Introduction
The drug market has always been characterized by its particular opacity, and by the relative weight acquired by certain issues such as patents, information asymmetry and monopolistic positions. Especially when setting prices beyond the true costs of production. His behavior is at least strange. Instead of the price tending to equilibrate when the marketing of a new drug is authorized, its monopoly power and product differentiation lead it to aggressively increase its market price in relation to other molecules already present and with the same indication. therapy. It is therefore unlikely that the sub-market for biotech drugs applied to oncology therapy will trigger major changes in price flexibility,given the context. The elasticity available to manufacturers for setting the launch price of new innovations and for applying subsequent increases appears to have intensified significantly, and shows no signs of abating. Thus, the industry strategy is based on perceiving the elasticity / price of demand (or the insurance oligopsonies of the same) and establishing the final value according to what society (or these) is willing to pay. Unfortunately, there is no clear formula for evaluating health gains over time, and much debate as to when and how to calculate the values. The complexity of the aforementioned forces to establish an interesting decision-making framework, as much as it makes it difficult to find universal instruments that give them support.The elasticity available to manufacturers for setting the launch price of new innovations and for applying subsequent increases appears to have intensified significantly, and shows no signs of abating. Thus, the industry's strategy is based on perceiving the elasticity / price of demand (or the insurance oligopsonies of the same) and establishing the final value according to what society (or these) are willing to pay. Unfortunately, there is no clear formula for evaluating health gains over time, and much debate as to when and how to calculate the values. The complexity of the aforementioned forces to establish an interesting decision-making framework, as much as it makes it difficult to find universal instruments that give them support.The elasticity available to manufacturers for setting the launch price of new innovations and for applying subsequent increases appears to have intensified significantly, and shows no signs of abating. Thus, the industry strategy is based on perceiving the elasticity / price of demand (or the insurance oligopsonies of the same) and establishing the final value according to what society (or these) is willing to pay. Unfortunately, there is no clear formula for evaluating health gains over time, and much debate as to when and how to calculate the values. The complexity of the aforementioned forces to establish an interesting decision-making framework, as much as it makes it difficult to find universal instruments that give them support.
BigPharma's new submarkets in oncology
In the field of oncology, therapeutic innovations occur on the side of biotechnological molecules based on the manipulation of genetically modified living organisms to create products for human medicinal use. The subsector for the development of sophisticated drugs for the care of complex diseases - especially oncological and rare - concentrates the largest number of such companies in the United States, with 62% of the total. Both the smallest and those strategically associated with BigPharma have begun to saturate their pipelines with this production line. In 2013, only biotech companies in the United States had more than 900 molecules of this type in R&D, which led to to a significant growth of the Nasdaq Biotechnology sector index of 65% due to sales expectations and probable earnings,thus becoming the most profitable of the New York technology exchange. It is an extremely risky productive sector to invest in innovation, given the characteristics of the molecules, their safety problems and the complications of use that can appear in Phases II and III, but also highly profitable in terms of actions even in the initial phases of the trials. And there are a host of defense tactics used by biologics developers to counter threats to their business, maintain market share, protect pricing, and respond to market changes.given the characteristics of the molecules, their safety problems and the complications of use that can appear in Phases II and III, but also highly profitable in terms of actions even in the initial phases of the trials. And there are a host of defense tactics used by biologics developers to counter threats to their business, maintain market share, protect pricing, and respond to market changes.given the characteristics of the molecules, their safety problems and the complications of use that can appear in Phases II and III, but also highly profitable in terms of actions even in the initial phases of the trials. And there are a host of defense tactics used by biologics developers to counter threats to their business, maintain market share, protect pricing, and respond to market changes.maintain market share, protect pricing, and respond to market changes.maintain market share, protect pricing, and respond to market changes.
The stock market value of the 70 leading US-based biotech companies that made public stock offerings between 2012 and 2013 reached $ 39 trillion. Of the ten best-selling drugs in the US healthcare market in 2014, seven were biotech, representing more than 70% of total sales.
Monoclonal antibodies (m onoclonal a nti b hate s - mabs-) chimeric or humanized murine type and recombinant DNA molecules, among others, share leadership within the most recent arsenal of specialized oncology practice. Only between rituximab (Rituxanª), bevacizumab (Avastinª) and trastuzumab (Herceptinª) all from the Swiss Roche, revenues of US $ 21.4 Billion were generated. This, in addition to highlighting what biotechnological innovation implies in terms of health and the economy, opens the door to a new discipline that could be called Health Bioeconomics, based on a better knowledge of the disease in its different fields and in the cost / effectiveness of technological innovation for its resolution, especially in what this implies regarding the improvement of the quality of life of patients.
