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While I was searching for Henry Waxman’s comments about Anna Eshoo’s PhRMA boondoggle which will leave cancer patients in financial ruin just to pay for lifesaving biologic drugs, I came across a bizarre claim from her cosponsor Jay Inslee. He seems to believe that these companies need to be granted a monopoly on these drugs so that investors can recoup the money the risk for developing them:
A fellow named Eric Limburgh, he’s Limburgh’s grandson of fame. He’s in Snoquamish Washington who was bedridden due to rheumatoid arthritis til these guys invested about a billion dollars to build a product called “Enbrel.”
He’s now up walking around, he’s a successful artist whose life has been restored because we have laws that allowed investors to put a billion dollar investment that eventually, through luck and incredible creativity, built this drug to save his life.
That’s the guy I’m thinking of when I’m voting on this, that does create the appropriate balance of protecting investors’ investment and moving forward, and I think that’s the right balance.
But an analysis by Knowledge Ecology International shows that it is doubtful that Amgen spend more than $400 million on clinical development of the drug before approval, and that more than half of the early Phase I and II clinical trials on this drug were funded by the government through NIH or by universities. Amgen invested money, but invested most of its money late, when the risks were low. And, on top of this, some of the Amgen outlays on clinical trials qualified for the orphan drug tax credit, which means that U.S. taxpayers pick up half the costs of those trials.
Moreover, even if Amgen had spent $1 billion developing Enbrel, they’ve been more than amply awarded given that Enbrel is the top-selling biologic drug with reported sales of $5.29 billion in 2007 alone. (PDF)
I was with a young person recently who has rheumatoid arthritis. Fully insured, they’re paying $1900 a month for Enbrel. They are afraid to tell anyone about it for fear it will make them unemployable.
The public already has significant investment in these drugs, at the most risky stage. Apparently Inslee believes that is appropriately compensated by allowing drug manufacturers to reap huge profits on blockbuster drugs with protected monopolies. The public is invited to go into hock paying for them as they try to stay alive.
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A “survival of the fittest” fat wallet policy. Conservatives should be screaming over this. Otherwise, they are supporters of Darwin and evolution.
Does Inslee mean Erik Lindbergh? If so, Inslee needs to take his haid out of Rush’s butt.
http://en.wikipedia.org/wiki/Erik_Lindbergh
1900 bucks a month for one drug?!!
That’s almost what I take home.
No way could I afford that.And this person is fully insured?!!
That’s insane.
Latest I’ve heard from the JHDS sufferers at dkos:
… which completely ignores the fact that the new 12-year restriction applies to the same old clinical data, correct?
The data that, as Jane notes above, is paid for in large part by taxpayer funds, right?
It is insane. I imagine that many people are paying these awful prices and thinking that it can’t be changed or they are doing without the drugs. They don’t realize that they are getting so badly cheated.
That’s the way it’s supposed to work, isn’t it? The productive people invest money and us leaches underwrite the risk. That’s how it works in finance, why should health be any different?
We should be thankful the productive people are willing to invest their hard earned money to help us leaches. If we complain they might just go Galt.
I’m sure most realize it. You choose: immobile and in extreme pain, or cheated. Most, if they can afford it, would pick cheated.
Revenues of $5.29 Billion in 2007… how much is profit, how much marketing, etc?
This is just guessing, but monopolies can have very high profit margins, it seems reasonable to guess 20% production cost, 10% marketing, 15% SGA, 55% profit. I’m probably too conservative and profit is higher.
Played with the numbers led me to an interesting thought – the $1900/month copay (20%) may line up with the actual cost of producing the medicine, the portion paid by insurance going to profit, marketing, etc. Shuffling money from the health insurer to the investors at no benefit to the patient (and they may be the same entity, insurance companies are investors).
In addition to totally misspelling Lindbergh’s name, the quote is poorly written elsewhere.
“He’s in Snoquamish Washington who was bedridden due to rheumatoid arthritis…”
“That’s the guy I’m thinking of when I’m voting on this, that does create the…”
Apparently Inslee can’t write either. I can’t find the source, but I’m betting it’s all garbage.
I have a good mind to invest only in a progressive companies where people are valued over profit.
They’re misreading it – the structural modification restarts the exclusivity for the “reference product”.
And if you’re unlucky enough (lucky Lindy!) to be born without a fortune bequeathed from your famous grandfather, tough luck.
My wife used to take this medicine for quite sometime until after a while the drugs affects started to diminish. We were, and gratefully still are, fully insured and we paid only a $40 copay at that time. Also, not that it is cheap but the retail price that shows on the receipt that shows what we pay (copay) and what the insurance company pays said the the price was just over $1200 (can’t remember the exact cost as it has been a little over a year since she switched).
Although it is expensive the money that these “evil” drug makers are making are being used to fund new drugs that just may save YOUR life some day.
Before anyone demonizes the drug company or any other other big business I suggest that you take a look at your 401K and look at your funds and see what YOU are invested in. Those in glass houses…Chances are that you are earning money for your retirement from those “evil” big businesses. Just a thought from a middle class guy making a lot less than most of you…
I have never understood why the early investors — US taxpayers — aren’t granted early-investor status in the successful financial outcome of these types of drugs. Why does our investment go unrewarded? Why does our early risk-taking, as venture capitalists, not get treated the way VC investments in companies are — richly? Why do the late-entry drug makers get to sop up all the profit while getting tax breaks for their investments?
