“Can You Patent the Sun?”


2019/05/21 08:01
我每天都可以访问太多文章,以至于我无法阅读所有文章,更不用说每个主题了。这一特殊产品来自于JessicaDavisPlüss的SWI或Swiss Info High Pharma Margins Squeeze Health Systems。话题?根据被称为RTS的瑞士公共电视台,癌症药物价格迅速上涨,利润率超过价格的80%。我觉得有趣的是瑞士人正在讨论如何处理癌症药物公司,药物的定价,等等

I have access to too many articles on a daily basis to the point of where I can not read them all much less write on each topic. This particular one emanates from SWI or Swiss Info High Pharma Margins Squeeze Health Systems by Jessica Davis Plüss. The topic? Cancer drug pricing is rising rapidly and margins are exceeding 80% of price according to Swiss Public Television known as RTS. I find it interesting the Swiss are discussing what to do with cancer drug companies, the pricing of the drugs, and still maintain a good relationship. This is also relevant to non-cancer related drugs.

我每天都可以访问太多文章,以至于我无法阅读所有文章,更不用说每个主题了。这一特殊产品来自于JessicaDavisPlüss的SWI或Swiss Info High Pharma Margins Squeeze Health Systems。话题?根据被称为RTS的瑞士公共电视台,癌症药物价格迅速上涨,利润率超过价格的80%。我觉得有趣的是瑞士人正在讨论如何处理癌症药物公司,药物定价,并仍然保持良好的关系。这也与非癌相关药物有关。

As you must know by now, healthcare pricing is controlled in Europe. Pricing and costs are more of a complaint in the US and still not an actionable item where Congress takes notice and “actually does something.” Some examples include cancer drugs such as Rituxan, etc. and far more common drugs such as Humalog, Vimovo, and the more familiar one in EpiPens (epinephrine autoinjector).


What About costs?


EpiPen is a good example of out-of-control pricing.


In 2007 Mylan acquired the EpiPen brand from Pfizer; however, Mylan did not acquire the Pfizer subsidiary which manufactures EpiPen. CEO Heather Bresch reported to a congressional committee Mylan pays $69 per two-pack to the Pfizer subsidiary Meridian Medical Technologies. The price of a two-pack of EpiPens is ~10 times its cost.

2007年,Mylan收购了辉瑞公司的EpiPen品牌;然而,Mylan没有收购制造EpiPen的辉瑞子公司。首席执行官希瑟布雷什(Heather Bresch)向国会委员会报告说,迈伦每两包装售69美元给辉瑞公司的子公司Meridian Medical Technologies。两包EpiPens的价格是其成本的10倍。

To calculate the costs of manufacturing a product, one does not need to be an engineer or a PhD. Knowledge of the overhead, process, materials, and labor allows an astute and experienced layman to calculate the cost. Even so in 2016, a Silicon Valley engineering consultancy did perform an analysis of an EpiPen components and estimated the manufacturing and packaging costs at about $10 for a two-pack.


Whether the cost is $10 for a two pack or $34.50 for one EpiPen as Mylan claims, the costs do not vindicate wholesale price increases going from $100 in 2009, to $265 in 2013, to $461 in 2015, and finally $609 in 2016. With insurance some still have a sizeable co-pay. The list price at a CVS pharmacy is $733 for a two-pack. In some cases, a manufacturer will issue a coupon to a buyer which can be used at the pharmacy and shuffles the costs to the insure company leaving the user with a smaller co-pay. In the end, someone is still paying an out-of-control price.


The costs reflected in the attached chart come from Heather Bresch’s testimony to Congress. $334 of the $608 is paid out to pharmacy benefit managers (third-party administrator of prescription-drug programs for end payers, such as private insurers, and Medicare Part D plans), insurance companies, wholesalers, and pharmacy retailers leaving Mylan with $274 after rebates and fees. Deduct the cost of $69 of a two-pack paid to Meridian, and supposedly Mylan is left with $205 for each two-unit injector. After the company deducts expenses for research and development, sales and marketing, regulatory compliance, distribution and various access programs, profit drops to $100 per two-pack. As stated Mylan proposed cost structure is being challenged when compared to the expected costs of manufacture. WSJ claimed Mylan improperly assigned a tax to the expected profit which decreased Mylan’s profit by $66.