Regardless of the final benefit that therapeutic innovations in the field of oncology determine in relation to other chemical molecules already on the market, their entry has brought with them a high financial impact on health systems, given the high launch prices. The problem is the high social value they acquire for medical care, although their cost / effectiveness is often scientifically and healthily doubted. Especially when the cost of a treatment for as long as it is necessary - many times exaggerated for the magnitude of its effects - must be covered with public funds or social security, and many more times directly from the pocket.
There are certain aspects of Biotech that demonstrate the phenomenon of technological innovation and increasing cost. Genetic-based tests lead to a convergence between the ultra-diagnosis of certain pathologies and the therapeutic association. In this way, many innovative molecules are effective for a specific target of the affected population. For example. Genentech, a biotechnology division of Roche, developed a specific monoclonal (trastuzumab) to treat women with breast cancer that overproduces a gene called HER-2. The treatment is not effective if the carcinoma is due to other causes, in addition to giving rise to side effects of some risk. The FDA has recommended always using the HER-2 detection test beforehand,with which a diagnosis and treatment association is established for a specific target.
From the industry side, the argument put forward to justify such price overruns is based on the thousands of days and unproven millions of dollars that are lost in the research phases, whose objective is to comply with the Schumpeterian triad of designing, inventing or identify a new molecule, especially biotechnological, describe its innovative mechanism of action and demonstrate its preclinical effectiveness and reach the stage prior to its dissemination in the market and its incorporation into routine clinical practice. Reality holds that it is an investment industry driven by the expected returns of its shareholders. The rigidity and high costs established by the FDA regulatory process exerts a certain discrimination against the smaller B iotech,and leads the industry to focus on finding * blockbusters ^. What, then, is the balance point between said expected profitability and your social responsibility to maintain health and cure certain diseases?
On average, 16 to 18% of the molecules that enter Phases II and III of the trials successfully go to market once the trials are concluded and safety and clinical approval is obtained. For the final step of introducing the product into the marketable scheme, only the approval of a regulatory body remains (FDA in the US or EMA in Europe). It is common for the EMA to always have an average six-month delay in relation to the FDA approval time, after which another new temporary delay appears, focused on the pricing stage and the negotiation of the coverage modality. However. Of those that are in phase I of clinical trials, only one in ten has a chance of reaching commercialization.
Once the monopoly is achieved by way of the patent, each month of a blockbuster means hundreds of millions of dollars of exclusive profits. Since the patent is granted for a specific use, the industry is constantly looking for new applications for the same molecule (eg, what is effective in pancreatic cancer may also be effective in gastric, for example). Under the current regulation, laboratories can obtain three more years of exclusivity in the market if they can prove it. A trial carried out on another pathology may allow the extension of exclusive protection for a further six months. Although the life of a patent is 20 years from its initial registration (prior to the preclinical and clinical phases), the average time it takes to develop such clinical trials and obtain regulatory approval - for example,in the case of a humanized monoclonal oncological biotech - it is a proxy for 11-12 years. The problem is that once approved, and the possibility of entry of biosimilars being blocked for the duration of said protection, the company with a sales monopoly faces the demand induced by professionals and in the search for exceptional profitability the storm generated appears. for the unpredictable price that is set.
The cost / effectiveness dilemmas in cancer therapy
This situation, observable with new drugs, especially oncological, but also in rare diseases, leads to three types of questions: economic, health and ethical. The first is based on the fact that, for society, the cost of new cancer treatments are becoming less and less accessible. The issue becomes more complex when, beyond the price, there is a certain clinical benefit for patients with little chance of survival.
An example is what happens with advanced metastatic melanoma, a pathology whose prognosis is very negative, with 75% of patients who do not reach one year of life. The long-term average survival is less than 10%, with a median survival time of 6 to 10 months. The human monoclonal ipilimumab (Yervoy °), an immunostimulant of the CTLA-4 immune response mediated by T lymphocytes from the Bristol Myers Squibb (BMS) laboratory authorized by the FDA for the treatment of this pathology, has a positive response free of 3-year progression in about 20% of patients who receive it. This is a figure that, although not clearly higher than what was observed with conventional treatments (12%), is capable of relatively improving overall survival in patients with melanoma.
