Your tax and donated dollars at work
This chapter takes issue with the Pharmaceutical manufacturer’s claim that they charge astronomically high prices for new drugs because research is costly–that they need high profits if they are going to continue to play an important role in the development of the medical miracles of the future.
It tells the story of two recently marketed medications that improve the lives of people with metastatic prostate cancer. Each drug was created with dollars (and pounds) supplied by taxpayers and charitable institutions.
The research labs of big Pharma were not part of the process– though Pharma did pay for most of the studies run on humans, and they did manufacture, distribute, and promote the medications, both of which have huge price tags.
I got interested in the medications after I spoke with a young man while our launch was speeding through the dark waters of the Grand Canal of Venice. He finally, he explained, had enough money to bring his wife and child to Europe, thanks to a bonus he received. He had recently acquired the rights to a new drug for the pharmaceutical company he worked for. Called Enzutamide it was a treatment for prostate cancer and it was going to be big.
Prostate cancer, one of the western world’s common lethal malignancies, was found in almost a quarter of a million American prostates last year, and it killed 33,000. When advanced and widespread the disease is incurable, and if it grows in bones it can be quite painful.
Located between the bladder and the penis, a young man’s prostate is the size of a walnut. It grows as men age and eventually becomes large enough to slow or obstruct the flow of urine. Now and then a mutated cell reproduces more rapidly, lives longer, and its offspring form a cluster. Over time there are additional mutations. One of the abnormal cells can become cancerous, clone itself, and spread to other parts of the body. Its growth and spread can be slowed or halted for a period of time by interfering with the hormone that fans the fire, by eliminating testosterone.
We’ve long known that male hormones encourage prostate cancer cells to grow faster, and that surgical castration is therapeutic. The role of male hormones was firmly established in the 1940’s when University of Chicago physician, Charles Huggins, showed that metastatic prostate cancer could be controlled for a few years with surgical castration or female hormones. During the subsequent decades orchiectomy– removing the testicles—commonly kept the cancer from growing for a period of time–after which the malignancy typically started expanding.
In recent years physicians have fought the malignancy with drugs that antagonize testosterone. When the medications stop working and the disease becomes aggressive, the growth is usually stimulated by a protein inside the cancer cells, a molecule called the androgen receptor (AR).
And that’s what researchers at UCLA and Sloan Kettering tried to neutralize. Funded by the government and people who donate money to prostate cancer research, the medical teams spent years developing a drug that could block the cancer cell’s androgen receptor (AR). Starting with a protein that was known to have “a high affinity for the receptor, they spent years chemically altering it.” (Like– take a dress pattern and add one pocket or two pockets; a zipper or buttons.) They added carbons, hydrogens, etc, came up with 200 candidate molecules. They tested them in the lab, using “human prostate cancer cells that had been engineered to express increased levels of the receptor.”
Two of the 200 potential drugs seemed promising. Well absorbed and not toxic, they were effective blockers. UCLA patented the chemicals in 2006 and tested them on mice. They worked, –stopped mouse prostate cancer from growing and spreading.
In 2005 Medivation, a San Francisco based “Biopharmaceutical Company” somehow learned about the drug. Signing a license with UCLA they walked away with a majority of the patent rights. In return they agreed to fund all costs associated with the development and commercialization of MCV3100 (Enzalutamide).
The next big study was probably not funded by Medivation. It was performed in 2009 by the U.S. department of defense, and it showed that MCV3100 had “significant antitumor activity.”
In October of 2009 Medivation got a partner. They made a deal with Astellas, a large Japanese pharmaceutical company. Medivation received $655 million and Astellas, got global rights” to the drug. The two companies then financed a huge international assessment: 1600 men with metastatic disease got either the drug or a placebo. The men who took Enzalutamide on average lived 5 months longer than those receiving placebo. Treated patients had “a 37% reduction in the risk of death.”
FDA approved the use of Enzalutamide in men who had failed standard chemotherapy. The initial planned price of Enzalutamide was $7450 a month— $59,000 for 8 cycles — $89,000 a year.
In 2014, based on a new study, the FDA approved the use of Enzalutamide as the first drug given to people with metastatic disease. Patients didn’t have to first fail treatment with something else. The new indication meant patients would live longer after they started therapy. They would now ingest more pills and buy more medicine. A year of therapy in the U.S. would cost $129,000.
Astellas had international rights and sold the medicine for a lot less in other countries. A 40 mg pill, for example, was sold in the U.S. for $88. Medicare paid $69. And the price for the same product in Canada, France, and the U.K, was $20, $27, and $36. In the two years between 2012 an 2014, Medicare’s Enzalutamide cost went from $35 million to over $440 million annually. The price Americans paid troubled some. There were editorials and the obligatory belt-way outcry.
UCLA owned over 40 percent of the drug’s patent, and in 2016 sold their residual rights to Royalty Pharma for $1.14 billion—paid over many years. They then settled for an up-front cash payment of $520 million.
In 2015 Astellas sold $2.2 billion of the drug. The following year Pfizer bought Medivation for $14 billion, and in the first quarter of 2017 sold $131 million worth of the medication.
In the West it seems you almost have to get industry involved if you want to get a drug tested, approved, produced, distributed, and used. Not that UCLA and Sloan Kettering didn’t know how to run a controlled trial. They did. But pharmaceutical companies have big bucks and are better equipped to coordinate the testing of over a thousand people in 15 countries. They are experienced at moving drugs through the FDA and getting them approved promptly and efficiently. And, of course, they know how to market.
