How Marketing Exclusivity Led to Higher Drug Costs and Questionable Benefits

Source- Wall Street Journal Pharmalot, 6 May, 2015

Six years ago, the FDA approved a drug called Colcrys to treat acute gout attacks and familial Mediterranean fever, an inherited inflammatory disorder. The move came as part of an agency initiative to regulate dozens of medicines that had never been formally approved, but were on the market when the FDA received authority to oversee the drug approval process.

In this instance, Colcrys was the brand name given colchicine, which was sold for decades by several companies and cost 9 cents a pill. URL Pharma won FDA approval – and seven years of marketing exclusivity – by running a small study that gauged the effectiveness of different dosages. URL sued other colchicine makers and, by early 2011, marketing exclusivity took hold. And Colcrys cost $5 a pill.

Now, a new study says the approval was not worth the effort, at least for patients. Harvard Medical School researchers examined nearly 217,000 enrollees in an insurance database who were diagnosed with gout or FMF before and after marketing exclusivity kicked in. Here is what they found:

The likelihood of receiving a prescription for either colchicine or Colcrys to treat either malady dropped during the year after the marketing exclusivity took hold – 0.5% per month for gout sufferers and 7.6% for patients with FMF. Meanwhile, prescription costs and related health care costs for gout and FMF patients rose during the same period, by 55% and 38%, respectively, according to the study.

“This shows that this type of incentive can go wrong,” says Aaron Kesselheim, a study co-author and an associate professor of medicine at Harvard Medical School. “The market exclusivity was granted for behavior that didn’t provide much public health benefit. But it caused the price to go up, increased spending by patients and reduced use of the drug, which has potentially bad public health implications.”

The findings follow substantial criticism that was leveled at the FDA not long after the approval led to the price hike, since Colcrys was not a new drug. In its defense, the FDA noted that the drug maker, which was later bought by Takeda Pharmaceutical, was entitled by law to the marketing exclusivity. And since FMF is a rare disease, the exclusivity stretched to seven years, four more than usual.

Moreover, the agency justified the approval for safety reasons – there was a potentially dangerous risk among people who took colchicine along with either cyclosporine or clarithromycin. However, the new study, which was published in the Journal of General Internal Medicine, did not find any change in the rates of combined prescriptions. We asked Takeda for comment and will update you accordingly.

Consequently, the study authors argue that the episode offers an opportunity to revisit the extent to which marketing exclusivity is granted. In their view, the colchicine example did not produce a sufficient trade-off between safety and accessibility and, as a result, believe that the incentives dangled before drug makers ought to be rethought.

The criticism comes as a Congressional committee drafts a sweeping bill known as 21stCentury Cures, which is designed to jump start medical innovation. An initial version included plans to extend marketing exclusivity to drug makers as an incentive, although an updated version last week omitted that section. However, there is place-holder for a section about re-purposing drugs for serious conditions.

“Colchicine is but one data point in a world with countless examples of inefficient incentives for medical R&D,” says Jamie Love of Knowledge Ecology International, an advocacy group that focuses on access to medicines issues. “We have to begin to look at these issues as a financing problem, and consider new ways to finance these clinical trials.  This money does not come from Santa Claus. It comes out of our pockets as consumers, as employers, as taxpayers, and when we buy insurance.”

The FDA would not comment on the study, but pointed us to a recent blog post about its initiative to regulate unapproved drugs. “If a single manufacturer is the sole maker of a newly-approved product, the price of the drug may be higher than what patients and prescribers paid for the unapproved drug,” the posts says. But the agency does not factor costs into approvals or safety-related decisions.

For its part, the Pharmaceutical Research & Manufacturers of America, also would not comment on the study, but sent us a statement saying the trade group supports “statutory exclusivity provisions that provide incentives for companies to make the R&D investments necessary to demonstrate the safety and effectiveness of medicines.”

This entry was posted in Data Exclusivity, TRIPS plus. Bookmark the permalink.

One Response to How Marketing Exclusivity Led to Higher Drug Costs and Questionable Benefits

  1. Pingback: The Daraprim Case: How a Drug’s Price Rose by 75,000 % | Don't trade our lives away

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