Healthy Skepticism Library item: 15274

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Publication type: news

Cortez MF.
Pfizer Cancer Campaign Persuades U.K. to Pay for Drug
Bloomberg News 2009 Mar 11
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=akjU6vvfvrsQ

Full text:

March 11 (Bloomberg) — For two years, Pfizer Inc. was quietly giving free doses of its expensive cancer drug Sutent as part of a campaign to help persuade the U.K. to pay for it.

Last month, Pfizer finally won. The agency that advises the U.K.’s National Health Service decided the medicine extended the lives of patients enough to justify its cost, as long as the first course of treatment was free. The campaign wasn’t publicized by Pfizer or the U.K. and was revealed in interviews with government and company officials.

The campaign cost Pfizer about 2.5 million pounds ($3.5 million) and gained the world’s biggest drugmaker an advantage over competing products made by Roche Holding AG, Bayer AG and Wyeth. Giveaways and rebates may become more widespread as companies try to persuade governments to pay for expensive medicines without slashing prices, said Chris Brinsmead, president of the Association of British Pharmaceutical Industry.

“It’s a relatively new phenomenon, and I think we’ll see more of it,” Brinsmead said in a Feb. 17 telephone interview. “Companies are trying to be enormously flexible with their pricing, but they can’t go down a track where they sell their medicines at prices way lower in the U.K. than in the rest of Europe.”

Pfizer’s victory, which came two years after European regulators approved the drug and three years after it became available in the U.S., follows successful discounting efforts by Roche, Novartis AG and Johnson & Johnson. Drugmakers are giving away medicines because they can’t slash prices in just one European Union country, given trade rules, said Brinsmead, chairman of AstraZeneca Pharma UK.

11 Billion Pounds

The creative pricing arrangements lower the overall expense for the National Health Service and improve the ratio of cost to benefit that the National Institute for Health and Clinical Excellence uses to determine if a medicine should be covered. In all, drugs cost the nation 11 billion pounds annually, about 10 percent of the total health-care bill.

“The old days of being able to price a drug for what the market will pay are gone,” said Michael Rawlins, chairman of the U.K. agency, known as NICE, at a conference sponsored by the medical journal Lancet last month. “You need to add value for the money.”

Offering free drugs doesn’t always work. NICE said March 5 that GlaxoSmithKline Plc’s Tykerb costs too much to be recommended for routine use in women with advanced breast cancer, even after the London-based drugmaker offered to cover the expense of the first 12 weeks of treatment.

Free Treatment

In 2007, New York-based Pfizer began offering the initial course of treatment for free to regional health commissioners who can pay for a drug before NICE makes a decision. The company sent letters to pharmacists and oncologists making them aware of the offer, said Rob Day, Pfizer’s director of U.K. oncology. The drug costs 3,139 pounds for an average six-week cycle, and about 800 U.K. patients have received a free course of therapy.

“Slowly but surely patients across the U.K. got access to Sutent,” Day said. “There was more evidence once the drug was on the market for a longer period of time, and that additional clinical experience impacted the decision.”

Some commissioners wait — often for years — for a final decision from NICE, depriving patients of treatment, Day said. NICE initially recommended rejecting Sutent along with Roche and Genentech Inc.’s Avastin, Bayer’s Nexavar and Wyeth’s Torisel in August. Sutent has been available in the U.S. since its initial approval in January 2006.

Novartis, based in Basel, Switzerland, agreed last year to give Lucentis to patients with macular degeneration, the most common form of blindness in the elderly, for free after the first 14 injections. The drug costs about 760 pounds per shot. If patients need the full 24 injections that were used in tests of the drug, Novartis will pick up the additional cost.

Johnson & Johnson

Johnson & Johnson’s blood-cancer drug Velcade won coverage in 2007 after the New Brunswick, New Jersey-based company said it would pay back the government for people who didn’t benefit. Patients get the first four doses of the 762.38 pound drug, then are tested to see if they’ve responded to the treatment. Those who improved continue with the drug. Johnson & Johnson provides a rebate of about 3,000 pounds for those who didn’t respond.

The U.K. agreed to pay for Roche’s lung-cancer medication Tarceva after the Basel-based company said it would charge the same price as Sanofi-Aventis SA’s older drug Taxotere.

British officials aren’t demanding concessions from drug companies and they don’t have the authority to negotiate price discounts, said Andrew Dillon, chief executive officer of NICE, in a telephone interview. When companies do offer products at lower costs, it’s sometimes enough to make a difference. Still, that’s only one component the agency considers, he said.

Adding Value

“We are prepared to make decisions that are controversial and defend them,” Dillon said. “You don’t want to pay for things that aren’t adding significant value, and you presumably want to make sure the money is spread as fairly as possible.”

Following an outcry from patient advocates, the agency re- evaluated the way it values health benefits for people with terminal illnesses, giving greater weight to increases in life span for patients expected to die within two years.

Drugs that wouldn’t be considered cost-effective for people with chronic conditions may be available to those with terminal illnesses, provided the treatment extends lives by at least three months, Rawlins said. Those patients are desperate for a few more weeks with loved ones, he said.

“We’re meeting them partway,” Rawlins said.

The larger sales potential may help companies justify price cuts or drug giveaways, said Sven Borho, a money manager for OrbiMed Advisors in New York. While the government benefits from lower costs, patients may fare worse if they get a drug that doesn’t work as well as a more expensive treatment, he said.

‘Bizarre Decision’

“The U.K. at the end of the day isn’t one of the largest pharmaceutical markets,” Borho said in a telephone interview. “Now suddenly it makes a lot more sense to offer some concessions. Pfizer doesn’t have to share the market. It’s a very bizarre decision and seems like a backroom deal to me.”

Even the companies who benefit from the new regulations aren’t always in favor of them.

“It’s important to look at the bigger picture here,” Pfizer’s Day said. “We’re considered to have one of the largest pipelines of cancer medicines in the industry, so more access to more medicine is a good thing. All valuable treatments should be available.”

Pfizer is trying to persuade NICE to recommend Sutent for gastrointestinal tumors. The agency asked the company to clarify its analysis before an advisory committee meeting on April 8.

To contact the reporter on this story: Michelle Fay Cortez in London at mcortez@bloomberg.net