Once corporations are involved, the price being charged has little to do with the cost of creating a drug. In the case of Enzalutamide, before they could make a profit Pfizer had to sell enough high priced medication to recover their $14 billion investment.
In the Enzalutamide case many were happy. UCLA got an infusion of cash. The poor guy with prostate cancer got an extra 5 months of life, and according to Astellas, he didn’t have to go into bankruptcy to be treated. ”80% of patients with Medicare or private insurance have a monthly co-payment of $25 or less. 2,000 men with poor or no insurance and household incomes of $100,000 or less received Xtandi free.”
The system we’ve created is not really “capitalism” and it’s not fair to call it “corporate welfare”. It allowed the lead researchers to claim a”37.5% stake in the drug’s royalty interest.” Private industry, investors, the Howard Hughes Foundation, and Medivation made money.
Few seemed troubled by the fact that a drug developed with public and donated money ended up enriching a few and selling for a pretty penny—a price that was usually paid by a needy taxpayer’s private or public insurance.
Bernie Sanders claims that in 2014 nearly one in five Americans between the ages of 19 and 64–35 million people – decided to NOT fill their prescriptions. They decided the drugs cost too much.
At the same time spokesmen for the pharmaceutical industry were repeating their mantra: the high costs are needed to support medical research. If we want to cure Alzheimer’s and cancer we need Innovation.
Enzalutamide’s chief competitor, Arbiraterone (Zytiga), was created at Cancer Research UK, a charitable fund with its own research institute. In 2012 an anonymous donor gave the organization ten million pounds, (13 million dollars) and asserted that “if you do what you’ve always done, you’ll get what you’ve always got.” Promoting scientists who “think differently,” the huge concern finances “the work of more than 4,000 researchers, doctors and nurses throughout the UK, and supports over 200 clinical trials and cancer related studies.” The drug its scientists created, Arbiraterone (Zytiga), is a bit cheaper than the U.S creation, but for years it was pricey and not really affordable to a guy without good insurance.
Here again Pharma wasn’t brought in until the medication was created and was ready to be tested on humans. And once more the enemy was testosterone. Researchers wondered if the cells had lost their dependence on male hormones—or if they were responding to testosterone made somewhere in the body. What would happen, they asked, if a drug totally impeded a person’s ability to make male hormones–androgens?
The body makes male hormones and cortisone from cholesterol. (Raisins and wine are made from grapes.) Both use an enzyme, CPY17, for the conversion, and the reaction can be blocked by the antifungal agent, Ketoconazole. All this was known.
Ketoconazole is toxic and in patients with prostate cancer it’s not a useful drug; so investigators decided to modify it. Using three dimensional models an Institute of Cancer Research (IRC) team (working in a unit of Cancer Research UK) studied a number of compounds, and they eventually found one that worked. It didn’t seem to be toxic and it “specifically and irreversibly” blocked CYP17.
The “team” filed a patent and licensed the drug to a German Pharma company, Boehringer Ingleman. Phase one studies showed the drug blocked androgen and cortisone production in people, but the pharmaceutical company’s scientists believed that late stage prostate cancer no longer needed male hormones to grow. Feeling they didn’t want to spend money on a lost cause, Boehringer returned the drug’s license and IRC started over.1
Arguing that they wanted to get the drug into needy people’s hands as soon as possible, the IRC next assigned the rights for commercialization to publically traded BTG, a UK-based healthcare company. BTG, in turn, licensed the product to Cougar Biotechnology. And Cougar “began to develop a commercial product”. Studies proved the drug worked, helped cancer patients. In May 2009 Cougar was acquired by Johnson and Johnson for about $1 billion. Two years later the FDA approved arbiraterone’s use in combination with prednisone—a form of cortisone. (In addition to blocking the body’s production of androgens, Arbiraterone blocks the body’s ability to produce cortisone, a hormone the body needs.) Arbiraterone was approved for use as a treatment for late-stage prostate cancer in men who have already received standard chemotherapy. Called Zytiga, it initially sold for $5000 a month in the U.S., and it’s not a cure. After a mean of 8 months the drug stops working or the average patient has died. Thus the cost of treating a person was averaging about $40,000.
In the UK where it was developed by a charitably funded organization, the drug is marketed by Janssen. Its original cost was 2930 pounds –$3820 a month, a price that British regulators (NICE) decided was not cost effective. The National Health Service wouldn’t pay. The company then negotiated. The government was willing to walk away so negotiations worked. The U.K. got a “deal.” The NHS subsequently paid 2300 pounds ($3000) a month “for the first 10 months of therapy. For people who remain on treatment for more than 10 months, Janssen agreed to rebate the drug cost of abiraterone from the 11th month until the end of treatment.”
By 2019 two additional very expensive drugs for prostate cancer: apalutamide and darolutamide—had joined the fray, and the U.S. price of “full-dose abiraterone” had risen to $10,000 per month. But a $2800 monthly generic form of the medication was now available; and a quarter of the initial dose of arbiraterone was showing “similar benefits and similar pharmacokinetic and pharmacodynamic effects.2”
“A decade ago cancer drugs cost around $5000 per month; that has now doubled to more than $10,000 per month. I think (companies) charge what they think they can get away with, which goes up every year,” Peter Bach, MD, Sloan Kettering, New York.
—-Is a pharmaceutical company really needed when we want to effectively manufacture and distribute an important drug? The answer seems to be yes.