Ask your cousin in Coral Gables, and he will tell you that prescription drugs are a red-hot bargain in Canada, compared to the USA. In fact, you won’t have to ask; he’ll probably bring it to your attention the next time he asks you to come down for a visit, and please bring along a six-month supply of Lipitor.
Here’s what isn’t a bargain for Canadians: generic drugs. The no-name equivalents often sell at Shoppers’ Drug Mart in Niagara Falls, Ontario for several multiples of what they cost at Sam’s Club in Niagara Falls, New York state. Since these days most prescriptions are routinely filled with generics, the higher cost of knock-off drugs here leads to Canadians paying more on average per capita for pharmaceuticals than is the case in most jurisdictions. Payers have just twigged to that reality. Several provinces are now seeking to adjust formulary pricing on generics down to something closer to the US level. (Knock-off drugs generally cost 70 per cent of their branded equivalent in Canada, whereas they sometimes sell for only 10 per cent of the brand-name price south of the border.)
The investigative television program “W-5” aired a program last night on the CTV network, which began with the preceding discovery that Canadians pay too much for drugs. Then, the line of inquiry charged off in exactly the wrong direction, as reporters rounded up all the usual corporate suspects from the branded side of Big Pharma. The generics goniffs got a pass. The research-based drugbiz, in contrast, has been just about kicked to death by investors (who don’t think the industry is anywhere near profitable enough), legislators in North America and Europe (who think the industry is too profitable), courts, litigants and the global media. After all that, having W-5 show up to do their reportorial hatchet job is little more than the arrival of ants, after the picnic has been interrupted by marauding Visigoths.
Everyone wants newer and more effective medicines; no one wants to be associated with any risk in their development or use; no one really wants to pay for them after they’ve been brought to market. This situation is by no means anything new or interesting.
And yet, the W-5 process of laying out those three simple points made for an hour of bathos, pointless confrontation, scrambled assumptions and misdirection, ending with head-spinning delirium. Presiding over this slapstick was Victor Malarek, once a respected and feared print journalist back in the glory days of The Globe and Mail. These days, The Globe and CTV are under joint ownership, and Victor has taken his pugnacious, relentless act to the small screen, where it just doesn’t work. Bulky and bug-eyed, he physically resembles funnyman Tony Rosato from the old SCTV parodies, and comes across as if he wandered over from a satirical program being lensed in the adjacent studio. His habit of seizing on a barely-in-context word uttered by an interviewee and bitterly spitting it back (Subject: “Blah, blah, blah, profitable…” Victor: “Profitable!”) is the stuff of inspired comedy, accentuated by his deadpan, curled-lip delivery. Victor’s staged disdain is hilarious, all the more so because he seems oblivious to his comedic effect.
But when Victor the Inflicter sets out to connect all the dots: Whoa, Mama. He begins his trek in Surrey, B.C., where a terminal multiple myeloma patient has been denied access to Avastin, the efficacious and expensive oncology drug. The local formulary declines to pay for the therapy, which costs $40,000 per regimen. The patient, a personable chap and a highly sympathetic figure, volunteers to pick up the cost himself, but is somehow prohibited from doing so by inexplicable and outrageous regulations.
It is easy to suggest what might have been done for this unfortunate father of two, but it emerges that he died of the disease after the opening segment had been filmed. Anyone who has lost a family member or loved one to late-stage cancer will recognize the sorrow, and tragic inevitability, of this outcome, but the W-5 producers seem intent on exploiting the man’s death in order to advance their narrative. It is never easy to watch a young daughter eulogize her father during a funeral ceremony, but it is a disgraceful intrusion to use a child’s pain to manipulate a story-line for public viewing, particularly when the tale is so meandering.
The Avenging Victor takes leave from the chapel, tugging behind his director and film crew, and makes his way toward the supposed villains of the piece: who are strangely not those behind the Byzantine process that impedes getting therapies to the people who need them, but the very creators of the life-giving medicines. Encountering Russell Williams, the normally unflappable head of the drugmakers’ lobby, he demands to know why drugs are so expensive. Well, says Williams, you can begin with the idea that they cost upward of a billion bucks per compound to develop.
That figure strikes Sceptic Vic as perhaps a tad high, and he finds some knowledgeable parties to refute the number. The US National Institutes of Health puts the figure at “hundreds of millions,” but what do they know? Victor finds one tweedy professorial type who guesses it’s probably closer to one hundred million. Dr. Marcia Angell, the former New England Journal of Medicine editor, turned health policy gadfly, flashes her faculty discount card and reliably low-balls the estimate down to $80 million.
Dr. Angell, who really ought to stick to her lab, seems not to have ever read the business section of the Boston Globe, where she would quickly learn the marketplace value of a typical promising project in Phase III development, prior to regulatory approval — and it sure ain’t $80 million. Her guesswork is wrong, if not ridiculous. But what no one tells Victor, and what he therefore fails to convey to his audience, is that perhaps four out of five of these nine- or ten-figure expenditures ends in failure to commercialize, in which case the exorbitant fiscal outlay reaps an end reward of nada.
