No Balm for Gilead

Hillary Clinton, very likely America’s next president, sees votes in promising to give the US pharmaceutical industry an enema. Good idea. I wouldn’t, in this instance, be against castor oil administered to selected CEO’s and private equity types by Julius Malema and his Red Shirts.

The other day I went to the dermatologist for a quick once over. She detected redness in an armpit and promptly gave me a prescription. When I went to get it filled, the pharmacist wanted to lighten my wallet by $490 — R7000 — for a 50 gram tube of cream.

What was this stuff, I asked, incredulous. Vusion, came the reply. No thanks, I said and went home to do some Googling.

Vusion, I learnt, is primarily prescribed for infants with persistent fungal nappy rashes. Not counting fragrance, it has three ingredients: miconazole nitrate (0.25%), zinc oxide (15%) and petroleum jelly (81.35%), each of which are readily and cheaply available over the counter in generic and brand name forms. Zero innovation is involved in blending these off-patent items. Home brewed, several hundred grams of Vusion would cost well under $20.

But how many mums whose babies’ bottoms are on fire are going to do the necessary research and DIY when they’ve been handed a prescription and all it signifies in the way of special curative powers — especially if their insurance is picking up the tab?

This muti’s makers know their market. It isn’t grumpy geezers like me who’ve grown deeply suspicious of the medical-industrial complex and who have time, not screaming toddlers, on their hands to do some digging.

The prime perpetrator is a company called Prestium Pharma. It acquired rights to Vusion from GlaxoSmithKline a couple of years back. Glaxo is still the manufacturer at a plant in Canada.

It’s inescapable that members of the medical profession are also in on the con. Asked to explain her choice of treatment, my now ex-dermatologist apologized. Vusion was very popular with patients, she said. She thought my insurance would pay the freight. That was not the point, I said. Everyone pays for scams like this in higher premiums, co-pays, and deductibles, not to mention the taxes needed to subsidize those who can’t afford insurance.

Helping restore faith in the profession are Dr Stephen Rosenberg, a Florida skin man, and his daughter Miranda, a third-year medical student. Alerted by patients suffering from sticker shock, they have published a study in the Journal of the American Medical Association’s latest Dermatology edition. They shine a light on the frankly obscene retail price increases Prestium and others have been pushing through on prescription medicines since 2009.

A tube of Oxistat, a jock itch ointment by Novartis, has gone from $77 to $545; Prestium’s Olux-E, for psoriasis, from $308 to $842; Glaxo’s Soriatane, also for psoriasis, from $758 to $1 595. These jumps are no more than hops compared to what Valeant Pharmaceuticals has done with its skin cancer drugs. A course of Targretin gel that cost $1 687 six years ago now retails for $30 320.

Not everyone pays retail, say the drug makers. But the market is utterly opaque. Firms are not required to divulge the prices they negotiate with insurance companies. Government is barred from revealing what it pays. What’s clear is that the companies seek by every lever at their disposal to extract the maximum squeezable from each customer. If that means giving out discount coupons to those who would otherwise seek alternatives, so be it. What’s lost on those layabouts will be made up on the swings.

But here’s the good news. Big pharma, in spite of almost bottomless pockets to buy a Congress that dances to its bidding, may finally have exhausted patience on both sides of the political aisle.

On Tuesday, Senator Charles Grassley of Iowa, a conservative Republican, joined Senator Ron Wyden, Democrat of Oregon, in lowering the boom on Gilead Sciences for how it priced its breakthrough and much in demand Hepatitis C drugs, Sovaldi and Harvoni.

What staff found in wading through 20 000 pages internal company documents was a tale of pure cynicism. In setting prices — $84 000 for a course of Sovaldi, $94 500 for Harvoni — executives made no reference to the cost of development or regulatory approvals, let alone to ensuring the widest possible access to the life-saving medicine. It was purely a matter of how much they could screw from payers, public and private. If the biggest profit could be made by setting the price at a level that limited access, so be it. Let ‘em die.

Go get them, Hillary. No balm for Gilead.