附图中反映的费用来自Heather Bresch对国会的证词。 608美元中的334美元支付给药房福利管理人员(最终付款人的处方药计划的第三方管理员,如私人保险公司和Medicare D部分计划),保险公司,批发商和药房零售商以274美元的价格离开Mylan折扣和费用。扣除向Meridian支付的两包装中69美元的费用,据推测,Mylan每两个单位注射器的费用为205美元。在公司扣除研发,销售和营销,监管合规,分销和各种访问计划的费用后,每两包的利润降至100美元。如上所述,Mylan提出的成本结构与预期的制造成本相比正面临挑战。 “华尔街日报”声称,Mylan对预期利润不恰当地分配了税,这使得Mylan的利润减少了66美元。

“Can You Patent the Sun?”


Times have changed since Jonas Salk and Albert Sabin developed their polio vaccines and purposely did not patent them. As reported by a Forbes analysis, by not patenting their vaccines each inventor/researcher lost out on profits in the $billions.

自Jonas Salk和Albert Sabin开发脊髓灰质炎疫苗以来,时间已经发生了变化,故意没有为他们申请专利。正如福布斯分析报道的那样,通过不为他们的疫苗申请专利,每个发明家/研究人员都失去了数十亿美元的利润。

Jonas Salk had a simple answer when asked why he did not patent his vaccine; “Can you patent the sun?” Salk was not called the “Father of Biophilosophy” without reason . . . a philosophy taking in epistemological, metaphysical, and ethical issues in the biological and biomedical sciences.

当被问及为什么他没有为他的疫苗申请专利时,Jonas Salk有一个简单的答案; “你能为太阳专利吗?”Salk没有理由被称为“生物哲学之父”。 。 。一种哲学,它涉及生物学和生物医学科学中的认识论,形而上学和伦理学问题。

Before he died, Salk was attempting to create an AIDS vaccine which he would not have patented either. Times have changed since the Polio vaccine.


As one commenter said, Salk could have patented his discovery; but his research was federally funded and all of his profits would have gone to the Federal Government. Research as tied to business interests has gone in a different direction from where Jonas Salk began as the law has changed. In place of social responsibility, a profit motive has taken hold.

正如一位评论者所说,Salk可以为他的发现申请专利;但他的研究得到了联邦政府的资助,他的所有利润都归于联邦政府。随着法律的变化,与Jonas Salk开始的方向不同,研究与商业利益密切相关。取代社会责任,利润动机已经成为现实。

Value Analysis


Novartis CEO Vas Narasimhan: “Cell and gene therapies are bringing about a new era of cancer medicines going beyond ‘just improving lives and are saving them.'” continuing; The new therapies are challenging the traditional model for paying for medical treatment and the industry is divided on this approach. Pricing for these one-time usage therapies are to be based on four key measures of value – the improvements they offer to patients both clinically and in terms of their quality of life, and the resulting benefits to the health-care system and society. As pointed out in the Swiss Info article, based on value to the patient, pharmaceutical companies believe they are justified in getting back $14.50 for every dollar invested in bring a new drug to market.

诺华公司首席执行官Vas Narasimhan说:“细胞和基因疗法正在带来一个新时代的癌症药物超越'只是改善生活并拯救它们'。”新疗法正在挑战传统的医疗支付模式,行业对这种方法存在分歧。这些一次性使用疗法的定价基于四个关键的价值衡量标准 - 它们在临床和生活质量方面为患者提供的改善,以及由此带来的对医疗保健系统和社会的益处。正如瑞士信息中的一篇文章所指出的那样,基于对患者的价值,制药公司认为,将每种新药投入市场可以获得14.50美元的回报是合理的。

Pharmaceutical companies have noted four industry determinants (page viii-ix) of setting pricing as detailed in WHO’s “Pricing of cancer medicines and its impacts to the setting of medicine prices” technical report.


(1) Costs of R&D; Prices must account for the R&D costs of the approved medicine and the expenditures from investigating drug candidates for which marketing approvals did not occur, failed attempts, and the cost of capital.


