loss of $100 million on revenue of $136 million, as it continued to significantly boost its research and development spending… Each year, as thalidomide revenue grew, Mr. Jackson plowed more money into research and development of new medicines. By 2003, the R&D budget at Celgene had reached $123 million, which amounted to nearly half of the company’s revenue of $271 million. Part of the research budget funded three clinical trials of Revlimid, a drug the company believes could be more effective than thalidomide in certain cancers without the potential to cause birth defects.
Greeta’s article seems to confirm much of what Dr. Gertz and reps from Celgene were saying. These are complicated issues. Our capitalistic system is far from perfect. So lets concede research and development costs, when combined with the high risk of failure, justify high drug costs. I know, I know–some of you are reading this, screaming at your computer monitors “Are you crazy? Pat’s a @#$@ sell-out! No way are prices of $400+ a capsule fair, when some patients can’t afford to buy a new car or repair their homes, or buy new clothes for their kids when they go back to school…”
That’s OK! I understand. But calm down and stay with me here. I’m trying to be fair and balanced, remember?
This might be a good time for me to disclose my history with Celgene. I have never received a dime of compensation from Celgene. I have been taking Revlimid for over three years–and Celgene’s Patient Assistance Program did pay for my first cycle of Revlimid while we waited for insurance approval back in June of 2007.
Ironically, I am on the Patient Advisory Board of Millennium Pharmaceuticals, makers of Velcade. Why is this ironic? Because I have never used Velcade or any other product produced by Millennium–yet they still pay my expenses to speak before multiple myeloma support groups several times each year.
Like a good attorney, I can concede the defense’s point that high drug prices are needed to support past, current and future research–there is plenty of evidence proving unfair pricing and inequities in the system. How are drug prices set? How high is too high? Why do patients pay more for oral chemotherapy meds than IV drugs? Tomorrow I will explore how our insurance system helps promote and support sky high drug prices.
Feel good and keep smiling! Pat