According to the work by Roberts et al, the median overall survival for the ipilimumab group was 11.2 months, compared with 9.1 months in the placebo group, with which the survival difference is only 2.1 months. However. Depending on the degree of advancement, the remaining 80% of patients require treatment associated with nivolumab (Opdivo °), a PD-1 inhibitor that activates T cells by another mechanism, also original to BMS and included in different trials. Larkin & col showed that with the nivolumab - ipilimumab combination, a positive response is obtained in just over 50% of patients, with a reduction in tumor mass greater than 80%. The median progression-free survival with nivolumab + ipilimumab is 11.5 months, versus 6.9 months for nivolumab monotherapy and 2,89 months of ipilimumab monotherapy, with a minimum follow-up of 18 months. The problem is cost. Ipilimumab in Argentina has a total price of US $ 139,940 for 4 doses (3mg / kg one every 3 weeks) and that of nivolumab of US $ 40,776 for the same number of doses and concentration. In this case, standardizing the modality of use according to the protocol, the cost of associated treatment is the same for ipilimumab, although it is lower for nivolumab (US $ 13,592 at a rate of 1mg / kg x dose), with which the cost Annual total is US $ 153,532.The associated treatment cost is the same for ipilimumab, although it is lower for nivolumab (US $ 13,592 at a rate of 1mg / kg x dose), with which the total annual cost is US $ 153,532.The associated treatment cost is the same for ipilimumab, although it is lower for nivolumab (US $ 13,592 at a rate of 1mg / kg x dose), with which the total annual cost is US $ 153,532.
Something similar in terms of cost and effectiveness occurs with about a dozen new drugs, whose prices exceed US $ 100,000 per year and are administered to patients with different advanced-grade oncological pathologies. Price is one thing and profit is quite another. In general, the newer and more expensive cancer drugs do not provide results of such a level that they can dramatically prolong life for patients. An article published in The Lancet (Cavalli, 2013) points out that the cost of the new generation of drugs is moving away from any correlation with the added benefit.
The second question arises from the costs to the health system and its funders. They will undoubtedly tend to be higher and higher, if the speed of incorporation of new drugs to the market becomes as unpredictable as their price, and if a virtual monopoly also results. In Latin America, many innovations are priced higher than in high-income countries. This is very common in the field of oncology, which implies artificial barriers to access to new treatments. The very nature of the disease and the severity of the diagnosis make patients and doctors agree to pay the high cost of innovations, even against minimal marginal improvements in outcome, or against existing drugs with known effectiveness.
An element that can paradoxically act contrary to the expected price - profitability is the specificity of the new therapies. The advance achieved through genetic diagnosis to specify the target of the molecules and thus increase their therapeutic efficacy has been mentioned. This can reduce the weight of the demand, since only those who possess the gene that produces the disease will have clinical benefits, with which the pool of patients to whom a certain drug is indicated will be smaller and also the consequent expense.
Although most cancers still have no cure, and treatments work only for a certain time, it is difficult - even in that context - to make economic and cost / effectiveness decisions to relativize the approval or use of new molecules. It is the physicians who decide when each option is used, and manage its cost. Both society and professionals do not see the new biotechnological drugs as competitors with the existing ones, but rather as a continuity of a battery of treatments aimed at patients with advanced stages and seriously ill.
The third option is more complex. Who can ethically deny a treatment for the simple reason that it is considered that the adjustment of the patient's quality of life does not justify the cost? How do you arrive at the legitimate construction of the NO in front of the patients and their demand? Many of them - with advanced stages of the disease - will try to benefit from the new treatments, but they will only be able to do so by accepting their participation in clinical trials. Therefore, each innovative molecule even in experimentation begins to acquire in this situation an effective monopoly condition, starting from the corresponding trial Like any monopoly, it may later have the price that the pharmaceutical company can set and the market and the funders can support, without losing sight of the purchasing power of each nation.It seems that then, in the cycle of invention - innovation - diffusion - commercialization of a drug, a link is broken.
The National Institute for Health and Care Excellence (NICE) has taken an active part in this issue, with respect to the so-called “End of life” treatments that are already very expensive and cause comparatively small health gains. In the first instance and taking into account that the cost / QALY of these therapies always exceeds £ 30,000, it introduced a modification on the general criterion, establishing that for the cost-effectiveness of said technology to fall within the threshold range, it should be between £ 20,000 and £ 30,000 per QALY earned.
