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Posts Tagged ‘Pharmaceutical industry’

ACR 1I recently had the privilege to attend the annual meeting of the American College of Rheumatology. Considerable time was spent in the exhibit hall since, in addition to presenting a research paper, I was also volunteering at the booth of the Rheumatoid Patient Foundation.

The exhibit hall was overwhelming and the cavernous room was dominated by pharmaceutical companies. There were dozens of exhibits from large to small companies including, but not limited to, the following who provide many of the major biological treatments for RA:

ACR 2These pharmaceutical companies commanded the majority of the space and had professionally designed exhibits replete with multimedia presentations, large colorful signs and displays hanging from the ceiling, leather lounge chairs, espresso bars, snacks, colorful print materials, conference rooms, and an army of 20-30 sales representatives each. The rumor floating around was that these traveling exhibits cost upwards of $100,000 each in addition to the staff and other associated costs. They replace them every year. It is evident that the big pharmaceutical companies, especially those with expensive biological drugs on the market for RA, have vast amounts of funds to spend on sales and these exhibits. Based on this level of spending, it is obvious that this is big business and it is important for these companies to interact with the doctors and other health care providers who attend this conference in an effort to increase the sales of their drugs.

I enjoyed free espressos from Genentech/Roche each day – the manufacturer of my current RA medication Rituxan. One day while drinking my coffee and looking over research materials on Rituxan, a sales representative approached me obviously expecting me to be a doctor. I told her that I was a patient advocate who was actually taking Rituxan. She literally took a step backwards and told me that she was sorry and hoped I felt better. I laughed and said thanks and grabbed some print materials on clinical trail results and side effects. This awkward moment drove home the potential disconnect between the company sales force and patients. In spite of this brief and awkward interaction, the pharmaceutical companies must be commended for several things.

ACR 3Most of the research and development (R&D) behind these biological treatments for RA were paid for by the pharmaceutical companies. Oftentimes, the basic research, paid for by government or private foundation money, starts with a university-based researcher. These basic ideas lead to potential new treatments and the drug companies take over the onerous and lengthy task of developing and trying out new drugs. For biological drugs, this process may take years. And for every drug that makes it to market, there may be dozens that fail. Such development processes are extremely expensive and those costs are passed onto the patient in the cost of the drug. During the conference I was able to speak with several companies about RA treatments that are in Phase III Clinical trails (the last phase before seeking government approval). The concern is about who is going to pay for the R&D once pharmaceutical companies go over the so-called patent cliff in the next few years when their patents run out and they start to loose market share and profits.

Another patient benefit provided by the pharmaceutical companies for expensive biological treatments for RA are co-pay assistance plans. All of the companies listed above have such plans and they pay out millions of dollars each year helping patients be able afford treatments that can cost between $16,000 – $40,000 a year. This assistance, while extremely beneficial to those who need it, also demonstrates the large profit margins built into the “retail” costs of the drugs.

During the conference, I also met several consultants who are contracted by pharmaceutical companies to conduct research related to patient reactions and opinions about their products. While one may cynically infer that the companies are simply trying to increase their market share by pressuring the patients to ask for their drug, it was clear from the consultants that they genuinely want to increase the positive interactions between patients and the pharmaceutical companies in an effort to improve patient care and future drug development.

Yes, pharmaceutical companies are huge for-profit entities with a major goal of making money for shareholders. And the companies with major biological treatments for RA make enormous profits (Humira sales alone for the 4th quarter of 2012 were $2.7 billion). But they also bear the brunt of the R&D process, help with co-pays, and appear to seek patient interaction. As the patent cliff approaches, time will tell how it will impact these companies and the future of RA drug development.

ACR 4

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espressoToday was another great day at the American College of Rheumatology (ACR) conference in San Diego.

I enjoyed another espresso courtesy of Genentech/Roche who are the makers of Rituxan, one of my current RA meds. I guess I paid for that coffee many times over! In addition to working the Rheumatoid Patient Foundation booth, I attended several excellent sessions and browsed the poster presentations. Here are several keys ideas I gleaned from the day and more details will follow over the next few weeks as I digest information.

  1. Dr. Atul Butte from Stanford University gave a brilliant talk about how the information age stands to completely transform medicine and drug development.
  2. There is a “patent cliff” coming soon where many current pharmaceutical companies will loose patents on drugs (see this earlier post). The question remains about who will develop new drugs after this happens.
  3. Huge online databases may be able to help identify genes connected to diseases (diagnostics) and be used to develop new drugs (therapeutics).
  4. Patient self-assessments of RA symptoms align with rheumatologist assessments about 50-70% of the time. Questions remain about where they disagree.
  5. There are several new RA drugs in phase III clinical trials that may make it to market soon.

Another update will come after tomorrow.

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ACR name badgeWhat a first day at the American College of Rheumatology (ACR) Conference! I heard that there are over 15,000 people here and they are from all over the world. I spent the morning volunteering at the Rheumatoid Patient Foundation (RPF) booth and then attended sessions in the afternoon. I met the wonderful people from the Arthritis National Research Foundation and Arthritis Introspective. The exhibit hall was overwhelming!

If you want to receive regular updates via Twitter, I’m @livingwra.

