By Henry Ehrlich
Sucker: Is this a game of chance?
Cuthbert J. Twillie: Not the way I play it, no.
This exchange is from the 1940 movie “My Little Chickadee” written by and starring W.C Fields as Twillie, who is playing a “gentleman’s game” of cards. Surveying the pharmaceutical news of the past several months I am struck by similarities between Twillie and pharma, which rigs the game against everyone—investors, taxpayers, and most grievously patients.
The big year-end story had little to do with medical science or public health, just the health of a single patient. On December 26 we learned that J. Michael Pearson, the chief executive of Valeant Pharmaceuticals International, had been admitted to the hospital for severe pneumonia. We don’t wish anyone ill health, but it’s hard not to feel a bit of schadenfreude over someone whose company “largely shunned research aimed at discovering and developing new drugs, which he viewed as too risky. Instead, Valeant grew by acquiring other drug companies, keeping their products and dismissing most of their workers.” Bah humbug.
The good news: “Federal prosecutors are looking into Valeant’s pricing, distribution and financial assistance programs for patients, according to the company’s regulatory filings.”
The previous week another pharma CEO, the piece-of-work Martin Shkreli, was arrested. He is best known for “acquiring a decades-old drug used to treat an infection that can be devastating for babies and people with AIDS and, overnight, raising the price to $750 a pill from $13.50. His only mistake, he later conceded, was not raising the price more.”
Shkreli’s arrest was for fraud, a Ponzi-scheme, raiding new companies under his ownership to pay off investors in the previous ones. I guess you take justice where you can get it, but as journalist Michael Kinsley said, “The scandal isn’t what’s illegal. The scandal is what’s legal.” Or as others have pointed out, it’s okay to put the screws to patient finances, but don’t you dare lie to rich people.
The worst example of Kinsley’s aphorism as it pertains to the allergy world is the “inversion” of ownership by Mylan, makers of EpiPen, which bought a Dutch company and relocated its nominal ownership to the Netherlands to lower its US tax bill by billions. Proof that a company can be both greedy and lucky came in the form of the Auvi-Q recall, restoring Epi’s effective monopoly on a cheap drug delivered by a mechanism that was basically paid for by the Defense Department, for which you food allergy families pay hundreds of dollars at a time.
(And by the way, no new news on Auvi-Q right now—I just called Sanofi.)
Greed isn’t going away any time soon. Nucala, (mepolizumab) the IL-5 inhibitor made by Glaxo to treat eosinophilic asthma that Larry wrote about a few weeks ago with such excitement, will hit the market at a heart-stopping list price of $32,500 per year for 12 injections.
Boston-based Institute for Clinical and Economic Review (ICER) an independent nonprofit organization that weighs clinical and cost effectiveness of new medicines, says the new drug should be as much as 76 percent lower to justify its value, or $7,800 to about $12,000, in line with the other monoclonal antibody used for asthma treatment, Xolair, which works on IgE instead of IL-5.
Larry, who has valiantly been treating asthma for decades, often in disadvantaged patients, calls this pricing “appalling.”
Reuters reported ICER’s judgement that while once-monthly injectable Nucala, “significantly reduces asthma attacks and symptoms and decreases the need for oral steroids… the price was not cost-effective, and that there is uncertainty about whether the benefits will persist over the long term because of the short duration of clinical trials.” Oh—could this be another one of those hurry-up breakthrough drugs I wrote about a few weeks ago? Glaxo counters by saying that the system will come out ahead by saving on treatment for emergency hospitalizations.
I don’t have much good to say about Glaxo for soaking patients and payers, but at least they are bringing a new drug to market, which is “too risky” for Mr. Pearson, who prefers to gouge without the hard work, unless of course you consider firing researchers hard work. Somehow, we have to revisit the tax code and make sure that companies are rewarded more for innovation in medicine than for financial chicanery. To paraphrase George Orwell, some innovation is more equal than others.
The fairy-tale ending would be that Pearson has a Scrooge moment and rises from his sick bed having seen the error of his ways, then rehires all those chemists and biologists. There has to be something in between profit and profiteering.