Given the social and political upheaval generated by his preliminary recommendation to reject six anticancer drugs for not being cost-effective according to this rule, he had to modify the criteria once again, establishing that no cancer drug that met the “End of Life” criteria could cost more than £ 43,000 - £ 53,900 ($ 48,000 - $ 60,200) per QALY. The dilemma became what ethical position should be taken then, for example, with bevacizumab (Avastin °) destined to treat several cancers, (among them colon, metastatic breast and lung), with bortezomib (Bromadene °) for multiple myeloma with two previous treatments, cetuximab (Erbitux °) for colon and squamous cell Ca,ofatumumab (Arzerra °) for lymphomas and refractory chronic lymphoid leukemia; and brentruximab (Adcetris °) for Hodking or anaplastic large cell lymphoma. All with annual treatment costs that widely exceed US $ 70,000 and average US $ 120,000 to US $ 150,000 with relative QALY profit expectations.
BigPharma researchers continue to explore new high-tech methods to fight a more even battle against disease, as well as innovative ways to maximize the use of existing drugs, either alone or in combination with other therapies. In fact, approximately 80% of the oncological drugs in the pipeline are the so-called first in class, and 70% are profiled to form part of the so-called “personalized therapy”. But the biggest drawback related to the search for molecules for certain forms of cancer lies in the distortion that, on the pharmaceutical industry, produces the type of economic incentive that conditions the development of certain lines of treatment. Market prices with which laboratories introduce their products act in the same way,the time of patent protection and the response of the competition. It is in the elasticity / price where the industry finds the market value both from the expectation generated by the new product compared to the existing ones, and from its final effectiveness. And also of the use that is given to certain drugs regarding the value that it means in terms of life gain.
Many insurers worldwide, such as the case of Express Scripts Holding Co - a prescription drug benefits manager in the US - have begun to raise the possibility of closing agreements with pharmaceutical companies to pay less, when the oncological drugs to be used - of very high price - they do not generate the expected results. A mechanism called payment per performance.
Roche's erlotinib (Tarceva) case serves as a control case to analyze the difference in effectiveness and price according to indication, tumor type and stage of advancement. Administered orally in the case of unresectable or metastatic pancreatic carcinoma, the mean survival obtained compared to placebo does not exceed two weeks. But in lung adenocarcinoma, its effectiveness is 6.7 months, versus 4.7 months for a combination of traditional chemotherapy. Based on these wide differences, the price per tablet of the drug should be lower for the first treatment than for the second. The only drawback is that the drug has a single market price for either of the two alternatives (US $ 7,224 for 30 150mg tablets)
Conclusions
How will the prices of cancer drugs be decided going forward? Of the many complex factors that seem to be involved, it is possible to follow a simpler formula: put the most recent price of a therapeutically similar drug on the market, and add 10 to 20% as a base. Although oncologists do not face direct incentives to avoid the most expensive drugs, they could only resist prescribing those drugs whose prices are well above the reference price level.
Surely, one of the factors that helps to reduce the weight of future prices of innovative molecules will be that few products will be available uniformly in all countries. Of 22 therapies added to the cancer arsenal in 2016, two-thirds are already in use in developed countries, compared to the third that will only be reached by emerging drug markets in the next five years.
Technological pressure becomes increasingly complex. As the prices of new cancer drugs continue to climb the elevator, funders increasingly perceive their economic structures shaking under their feet. Regulators feel regulated from within by the very ones they should regulate, and doctors escape protocols in the name of professional autonomy. Meanwhile, patients often receive almost experimental treatments, with little evidence of benefits in terms of quality or quantity of effective life. The crossroads of prices turns into a health dilemma, but mainly an ethical one. And the problem leads to the question - like Lewis Carroll's Alice - as to which way to go. This is where pharmacoeconomics and its theory can help, but as always,they need their faithful companion and ally, health policy.