Here’s a list of topics I plan to write about over the next few weeks as I have time to process information.

  1. Pharma companies spend lots of money at conferences (and give free lattes).
  2. Personalized medicine based on genomics and autoantibody profiles may be in the future.
  3. Biomarkers for various various signaling pathways may help select targeted kinase inhibitors.
  4. Autoimmune antibody markers other than Rheumatoid Factor (RF) and Anti-CCP are being investigated in order to better predict RA.
  5. People with positive RF and Anti-CCP tests tend to have higher levels of inflammatory cytokines.
  6. The lung is being investigated as a possible site of RA initiation.
  7. Systemic inflammation in RA contributes to depression.

More updates tomorrow and details about our paper presentation on Tuesday to follow.

ACR exhibit hall

 

 

 

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Etanercept (Enbrel) structure

Etanercept (Enbrel) structure (Photo credit: Wikipedia)

It was recently announced that Etacept was being launched in India by the generic drug company Cipla as a “biosimilar” to Enbrel (Etanercept). This new biological drug is designed to treat rheumatoid arthritis and other rheumatic conditions and is being manufactured by China-based Shanghai CP Guojian Pharmaceutical Company Ltd. It is supposed to cost 30% less than Enbrel. The approval of this biosimilar in India is not without controversy as biotechnology companies are complaining that Cipla did not follow the standards for approval (see this article).

In the United States, patent exclusivity for biological drugs is set at 12 years. This is designed to protect the expensive and time consuming processes involved in developing and testing these complex biological treatments. However, there is an approaching “patent cliff” (see this excellent article on biosimilars). Of all biologicals used for a variety of diseases, Humira, Enbrel, Remicade, and Rituxan are among the most profitable biologicals on the market. These drugs will lose their patent protection in the next few years. Once the patent cliff is reached, large pharmaceutical companies stand to lose billions of dollars in sales (see this article). The Biologics Price Competition and Innovation Act (BPCIA) of 2009 was built into the Patient Protection and Affordable Care Act (“Obamacare”) and is designed to speed up the process of approval for biosimilars. Large generic drug manufacturers are beginning to ramp up to enter the biosimilar market

Over the next few years, we will likely begin to see a slew of biosimilars for RA begin to hit the market worldwide. The potential savings to patients and insurance companies will competitively drive the market (see this article). Decisions about starting or switching to the biosimilars will need to be made. The efficacy and safety of these look-alike drugs will be questioned. This will also drive large pharmaceutical drug companies to research and develop new drugs for RA in order to maintain a competitive edge.

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I’ve been on four biological medicines over the past 3 ½ years to treat rheumatoid arthritis. I’m thankful for these complex drugs as it’s clear that they slowed disease progression. I’m currently taking Orencia. After a recent Orencia infusion, my insurance company sent an Explanation of Benefits (EOB) form showing the cost and coverage of the medicine and infusion services (see a photo of the form). The form shows that the charges billed by the infusion clinic for the Orencia was $4,425 for 1,000 mg of medicine. I’m curious about the source of this cost and can only assume that this is the cost suggested by the drug manufacturer Bristol-Myers Squibb…sort of like a “suggested retail price.” The adjustments made by the clinic were for $2,609.25 making the final cost of the drug that the insurance company agreed to pay $1,815.75. The mark-up on Orencia must be huge if the adjustment was almost 59% less than the original cost. Insurance companies obviously know the price structures to medicines and know what price pharmaceutical companies and clinics will actually accept in order to cover their costs. The clinic also charged $367 for the infusion which included the nurse and equipment. My insurance company agreed to pay $260 for these services. The total cost of this infusion was $2,076.29. A total annual cost of such infusion treatments would be $24,912. And that does not include other costs associated with my RA treatment including other medicines, doctor visits, blood tests, imaging, and surgeries.

I had already met my deductible for the year so there were no out-of-pocket expenses this time. However, pharmaceutical companies know that deductibles and co-pays can present huge financial challenges to patients and many offer co-pay assistance. Bristol-Myers Squibb provides an assistance plan where they will pay all but $5 of each infusion co-pay costs (just for the medicine, not the clinic costs). They actually sent me a debit card and loaded it with “cash” ready to be used to pay the clinic any co-pays not covered by insurance. I used this card to pay for thousands of dollars of co-pay costs to the clinic during the first six months of the year.

Biological medicines are understandably expensive because of the complex manufacturing processes involved. Such medicines also have extended patent protection over chemical pharmaceuticals in order to help drug companies recoup the extensive cost of research and development. Those costs are passed onto the patient. Every time an Orencia commercial comes on the TV, I wonder about the cost of publicity – a relatively new thing in the pharmaceutical industry.

The wild difference in charged costs versus covered costs as shown on the EOB can only make one wonder about drug company profit margins. Clearly biologicals are big business. In 2010, Amgen’s Enbrel had over $3 billion in sales just in the United States.[i] This represented 23% of Amgen’s annual sales. Humira is projected to be the world’s biggest revenue drug by 2016 with over $10 billion in annual sales.[ii]

The real cost of Orencia isn’t a mystery that I will likely solve any time soon. There are numerous business and political players involved. I’m just thankful for a medicine to treat RA, insurance coverage, and co-pay coverage by the pharmaceutical company.

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