Outrageous Price Hikes for Generic Cancer Drugs in UK

Zosia Chustecka

January 30, 2017

AMSTERDAM ― Some generic cancer drugs have increased in price by 1000% in recent years in the United Kingdom, and paying these inflated prices for what should be cheap generic drugs is wasting money for an already stretched National Health Service (NHS).

The price hikes for generic cancer drugs were reported here at an oral presentation of the inaugural meeting of the European CanCer Organisation (ECCO) Congress 2017.

Some of the price increases are outrageous, lead author Andrew Hill, PhD, senior research fellow from the Department of Pharmacology and Therapeutics at the University of Liverpool, United Kingdom, told Medscape Medical News. Companies are getting away with this because they take over the manufacturing of a particular drug and then have a monopoly.

These generics are made in India, where they cost pennies per tablet. "These drugs are so cheap," said Dr Hill. "We need to get this information out so that people are negotiating from a position of strength.

"At the moment, we are wasting so much money," he continued. The NHS is wasting £308 million just for community prescribing, and that figure would be much larger if hospital prescribing was also included.

However, the British Generic Manufacturers Association (BGMA) pointed out that hospital prices for these drugs are negotiated separately through a rigorous tendering system and are much lower than those quoted by the researchers.

Reductions in the price of generic cancer drugs could lead to a cascade of price reductions in the field, as the prices of patented medicines are normally referenced to prices of older generics used in control arms, Dr Hill argued.

Also, spending money on generics with inflated prices leaves fewer funds for spending on innovative cancer drugs, which are currently rationed in the United Kingdom, he pointed out. At the moment, 1 in 3 new cancer drugs are not getting approved for use in the NHS, as reported in another presentation at the meeting.

"This is unacceptable," said Ian Banks, MD, chair of the Patient Advisory Committee at ECCO. "Behind these statistics of price rises is a patient who is not getting a drug that could save their life, or at the very least, improve their quality of life."

Documenting Huge Price Increases

Dr Hill and colleagues documented huge price increases for many generic cancer drugs commonly used in the United Kingdom from September 2011 to September 2016. The team used three databases – Drug Tarriff, British National Formulary, and Prescription Cost Analysis ― noting, "we think this a reliable indicator that the UK pays."

Among their findings are the following:

  • Busulfan (from Myeleran), used in leukemia; the price per 2-mg tablet rose from £0.21 in 2011 to £2.61 in 2016, an increase of 1227%. As with most generics, it is made in India, where it costs £0.03 per tablet.

  • Tamoxifen (from Wockhart), used in breast cancer; the price per 10-mg tablet rose from £0.10 to £1.21, an increase of 1079%. The Indian price is £0.02.

  • Cyclophosphamide (Alliance), used for many cancers; the price per 50-mg tablet rose from £0.20 to £1.39, an increase of 695%. The Indian price is 0.02.

  • Melphalan (from Alliance/Aspen), used for ovarian cancer, rose from £0.55 to £1.82 per 2-mg tablet, an increase of 230%. The Indian price is £0.08.

  • Chlorambucil (from Aspen), used for leukemia and lymphoma; the price rose from £0.33 to £1.62 per 2-mg tablet, an increase of 390%. The Indian price is £0.05.

"We were surprised to find several companies consistently raising the prices," Dr Hill said. "We found that some companies take over the supply of some generic medicines and then raise the price progressively."

He singled out Aspen as a case in point, because it has a monopoly on some of these generics. It is a hugely profitable company, with a share price that rose more than 600% in the past 7 years, he noted. GlaxoSmithKline had a 16% shareholding in Aspen from 2009 until late 2016, although it has now sold its shares for a total of around £1500 million.

There is hope that new legislation now passing through the UK parliament will prevent such huge price increases in the future. The Department of Health has introduced the Health Services Medical Supplies (Costs) Bill to regulate prices in the future, and companies found to be raising prices with no clear justification will be referred to the Competition and Markets Authority.

