Dr. Peter B. Bach: "What Soaring Drug Prices Mean for Patients," 9.3.15

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Dr. Peter B. Bach's presentation from "What Soaring Drug Prices Mean for Patients," 9.3.15 http://www.reportingonhealth.org/content/what-soaring-drug-prices-mean-patients

Health & Medicine

Some questions about high
drug prices
Peter B. Bach, MD
Center for Health Policy and Outcomes
Memorial Sloan Kettering Cancer Center
bachp@mskcc.org
@peterbachmd
September 3, 2015

100-foldpriceincrease
Rising prices of cancer drugs

Cost for an additional year of life goes up
each year in cancer

Prices are at the level
needed to drive any
innovation!

The Market for ALK Inhibitors:
Appropriately Priced? Or frothy?
4 ALK Inhibitors are
currently in preclinical
development
7/2014: Latest
Alectinib trial
begins
6/2014: Latest
NMS-E628 trial
begins
3/2014: Latest
AP26113 trial begins
1/2014: Latest PF-
06463922 trial begins
7/2013: Latest CEP-37440
trial begins
10/2012:
Latest TSR-011
trial begins
6/2012:
Latest X-396
trial begins
4/2014: Zykadia
approved by the FDA
8/2011: Xalkori
approved by the FDA
Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013
Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014

Okay, prices are high.
But at least they make
sense!

Two drugs (peter’s crude assessment)
Farydak (Feb 2015 approval) Ibrance (Feb 2015 approval)
Price: $10,035 per month
•FDA path: Squeaked through (voted
down by ODAC advisors 5 to 2).
• Use: 3rd line multiple myeloma
•(11,000 deaths per year)
• Benefit: Increased PFS by 5 months,
but not overall survival
• Tolerability: Severe side effects with a
“Black Box”
Price: $9,978 per month
•FDA path: Accelerated approval
from impressive Phase 2 data
•Use: 1st line metastatic breast cancer
(larger health problem, 40K deaths/yr)
•Benefit: Increased PFS by 10 months,
survival data pending
• Tolerability: Moderate side effects

Sure Prices are High, but the
market still works

Product prices rise even as:
a) competitors enter the market
b) new indications are added
Gleevec Tablet
Year
2004 2006 2008 2010 2012 2014
Averagecostperday($2014)
0
50
100
150
200
250
Nilotinib approved
Dasatinib approved
Multiple additional
indications approved

The reason why US Pharma is such
a great sector?
Because we pay high prices in the
US.

Top 10 Pharma
(based on 2014 sales) 2014 Sales % US sales in 2014
1. Novartis (Switzerland) $58 bn 32%
2. Pfizer (US) $49.6 bn 40%
3. Roche (Switzerland) $47.5 bn 43%
4. Merck (US) $42.2 bn 41%
5. Sanofi (France) $38.1 bn 34%
6. GSK (UK) $37 bn 32%
7. Johnson & Johnson (US) $32.3 bn 54%
8. AstraZeneca (UK) $26.1 bn 39%
9. Gilead Sciences (US) $24.9 bn 75%
10. Bayer (Germany) $22.4 bn 51% (US + Canada)
11. Teva (Israel) $20.3 bn 54%
12. Abbott Laboratories (US) $20.3 bn 30%

Who suffers?
• Taxpayers
• State Medicaid programs
• TheVA health system
• And . .. Patients

Or what about prices based on ‘value’?
• Who cares about value?
– Patients: Benefits and side effects of
treatment
– Academia and Industry: Promote innovation
and risk-taking, support the costs of research
– Society:Target rare disease, tackle public
health problems

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http://www.drugabacus.org/

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