An editorial from Andrew Pollack of NY Times' "Prescriptions" blog. He points out that is drug companies aren't always up front when it comes to the cost of new drugs or price increases for older ones. He includes Merck and Vertex's new drugs for Hepatitis C as examples. Not a very exciting or particularly incisive read, but he does make a good point not always obvious to people outside the business of drug development.
May 31, 2011, 4:09 pm
The Hidden Price of Drugs
By ANDREW POLLACK
Pharmaceutical companies are happy to tout the benefits of their newest drugs. But sometimes they seem far less willing to let the public know the price of the product.
The latest example occurred on Tuesday morning when Optimer Pharmaceuticals announced that its new drug to treat diarrhea caused by the bacterium Clostridium difficile would cost $2,800, about twice as much as the existing approved drug.
On Friday, Optimer announced in a press release that the Food and Drug Administration had approved its drug, called Dificid. But the company kept the price out of the press release, saying it would not reveal it until its conference call with securities analysts Tuesday morning.
Whatever the reason for the tactic, it had the result of keeping discussions about what many would consider eye-popping prices out of initial articles about the drug’s approval.
Vertex Pharmaceuticals did this as well after the recent approval of its hepatitis C drug, Incivek. The press release contained a lot of information about how generous the company was going to be in helping customers with their insurance co-payments. But it did not include how much the drug would actually cost — $49,000.
In that case, however, the call with analysts in which the price was unveiled came only about two hours after the approval was announced.
It could be pointed out that analyst calls are also a more supportive environment for a company. Analysts often applaud “premium’’ pricing because it means higher sales for a drug, whereas patients and insurers would have the opposite view.
Merck did put the $1,100-a-week price of its new hepatitis C drug, Victrelis, in its press release. But the price was mentioned in a single short sentence at the very bottom of a press release that was more than 250 lines long.
Dr. Jeffrey H. Albrecht, a gastroenterologist at Hennepin County Medical Center and a professor of medicine at the University of Minnesota, said he was frustrated trying to find documented information, outside of news reports, on the price of the new hepatitis C drugs.
“When you take a step back,’’ he said in an e-mail, “it is really remarkable that patients and physicians often don’t know how much treatments or tests cost.’’
Actually, Merck, Vertex and Optimer did more to make their prices public than some companies, which never reveal their prices. And some companies say they do not want to reveal the price until they actually begin marketing the drug, which in some cases can be weeks or even months after the regulatory approval.
A spokeswoman for Vertex said that price was complicated since patients did not usually pay the listed wholesale price. An analyst call, therefore, was a better way to reveal the information.
“We wanted to get the information out quickly but also avoid confusion about an important and complicated topic,’’ she said.
A spokesman for Optimer said it was not customary to put prices in press releases, and that telling the price to analysts allowed the company put the information in context.
On the call Tuesday morning, Optimer’s chief executive, Pedro Lichtinger argued that the $2,800 price for a 10-day course of treatment with Dificid was in line with prices for some other new antibiotics.
He said Dificid would be cost-effective because it might cut down on hospital stays and other costs associated with treating C. difficile. In clinical trials, Dificid was superior to the only other approved drug, Vancocin, in providing a “sustained clinical response,’’ he said.
Vancocin, an oral form of the antibiotic vancomycin sold by ViroPharma, costs $1,000 to $1,500 for a 10- to 14-day course of treatment at the lowest dose, Mr. Lichtinger said. But some patients get higher doses or longer treatments, multiplying the cost.
ViroPharma has been steadily raising the price of Vancocin and has taken legal action to try to delay approval of generic versions of the drug. Still, many hospitals get around the price of Vancocin by using the intravenous form of vancomycin, which is generic, in a manner that lets patients take it orally.
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