(2) Costs of production and expenditures relating to product commercialization; Costs of production are operating expenses related to commercialization support, regulatory compliance, manufacturing, distribution, marketing and sales, and general administration. The marginal costs of production refer to the added costs of producing an additional unit of product.


(3) Value of medicine to patients, health care system and society; Besides setting prices according to the value of medicines, pharmaceutical companies often place more emphasis on setting prices according to income expectations or they attempt to reach their profit goals by setting prices as high as the market will bear.


(4) Sufficient financial returns to incentivize future R&D programs. The industry justifies prices of medicine by stating the return on investment needs to be sufficient to incentivize the discovery of future medicines and notes 20% of its revenues were re-invested into R&D.


A little bit of a discussion. Point 1 is stating the industry must account for failures, as well as the successes, and changes to the initial product. Point 2 is a capacity remark to which I would say if properly planned the capacity would already be there and the increase in one additional unit is minimal. No one plans to 100% of capacity. Point 3 assesses the value of human life by assigning a price to it with regard to the medicine or “what would you pay for a drink of water in the desert when there is none available for hundreds of miles.” Point 4 is new research and states we need to be able to have revenue to invest in it after expenses. I would question how much is actually needed.


And the other 80% which is now attributed to profit margin?


Typically Pharma has defended new product pricing with a justification of large investments in research and development and numerous clinical trials which can be successful or failures. Indeed CEO Vas Narasimhan pretty much says the same in bringing a product to market and also calls on additional criteria as justification for the increased pricing.

通常,制药公司为新产品定价辩护,理由是在研发方面进行大量投资,并进行大量可能成功或失败的临床试验。事实上,首席执行官Vas Narasimhan在将产品推向市场时也说了同样的话,并且还要求其他标准作为增加定价的理由。

As linked to by Swiss Info, the World Health Organization (WHO) in reviewing the high prices for cancer drugs found the pricing strategy resulted in margins multiple times higher than just the R&D costs and even so when Distribution and Manufacturing costs were included in the analysis. For example, a vial of the breast cancer drug Herceptin costs approximately CHF50 to produce. In 2018 a vial was sold for CHF2,095 in Switzerland or 42 times its manufacturing cost. According to the WHO report ; for every dollar invested in cancer research, pharmaceutical companies earned on average $14.50 (CHF 14.50) in revenue.

与瑞士信息相关联,世界卫生组织(WHO)在审查癌症药物的高价格时发现定价策略导致利润率比研发成本高出数倍,即使分配和制造成本包含在分析中也是如此。例如,一瓶乳腺癌药物赫赛汀的成本约为CHF50。 2018年,瑞士的小瓶售价为2,095瑞士法郎,是制造成本的42倍。根据世界卫生组织的报告;对于投入癌症研究的每一美元,制药公司的收入平均为14.50美元(14.50瑞士法郎)。

The calculations of the cost data (chart) for two specific cancer drugs showed the final pricing for the two top treatments bear little relationship to R&D and/or Manufacturing costs. Swiss TV station’s (RTS) exposé revealed the pricing for two of Roche’s top cancer treatments are far more than just a recovery of R&D, distribution, and manufacturing costs. Herceptin costs are approximately CHF50 ($50) to manufacture and sold for CHF2,095 in Switzerland in 2018 which is 42 times the manufacturing cost. In terms of cost recovery, Herceptin has earned Roche CHF82.8 billion (85% profit margin) over 20 years or more than enough to recoup an investment and provide for R&D. A study of Novartis’s Glivec by the University of Liverpool revealed similar margin excess.


Roche media relations team member Ulrike Engels in defending the pricing strategy suggested the RTS calculations based on just Cost plus Margin data shows a fundamental misunderstanding of how prices are determined. Similar to what was stated by Novartis CEO Vas Narasimhan, Roche/Engels pricing of certain drugs which are life saving are based on the benefits or improvements in the treatment of patients both clinically and in their quality of life afterwards and the resulting benefits to the health-care system and society. It is not just a cost to bring a product to market plus a respectable margin. Neither is it a realization by Roche of having recovered investment costs and gained sufficient funds for R&D, the Failures, the Trials, and the Capitalization, it can relax its pricing.