Bibliography
- Government of the Basque Country. Health. Committee for the Evaluation of new drugs for hospital use. Evaluation report nº 23 / November 2012 Extracted from: http://www.euskadi.eus/informacion/evaluacion-de-nuevos-medicamentos-en-el-ambito-hospitalario/web01-a2cevime/es/Aceituno, S, Canal, C.; Paz, S.; González.; MárquezRodas, J. Cost-effectiveness of ipilimumab in the first-line treatment of patients with advanced melanoma in Spain. XI Scientific meeting of the Spanish association for the evaluation of technologies. Barcelona, November 13-14, 2014. Retrieved from: https://www.researchgate.net/publication/282759559_Coste-efectividad_de_ipilimumab_en_el_tratamiento_de_primera_linea_de_pacientes_con_melanoma_avanzado_en_EspanaRobert C, Thomas L, O'Garrenko S, WeberDaybe I, Bondarenko I.Ipilimumab plus dacarbazine for previously untreated metastatic melanoma. N Engl J Med. 2011; 364: 2517-26. Larkin J, Chiarion-Sileni V, Gonzalez R, et al: Overall survival results from a phase III trial of nivolumab combined with ipilimumab in treatment-naive patients with advanced melanoma (CheckMate 067). 2017 AACR Annual Abstract CT075. Presented April 3, 2017. Retrieved from http://www.abstractsonline.com/pp8/#!/4292/presentation/12341 Ipilimumab Therapeutic Positioning Report Retrieved from: http://www.ema.europa.eu/docs/ es_ES / document_library / EPAR _-_ Product_Information / human / 002213 / WC500109299.pdf Therapeutic positioning report of nivolumab Extracted from: http://www.ema.europa.eu/docs/es_ES/document_library/EPAR_-_Product_Information/human/003985/WC5001897.pdfCavalli, Franco. “An Appeal to World Leaders: Stop Cancer Now.The Lancet 381 (9865); 425: 426; 2013 Edelman, B. Explaining The Cost of Biotech Therapies. Biotechnology Healthcare. Vol 1. 37; 41; May 2004. Retrieved from www.ncbi.nlm.nih.gov/pmc/articles/PMC3555164/Pinto Prades, JL; Sánchez Martínez, F. Oncological therapies and cost effectiveness. Working document 2012/1. Chair of Health Economics. Pablo de Olavide University, Ctra. Sevilla-Utrera, Seville. Extracted from: upo.es/cades/export/sites/catedra-economiasalud/galerias/Publicaciones/Terapias_oncolxástica_y_coste-efectividad.pdf Bach, Peter B.. "Limits on Medicare's Ability to Control Rising Spending on Cancer Drugs." New England Journal of Medicine 360 (6); 626: 33 2009, Shaoyi Liao, Resolving the Dilemmas Between the Patent Law and Biotechnology: An Analysis of Three Recent Biotechnology Patent Cases, 11 Santa Clara High Tech. LJ 229 (1995).Retrieved from: http://digitalcommons.law.scu.edu/chtlj/vol11/iss2/2McLean, M. Thinking Ethically About Human Biotechnology. Markkula Center for Applied Ethics., Santa Clara University, California. US. Retrieved from https://www.scu.edu/ethics/Herrera, S. Price controls: preparing for the unthinkable. Nature Biotechnology 24, 257-260 (2006). Retrieved from http://www.nature.com/nbt/journal/v24/n3/full/nbt0306–257.html Shelby, R & Col. How Changes in Drug-Safety Regulations Affect the Way Drug and Biotech Companies Invest in Innovation. Health Affairs 25, no.5 (2006): 1309-1317 Marcus, Amy Dockser. "Price Becomes Factor in Cancer Treatment." Wall Street Journal, September 7. 2004. Retrieved from: https://www.wsj.com/articles/the-million-dollar-cancer-treatment-no-one-knows-how-to-pay-for-1524740401Lakdawalla, D., Romley, J,; Sanchez, Y.; Ross Maclean, J;Penrod, J. and Philipson, T. "How Cancer Patients Value Hope and the Implications for CostEffectiveness Assessments of High-Cost Cancer Therapies." Health Affairs 31 (4); 676: 82. 2012Wittes, Robert E.. "Cancer Weapons, Out of Reach." Washington Post. June 15. 2004; Retrieved from: http://www.washingtonpost.com/wp-dyn/articles/A42035-2004Jun14.htmlWheeling, K. Biotech company marks up drug cost by 5,000 percent, because it can, Pacific Standard Mag. Retrieved from https: / /psmag.com/economics/biotechKalish, D. and Thompson, G. Biotechnology and the American Healthcare System.washingtonpost.com/wp-dyn/articles/A42035-2004Jun14.htmlWheeling, K. Biotech company marks up drug cost by 5,000 percent, because it can, Pacific Standard Mag. Retrieved from https://psmag.com/economics/biotechKalish, D. and Thompson, G. Biotechnology and the American Healthcare System.washingtonpost.com/wp-dyn/articles/A42035-2004Jun14.htmlWheeling, K. Biotech company marks up drug cost by 5,000 percent, because it can, Pacific Standard Mag. Retrieved from https://psmag.com/economics/biotechKalish, D. and Thompson, G. Biotechnology and the American Healthcare System.