Alternatively, why let drugmakers into the profit pool at all? Why not simply make drug research government-sponsored or non-profit, with manufacturing, distribution, and doctor relations conducted by the drug “makers”?
This system makes no sense.
Oh, so you’re simply going to ignore the point that U.S. taxpayers have already funded half the expense (at the riskier stage), and get nothing in return? Nice.
And secondly, I don’t have a goddamned 401k precisely because I don’t want to profit from blood money.
Never mind that there is no such place in Washington as “Snoquamish”
Mr. Inslee seems to confuse guaranteed return with a high return commensurate with actual risk. The latter is what businesses claim to want; the former is what they really want. It’s what the banksters and the insuresters have recently gotten. It’s what defense contractors always get. It’s what customers, suppliers and taxpayers can no longer afford, certainly not as a consequence of the kind of government intervention both parties claim is not a valid role for government.
This isn’t leveling any playing field; it’s funneling profits industry’s way, floating on a stream of government support. That’s “capitalism”, not corporatism, in the Beltway’s tunnel vision. When average Americans want government to help them through transitions, they’re socialists. What a crock.
This is done by allowing insurance companies to manipulate their “formularies” which is the list of covered drugs. most plans have one rate of co-pay ofr generaic drugs, a high rate for name brand drugs which are listed on their formulary and an even higher rate (or no coverage at a ll) for non formulary drugs.
When I asked my helath insurance agent how I would know if a drug was non formulary , she said “if it is advertised on TV, it is probabaly not on the formulary”
I’m sorry you have to pay so much for drugs.
Why on earth would you presume how much more or less anyone else here is making? Why? What world do you live in that gives you that information?
You are not the only one hurting. You do not know how much others are too.
Please hear me. Your presumptions just might be incorrect. Is that at all possible?
It’s a really hard world for a lot of folks. Some are here. Please don’t go out of your way to be hurtful.
There are a lot of players in research.
Scientists,
Technicians,
Administration,
etc.
Patents typically go to the Scientists who then get VC money to do further development. University’s will have an external research office that helps with this, lining up the VC and getting a chunk of future money. So there’s a little flowing back to taxpayers into University coffers. NSF/NIH doesn’t get any return beyond the advancement of knowledge.
The techs and admins (and an admin that understands how to get needed equipment within a convoluted procurement system is very valuable) get dropped at this point. This is not a good feature of the system, these players should share in rewards their work enables.
It’s worth thinking about whether an ownership stake for granting agencies makes sense – you file a patent from research supported by NIH, NIH gets 10% of profits for the life of the patent. The first problem with that is it makes grant authorities have a preference for research that is potentially profitable rather than basic research.
I have psoriasis and psoriatic arthritis. A few years back my only choices were highly toxic drugs like methotrexate (which can damage your liver); I used Embrel for a while and now Humira. My wife and I fight our insurance company a lot over other issues, but they do spring for the bulk of the cost of the Humira, which would otherwise be almost $20K per year (Jane, I think you quoted a higher figure a while back, so maybe this is the price the insurer negotiated with the manufacturer). Thanks to these drugs, my skin is clear and my aches are minor (years ago, I was 30% covered with red welts and my hands, elbows, and neck were painful and stiff).
But in addition to all the NIH money that paid for the research that eventually produced these drugs, I’ve contributed over the years to the National Psoriasis Foundation which also provides funding. The drug company does shell out for the testing of the specific drug, and they can lose it all if the drug turns out not to work or the side effects are too bad. But there need to be limits.
As a person with RA I have been forced to accept that the biologic treatments are priced completely out of my reach. I am confident that is the case with an overwhelming majority of RA sufferers. I can’t believe these companies make more money by charging outrageous prices to the lucky few who can afford it when they could lower the price and tap a vast number of new customers. I have no statistics to back it up but I would not be surprised if their sales volume increased by a thousand percent or more.
Then again, I suppose they’ve conducted their own cost/benefit analysis and concluded what they’re doing now is the most profitable avenue…
Hey, Rat. See, the troll booth is Open For Business.
I’m a sucker.
All of today’s proceeds go to Bob’s dinners.
Rat can share.
“Then again, I suppose they’ve conducted their own cost/benefit analysis and concluded what they’re doing now is the most profitable avenue…”
In other words, the analysts were directed to cobble up numbers that fit the profile that their bosses hacked up.
I’m definitely inclined to agree with you on the volume scenario. There are forty gazillion people out there who could benefit from such treatments…not to mention the production efficiencies gained by running larger capacities, etc…
Someone needs to do a real study on just how much drug company profit goes back into research. Embrel is no exception in having been developed on taxpayer money. My guess is the facts as to just how little development money, excluding marketing, actually comes from the private sector would be shocking. I have wondered why no one has done such a study. If these biologics are too expensive for the private sector then let’s do it non-profit/government.
These current pricing of these biologics (along with over priced every pharmaceutical on patent) is simply unsustainable. When is someone going to tell the masters of the universe that the people are running out of money? The parasites are killing their hosts..
Bob says “thank-ya, thank-ya verra much…”
Inslee is often on the correct side of the issues, but he isn’t a terribly bright guy and appears to be easily distracted.
I am frankly confused. Inslee is my representative, and in the past I have found him to be reasonable, responsive, and frankly I have never before noticed him mutilating the English language in this fashion. I cannot imagine what he was thinking, but it might be time for me to contact him again, and ask him to explain his reasoning (or lack thereof).