Outrage Over Drug Prices

May 01, 2011

Jill Wechsler
What were they thinking? is the main response to any mention of KV Pharmaceutical's launch campaign for Makena, a drug to prevent preterm birth for high-risk women. This injectable progesterone has been around for decades, widely available from compounders for a relatively low $10 to $15 a dose. KV jacked that up to $1,500 a shot, causing an uproar that made pharma marketers cringe. It also raised questions about the Food and Drug Administration's orphan drug exclusivity policy, the agency's campaign to encourage registration of unapproved drugs, and the value of pharma patient assistance programs.

Slashing Healthcare Costs
The nation's focus on healthcare spending, including the squeeze on state Medicaid programs and proposals to radically overhaul Medicare (see sidebar), has cast a harsh light on pharma spending. Payers and providers complain about price hikes on AIDS drugs, as seen in a request from California officials for Gilead Sciences to cut the price of Atripla, because $22,000 a year per patient is taking a toll on the state's AIDS drug assistance program.

High prices for new, important therapies raise concerns about access and impact on public and private health plans. Bristol-Myers Squibb (BMS) won plaudits for its new melanoma treatment, Yervoy (ipilimumab), which FDA approved in March. But patients and payers were surprised by BMS' plan to charge $120,000 for a complete course of treatment—six times more than expected. Dendreon's $90,000 price tag for its therapeutic prostate cancer vaccine Provenge prompted a review of the costs and benefits for Medicare patients by the Centers for Medicare and Medicaid Services (CMS). The agency decided that Medicare will pay for the therapy for some patients, but health advocates admit to qualms about Medicare assuming such a large cost for relatively minor benefit.

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