Drugs are expensive because the process of inventing them is insanely costly; beyond which, investors want to see a return on their capital. Whether we’re talking about a billion, a couple of hundred million, or any sum in between, for every whopping investment that results in a marketable product, there are numerous others that represent money down the drain. The rule of thumb is that for every 5,000 compounds being investigated in test-tubes, five make it to clinical trials on humans, and one is eventually approved for sale. And the very skittishness of regulators to approve new drugs that may not be as safe as Heinz tomato soup may be attributed to the public’s own aversion to risk. If you happened to flip from CTV to any of the US networks carried on cable television, inevitably you’d have seen at least one advertisement from any number of legal firms inviting you to sue a drugmaker. These commercials are aired during every break in the nightly Seinfield re-runs. Litigation routinely costs Big Pharma tens of billions of dollars in payouts. There is much more to this side of the business than anyone would want to know about casually, but it’s undeniably another reason why grandpa’s pills can cost a fortune.
Dr. Angell advanced the idea that it’s somehow really the public that pays for pharmaceutical research, since many of the better university science departments maintain chemical laboratories. I couldn’t follow her line of thinking, although it’s correct that many governments offer incentives and tax abatements to attract R&D activities, notably from pharma and biotech. However, while that didn’t seem to be her point, it was good enough for Victor, who ejaculated his trademarked sputter, “So the public actually pays twice!” By George, you’ve got it, Dr. Angell’s expression seemed to convey.
Perhaps it was she who hepped Victor to an article by York University’s Dr. Joel Lexchin, in which he calculates that marketing costs are roughly twice what drugmakers spend on research. That sends Victor into an even higher dudgeon, as he trots out the example of Celgene’s thalidomide (Thalomid) to illustrate exactly how much the drug business stinks. When yet another university academic uses the expression “exploitative pricing” to describe the $100,000 annual cost of a Thalomid regimen, Victor blurts out, “Exploitative!”, as though he had been searching for months for exactly the right phrase to describe his own sensationalistic style of TV journalism.
Still muttering “Exploitative!”, he and his camera-carriers pounce upon the Canadian General Manager of Celgene in the company’s parking lot. By coincidence, I had been introduced to this very same fellow, Kevin Leshuk, only 72 hours prior to the broadcast, at an industry conference where I was co-chair. Leshuk warned the congress delegates about his upcoming TV appearance, and in doing so used two or three times his allotted speaking time to describe the occasion — which earned him few sympathizers, as the session dragged on into overtime.
However, mano a mano with Vic, I have to say Leshuk looked pretty good. I don’t know how many kingpins of the biotech industry sport goatees and carry backpacks, but this one maintained some poise in the heat of an ambush interview, which should chart the way for further career advancement. I was impressed with the information that Celgene gives away 60 per cent of their Thalomid inventory on compassionate grounds. Similarly, the explanation that the profits from this 60-year-old compound are used to develop improved therapeutic agents made some limited degree of sense.
Not to Vic the Brick-thrower. Having unsuccessfully mugged Leshuk, he high-tailed it to Nova Scotia, where the health minister was unable or unwilling to pay the price of Thalomid, ironically required by one of her university classmates. Celgene evidently proposed that the patient could have the drug for nothing — but in another irony, the patient apparently declined the offer, insisting that what he needed was lenalidomide, a newer generation of product the company developed, funded by the very revenues they had generated from Thalomid.
To repeat: Everyone wants newer and more effective medicines; no one wants to pay for them. This is entirely understandable, but it is also what you’d call a logical cleft-stick. Your heart bleeds for our countrymen in need, and you want to know that you will be looked after when your day of need arrives. But the field of study known as Pharmacoeconomics is as complicated as it sounds. Victor Malarek, for all his alleged hard-hitting proclivities, disregards the subtleties and the accurate points of comparison, because he is in the entertainment business, just as surely as was SCTV comedian Tony Rosato.
I’m reluctant to break it to Victor, but at 100 grand per year, stunning as that price-tag may be, Celgene’s product happens to cost a mere one-fifth of some of the most recently approved biotech cures. The mathmatics should be of huge concern, but the problem won’t be addressed by demonizing the organizations that are putting their own dollars on the lab-bench to fund research. (When Victor condescendingly draws attention to these organizations as “foreign companies,” you really question his priorities. As if any sick person seeking medical attention would ever consider for a second whether the location of the head office of the therapy provider is in Calgary, Cleveland or Constantinople.)
Even a man on a well-paid mission to embarrass corporate big-wigs would have to acknowledge that it is cheaper to provide statins and antihypertensives to patients, than it is to perform cardiac surgery, or provide lengthy stroke rehabilitation. Anyone will see that it is less expensive and far more humane for the health system to offer SSRIs to the severely depressed, or anti-psychotic drugs to those with bipolar disorder, than it is to pay for their lifetime institutionalization. I would not know how to crunch numbers comparing a hundred-thousand dollar drug regimen to a nine-month stay in an oncology unit or hospice, lost workplace productivity and other factors — but my job doesn’t demand any special mastery of the formulae of Pharmacoeconomics.
However, don’t think that these commonly recognized drug classes — statins, SSRIs — entered the public vocabulary because crabby editors and tetchy academics instantly recognized they might become worthwhile public expenditures. We learned about them because they saved lives: possibly your life, or that of someone you care about. It’s a free country, to some extent, and you can go right ahead and conclude that the prices of some drugs are way too high. You might not be wrong. But just one time, one time out of the many times you hear gripes about Big Pharma and drug costs, it would be nice if some contrarian would just once throw in the following concession: “I’m glad of what they’re doing to save the lives of Canadians.”