logo


no avatar

PENNING: Drug company prices are out of line and profit-driven

• Mar 14, 2019 at 3:00 PM

My wife and I have a drug problem. We’re not hooked on any form of opiate or recreational marijuana or street drugs like cocaine or meth. We’re talking about a legally prescribed and life-saving drug you likely have never heard of called Herceptin.

Herceptin is a drug that came out in about 1999 and is life-saving for women who have a form of breast cancer known as HER-2, which means that they have an abundance of a certain protein that can cause tumors to form. Other forms of breast cancer are caused by estrogen or progesterone.

I remember first hearing about this drug. It was a Saturday afternoon in 2012 shortly after my wife had been diagnosed with cancer. She was getting an MRI in the hospital, and the nurse practitioner in the breast surgeon’s office, who has become our friend, came across the street from the cancer center to find me and give me a brochure. It explained all about this drug, and how it helped women with my wife’s form of cancer.

Basically, Herceptin keeps the level of HER-2 in a woman’s body in check. It reduces tumors and prevents new ones. Most women will take this drug by infusion for one year. After that, the body is said to be “reset” in terms of HER-2.

But, since my wife was Stage 4, the protocol was to take Herceptin indefinitely. We were a little daunted by that. But the nurse practitioner pointed out that we were fortunate. Before this drug was on the market, women with my wife’s condition would be told to get their affairs in order.

So, we were grateful that the drug had been developed. And we were thankful for companies like Genentech, who developed and makes the drug. But recently, we encountered the problem that I mentioned. The problem is cost, and the real motivations of drug companies, which seems less about compassion and more about profit.

I mentioned that the drug first went on the market in 1999. If you’re savvy about patent law, you know that 2019 is 20 years hence, and the patent on this drug is soon to expire. This means other companies will be able to manufacture generic versions of this drug once the patented formula is public. Since Herceptin is a “biologic” drug, meaning it is made from live cells, the generic version would be a biosimilar. So, it’s a little more complicated than just getting a cheaper pill or powder form of a drug. Nevertheless, a company called Mylar has been approved by the FDA to market its biosimilar version of Herceptin, called Ogivri.

Normally, generic drugs are cheaper, which is good for all of us, whether we pay for our medication or it is covered by insurance. Cheaper medicine keeps the costs down for the health care system.

Companies who research and invent and manufacture drugs have had 20 years to make their profits. Indeed, Genentech made $6.7 billion off Herceptin globally in 2016 — and, in the U.S. alone, $2 billion in 2017, according to an article in Business Insider.

But that is not enough for Genentech. My wife, who receives a Herceptin infusion every three weeks, noticed an anomaly on our insurance company “explanation of benefits” statements last fall. In addition to the large charge for Herceptin, more than $10,000 per dose, there were additional charges for each Herceptin dose of another several thousand dollars.

Medical bills are in annoying codes that are nearly impossible to understand (don’t get me started on that), so she called the insurance company to alert them to a potential costly error. What we found out was even more disturbing.

It turns out that Genentech, aware of the imminent loss of parented profits, had changed its packaging. So, where in the past if my wife needed 324 milligrams, she would have exactly that mixed in the pharmacy and dispensed from a bag on a pole. Now the company pre-packages 100-milligram vials. So, my wife gets three of those, and then a fourth for the additional 24 milligrams of her dose. The excess 76 milligrams are just thrown away, and that’s what the extra charge was for.

Genentech is charging for throwing away their product that, because it’s a biologic, can’t be stored and given to another patient.

The insurance company seemed powerless to address this. We asked our oncologist why the packaging changed, and he was wise and blunt: “profit.”

In recent months, I’ve read articles about how all pharmaceutical companies are raising their prices in 2019 by 10 percent. It didn’t say why, it just seemed they were doing what they thought the market would bear.

Another article pointed out that the drug company Pfizer, known for the little blue pill but who never made cancer drugs 20 years ago, is now making 17 cancer-related drugs. The reason? There’s a good market there.

It’s no wonder that ehealthinsurance.com reported that average individual health premiums have risen 99 percent since 2013, the year before Obamacare was enacted. A large part of the price increase, according to a former student of mine who works for a major insurer, is the cost of prescription medicines.

In recent weeks, the CEOs of major drug companies testified before Congress. The CEOs of middlemen companies, pharmacy management companies, are up next. I have not been satisfied and have little confidence that Congress will be able to rein in the costs of drugs.

My wife and I are grateful that she is alive. This drug is most likely the reason she is doing relatively well considering the daunting diagnosis nearly seven years ago. But we also are concerned that the company, and companies like it, don’t seem to have her life in mind as much as their own profits.

Until that changes, we all have a drug problem.

A collection of columns by Tim Penning, Ph.D., is in the book “Thoughts on Thursdays,” available at The Bookman.

Recommended for You

    Grand Haven Tribune Videos