Malcolm Lader’s comment
Charles Beasley’s Comment on Barry Blackwell’s Corporate corruption in the psychopharmaceutical industry
Dr Beasley focuses on the cost of developing a new chemical entity in order to justify the price asked for a patented drug. But can he justify the recent price hikes in the UK and elsewhere with respect to generic formulations, long out of patent?
Numerous agencies and the media in the UK commented on the ‘scandal’ of companies with generic products selling them on to other companies, whereupon the drug is no longer subject to price controls because of a loophole in the law (http://www.telegraph.co.uk/business/2016/12/07/drug-firms-fined-90m-hiking-price-nhs-epilepsy-drug-2600pc/).
That re-pricing is perfectly legal, but some companies have increased the cost of the generic product quite inordinately. The biggest worry centers on the sale of the epilepsy drug, Epanutin (phenytoin sodium). The cost of this venerable anticonvulsant rose several fold overnight when it was sold by its license holder, Pfizer, to a small private company, Flynn Pharmaceuticals. The medication, which is used by at least 50,000 people across Britain, originally cost about 67p (84 cents) per 50mg. But after the sale this price shot up to £16 ($20) for the same amount, representing a 2,385 per cent increase. It was estimated that this mark-up will involve the NHS in spending an extra £50m ($62.5m) per year on phenytoin.
The Competition and Markets Authority in the UK said the drug maker broke competition law. Pfizer was fined £84 million ($105m) for this initiative while Flynn Pharma was fined £5.2 million ($6.5 m) (http://www.telegraph.co.uk/business/2016/12/07/drug-firms-fined-90m-hiking-price-nhs-epilepsy-drug-2600pc/).
In the UK, 48,000 patients are prescribed the drug. The costs were far more than Pfizer was charging in any other European country. Both Pfizer and Flynn attempted to justify the increases as necessary for profitable commercial activity. Pfizer stated that "Medicine divestment can play a valuable role in ensuring that a medicine continues to be available to patients"; Flynn averred that the drug was "competitively priced." Both companies intend to appeal.
Similar outrage has been expressed in the USA. For example, doxycycline hyclate was increased by more than 8,000% per cent between October and April 2014, according to a bipartisan Senate report (https://www.aging.senate.gov/imo/media/doc/Drug%20Pricing%20Report.pdf); Twenty states are taking legal measures to oppose this.
Can Dr Beasley in any way justify these increases? They are not technically illegal, but patients paying for their own medication will suffer financial adversity and may not be able to afford their medication at all. National Health schemes will otherwise foot the bill. Is this what the pharmaceutical Industry really wants? Do they wish to become the pariahs of commerce and manufacturing because of legal but nevertheless dubiously moral profiteering? Patients will suffer because of these machinations.
Perhaps Dr. Beasley with his extensive experience of the pharmaceutical industry can enlighten us on the rationale behind these price hikes?
July 6, 2017