Bumper haul of expensive new drugs heads to U.S. and Europe

Print 23 November 2015
Ben Hirschler / Reuters

LONDON, Nov 20 Drug companies have brought a host of expensive new medicines to market in the United States and Europe this year, figures show, another bumper haul for an industry often accused of over-charging.

Drug prices are set to be a major issue in the run-up to the U.S. presidential election next year, with Democratic candidate Hillary Clinton having pledged to rein in costs in a country that has the world's highest prices.

The busy drug pipeline to the West also illustrates how the vast bulk of research cash is spent on developing money-spinning medicines for rich countries, rather than to tackle tropical diseases that kill millions in the developing world.

The U.S. Food and Drug Administration (FDA) has so far approved 38 novel drugs in 2015, more than the 34 that had been cleared by this stage a year ago and just short of 2014's final total of 41, which was an 18-year high.

The European Medicines Agency (EMA) is also waving through more products, recommending a total of 84 new medicines so far, up from 75 in the first 11 months of 2014, according to data released on Friday. Unlike the FDA, the EMA includes generic drugs in its list.

The brisk pace of new arrivals over the past two years reflects improved productivity in drug research labs and a change of pace by regulators, who have committed to speed up the process of getting life-saving treatments to patients, especially in cancer.

Over the past week, for example, AstraZeneca's new lung cancer pill Tagrisso and Johnson & Johnson and Genmab multiple myeloma therapy Darzalex both won FDA approvals several months before the official decision deadline.

And Takeda's Ninlaro for multiple myeloma was added to the tally on Friday, also getting a green light earlier than scheduled.

At the same time the drug industry's hit rate for experimental products is improving, with the number of projects failing in the final stage of clinical testing falling markedly over the last six years.

'SCIENCE GOT BETTER'

"The science has got better and we seem to be finding more molecules that are showing material improvements. The old idea that industry pipelines are thin is not really true anymore," said Hilary Thomas, chief medical adviser at consultancy KPMG.

"Regulators are also getting much slicker at approving breakthrough drugs and in some cases the decisions are even coming faster than the companies expected."

Significantly, the rapid pace of new drug launches is forecast to continue, with 225 new drugs expected to be approved between 2016 and 2020, according to a report from industry data firm IMS Health this week. IMS expects cancer treatments to be largest category.

Drug companies argue they need to make decent profits to pay for the billions of dollars needed for drug research. Many companies also have extensive low-cost or even free access schemes for patients who cannot afford their medicines.

But the high prices charged for modern drugs is generating increasing push-back from healthcare providers, patients and some doctors. The issue is highly charged in the United States, where for cancer drugs companies are charging up to 600 times what the medicines cost to make, according to an independent academic study published in September.

Treatment options for rare diseases are also soaring and 30 percent of U.S. approvals so far this year have been for so-called orphan conditions, where annual costs often exceed $100,000 per patient.

A new cystic fibrosis treatment called Orkambi from Vertex Pharmaceuticals, for example, was launched in July at $259,000 a year, prompting criticism from some U.S. doctors.

Such premium prices are good news for companies and investors but a challenge for insurers and governments. The biggest problems, however, come not with rare diseases, where patient numbers are small, but with more common disorders.

A price tag of more than $14,000 a year for two new cholesterol drugs known as PCSK9 inhibitors sparked protests in the United States by healthcare providers. Some have now managed to get undisclosed discounts.

Britain's health cost agency this week also turned down the first such drug to be evaluated, even though the cost of the medicines is far lower in Europe.

NEGLECTED DISEASES

Amgen's PCSK9 drug Repatha and Sanofi and Regeneron's rival product Praluent are both expected to generate annual sales of around $2.5 billion by 2020, according to Thomson Reuters Cortellis.

Both drugs are designed for people who cannot get their cholesterol down sufficiently with standard statin pills, which are now available off-patent for pennies a day.

Other medicines approved this year that are expected to be top-sellers include Novartis's Entresto for heart failure, forecast to bring in an annual $5.4 billion by 2020, Pfizer's breast cancer drug Ibrance, with anticipated 2020 sales of $5.3 billion, and Vertex's Orkambi, on $4.5 billion.

For healthcare systems in the developed world, paying for such pricey medicines is a challenge - but for many patients in poor countries they will remain out of reach, reflecting the economic realities of drug development.

Just 1 percent of clinical trials under way worldwide are focused on neglected tropical diseases such as sleeping sickness, leishmaniasis and elephantiasis that maim, blind and kill millions.

The cost burden in the industrialised world will be offset to some extent by patent expiries on older medicines, which opens the door to cheaper generics.

The pharmaceutical industry argues this especially benefits the United States, given its high level of generic use, so that while Americans may pay more for drugs when they first come out, they pay less as products get older.

IMS predicts generics will account for between 91 and 92 percent of all U.S. dispensed prescriptions by 2020, up from 88 percent at present. In Britain, generics currently account for just over three-quarters of prescriptions, while the level is lower in other parts of Europe.

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