Spain and Italy have argued against the higher prices demanded for generics and have even taken legal action, but the companies threatened to stop supplying the generics drugs unless the higher prices were agreed upon.

"Companies are getting away with this," he commented. "In a proper competitive market, this should not be happening, and I think that Europe needs to work together as a region, rather than each county for itself, as the market is much bigger," he added.

ECCO President Peter Naredi, MD, said it was good to have this issue discussed at the European meeting, as it raises awareness of the problem, but Dr Banks added that the issue needs to be discussed in a way that will lead to action.

Approached for a reaction to the findings, the BGMA told Medscape Medical News, "It is important to note that the prices which have been referred to appear to be Drug Tariff prices, and the reality is a very different."

Generic medicines used in hospital cancer treatments are purchased by the NHS through a rigorous tendering system, the BMGA said. This is run by the Commercial Medicines Unit, which publishes the prices they pay for generic medicines in the eMIT national database.

The eMIT national database shows that the prices paid by the NHS are much lower than the published list or tariff prices, the association pointed out. For example, the tendered price paid by hospitals for tamoxifen 10-mg tablets is £4.85 for a pack of 30, or 16 p per tablet, compared with £1.21 per tablet price quoted in the researchers' presentation at the conference, it noted.

The BGMA agreed with the observation about companies having a monopoly — all the of the generic products in the list that Dr Hill and colleagues discussed at the meeting except for one (hydroxycarbamide) do not face competition from multiple suppliers, it noted. That is because the total market size is too small to be attractive for generic companies to enter. Were they to do so, they would not recoup the million-pound-plus costs of developing, testing, and registering a new generic medicine, the association said.

Making Cheaper Generics

In another presentation (abstract 1032), Melissa Barber, MPhil, from the Center of Development Studies at Cambridge University, United Kingdom, reported results from a project supported by the World Health Organization regarding the manufacturing costs of drugs used to treat cancer.

Because most generic drugs are made in India, the cost of the active pharmaceutical ingredient was calculated on the basis of the Indian price of the drug. Excipient and conversion costs were added, as was a 10% profit margin that accounts for a 26.6% average tax on profits, which seems fair, Barber commented, because pharmaceutical companies aim for a 20% profit on new drugs.

Even with these additions to manufacturing costs, the researchers found that several key generic cancer drugs could be manufactured for less than 1% of the prices charged in the United Kingdom and the United States.

One example is imatinib (Gleevec, Novartis), used for the treatment of chronic myeloid leukemia (CML). At present, the cost per 400-mg tablet is $0.22 in India; the cost-based generic estimate that Barber and colleagues calculated is $1.04. This contrasts with current price per tablet of $57.53 in Spain, $84.36 in the United Kingdom, and $247.74 in the United States (at Veterans Affairs prices, which are discounted).

The project demonstrates how cheaply generic imatinib could be produced, Barber said. But this is not being done – at the moment, in the United States, generic imatinib costs about one third less than the branded product, and the price of the branded product has increased dramatically in recent years, as previously reported by Medscape Medical News.

With the cost-based generic, treatment of CML with imatinib would cost around $54 per month. Using tamoxifen (multiple brands) for breast cancer would cost around $2 per month, Barber said.

"Showing that certain cancers could be treated for very low prices could transform the future of people with cancers in very-low-income countries, where there are usually few or no treatment options," Barber commented. It could allow for large-scale treatment programs, such as the ones implemented for the treatment of HIV and AIDS in many low-income countries.

This study was supported by research grants from the World Health Organization and the Open society Foundation. Dr Hill received consultancy fees from Janssen and Merck in 2106 for work not connected with this project.

European CanCer Orgnisation (ECCO) Congress 2017. Abstract 966, presented 28 January; abstract 1032 presented on January 29.

Comments

3090D553-9492-4563-8681-AD288FA52ACE
Comments on Medscape are moderated and should be professional in tone and on topic. You must declare any conflicts of interest related to your comments and responses. Please see our Commenting Guide for further information. We reserve the right to remove posts at our sole discretion.
Post as:

processing....