罗氏媒体关系团队成员Ulrike Engels在捍卫定价策略时表示,基于成本加保证金数据的RTS计算显示了对价格如何确定的根本误解。与诺华公司首席执行官Vas Narasimhan所说的相似,罗氏/恩格斯对某些挽救生命的药物的定价是基于临床和患者生活质量对患者治疗的益处或改善以及由此带来的健康益处 - 保健系统和社会。这不仅仅是将产品推向市场的成本加上可观的利润。罗氏没有意识到恢复投资成本并获得足够的资金用于研发,失败,试验和资本化,它可以放宽定价。

Older Drugs


Pharma companies are also using the “value-based” analysis to determine pricing for old drugs even without improvement. This is precisely what HHS Alex Azar did at Eli Lilly with Humalog a decades old drug used to treat diabetes. The six million diabetic Americans watched as insulin (Humalog) prices tripled under Azar’s watch at Eli Lilly from 2007 to 2017. During his tenure as president and vice president, Eli Lilly raised the price of Humalog by 345% from $2,657.88 per year to $9,172.80 per year. The resulting pricing shock forced some patients to attempt rationing their taking of the product which in some cases caused death.

制药公司也在使用“基于价值”的分析来确定旧药的定价,即使没有改进。这正是HHS Alex Azar在Eli Lilly所做的事情,Humalog是一种用于治疗糖尿病的几十年前的药物。 2007年至2017年,600万糖尿病患者看到胰岛素(Humalog)的价格增长了两倍,这是在礼来公司担任总裁兼副总裁期间,礼来公司将Humalog的价格从每年2,657.88美元提高到每年9,172.80美元。年。由此产生的价格冲击迫使一些患者试图限制他们服用该产品,这在某些情况下导致死亡。

According to a JAMA study in 2017, the rising cost of healthcare and “after accounting for inflation, healthcare expenditures increased $933.5 billion from 1996 to 2013.” 50% of the increase in healthcare costs during that period was simply due to higher prices. Be that as it may, different chronic diseases have different patterns of price increases. The biggest increase was seen in diabetes care and driven largely by the rising costs of pharmaceuticals. During that period of time, Diabetes care increased $66 billion in cost of which an approximate two thirds of it being solely due to the increased cost of the pharmaceuticals used in treatment.


To be redundant, value based analysis methodology considers the extra years of life gained, the quality of life during the time period lived, and the healthcare savings gained (an overall cost reduction in treatment), in addition to other benefits, to determine the value of the drug to a person and society in which to set a price. This is the argument being made. Roche’s Herceptin targets HER2-positive breast cancer, an aggressive cancer which occurs in younger women, and claims the benefits of treatment being particularly high thereby deserving of a higher price.


Novartis applied the same “value-based” analysis to justify pricing for Kymriah used to treat unresponsive b-cell acute lymphoblastic leukemia when there are no other options for them or their families. It is a one-time treatment with follow-up treatments far less frequent than traditional therapies.


The Institute for Clinical Economic Review — an independent expert body assessing cost effectiveness of medical treatments — assigned a cost effectiveness value of up to $1,688,000 for Kymriah for its use in children. The value this treatment offers considered the four key measures to set the Kymriah list price for pediatric use at $475,000, which is well below the cost effectiveness value set by ICER, and $373,000 for rapidly progressing adult cancers.

临床经济评论研究所 - 一个评估医疗成本效益的独立专家机构 - 为Kymriah指定了一项用于儿童的成本效益值高达1,688,000美元。该治疗方法提供的价值考虑了将儿童使用的Kymriah标价定为475,000美元的四项关键措施,远低于ICER设定的成本效益值,以及373,000美元用于快速发展的成人癌症。

Social Responsibility Over Profits


The questions can be asked of whether it is morally responsible or acceptable for a company to set the valuation/pricing of a product used to save a life at a level tens of times higher than actual cost to bring it to market? Is it also morally responsible or acceptable to increase an older product’s pricing when the costs have been recovered many times over? Yet, this is what the corporate expectation is for cancer drugs with its pricing and also for older drugs such as Humalog, Vimovo, and EpiPen applications based upon a value analysis to patients.


Tags: Salk


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