U.S. Medicine Prices: Watching from Europe with Trembling Knees

Working at the Dana-Farber Cancer Institute (then the Sidney Farber) in the Division of Tumor Immunology led by Stuart Schlossman, MD, in the early 1980s was a great experience for my wife and me – and perhaps an even greater one for our two young kids. The concept of Halloween, for one, was completely new to them and completely tantalizing. They can still remember being escorted around Needham for trick-or-treating, filling up their buckets with candy.

I could have sworn these traditions would never cross the pond to Europe, where we celebrate All Saints’ Day – the remembrance of the ones departed during the preceding year – on November 1. During the last decade, however, Halloween snuck into my country, too. Pumpkins, gory masks, and, indeed, festive candy are now amply available at the local supermarket – somewhat to my dismay.

My fellow European doctors and I follow the trends in medication pricing in the United States with similar trepidation, hoping that this is one U.S. custom that will not be “exported” to us.

Drug Pricing Decisions: Lost in Translation

Naturally, we realize that pharmaceutical companies develop new drugs at great expense. Consequently, these new drugs have hefty price tags to cover both the costs of their discovery, and to fund the research to develop future drugs. However, some of the pricing decisions have been difficult to rationalize.

When authors from the Memorial Sloan-Kettering Cancer Center published an editorial in The New York Times in 2012 standing up against the pricing of a new colorectal cancer agent, they were rightly lauded.1 The editorial and ensuing publicity, in fact, led to the company halving the drug’s original price.

This reduction was, unfortunately, the exception to the rule.

As in the United States, the prices of new drugs in Europe arelargely unregulated. In my country, the pharmaceutical industry notifies the Danish Health Board (the Danish equivalent of the U.S. Food and Drug Administration) of changes in medicine prices every two weeks merely as a matter of announcement. The Danish Health Board is obliged by law to then communicate the pricing changes to all pharmacies which are, in turn, also bound by law to follow them.

Each new medication’s indication is determined by a system of boards created by a central organ under the Danish Regions. (Denmark is divided into five such committees.) Once an already registered drug has been approved by a committee, all costs of the drug to the patient are covered by the public health service.

Typically, a new drug is dispensed by a University Hospital, with reimbursement to that hospital from the Regional budget. The Regional health budget is determined by the government as part of once yearly negotiations. The most recent ones left the Regions with a deficit of 0.5 billion DKr, or $75 million, in a country with 5.6 million inhabitants. Such deficits have already threatened staff reductions throughout the country and, interestingly, the most recent deficit was more or less the amount needed to treat 200 children and teenagers with a new drug against cystic fibrosis.

If this trend continues – and there is every reason to think it will, with the panoply of new drugs being developed – the coming years will be a constant struggle to get new medicines to our patients while retaining the quality of our health-care systems.

The situation in other European countries is essentially the same as in Denmark. For example, in Great Britain, the National Institute for Clinical Excellence (NICE) ( has been managing a Cancer Drugs Fund which, despite an increasing allotment of money for new drugs over the past three years, became overwhelmed in August, resulting in newspaper headlines such as “Up to 10,000 Patients Face Being Stripped of Cancer Drugs.”2 The Daily Mail also reported that closed-door meetings would determine which drugs would receive reduced funding.

If this were the only issue, it could be solved by instituting stringent indications restricting the use of new expensive drugs.

A Nerve-Wracking Export

From the European perspective, the recent concomitant development in the United States of setting prices for already approved drugs is shocking – as is the media coverage of this phenomenon.

The New York Times and The New Yorker have excoriated drug companies and their CEOs for the despicable practice of buying other companies while increasing prices of their portfolios of drugs over 50-fold, simply by exploiting loopholes in the current American system. Take the anti-toxoplasmosis drug, pyrimethamine (marketed as Daraprim®) as an example. When there is a de facto monopoly price-setting becomes a seller’s market, even if the seller is “greedy and indifferent,” according to The New Yorker Financial Page coverage.3

As hematologists we have an obligation to secure the best treatments for our patients, and this is heightened by the fact that our field is a front-runner in the development of new, paradigm-shifting drug discoveries.

Most EU countries operate within a national health-care service system, and the doctors in these countries are fortunate enough to not have to bother with insurance companies in the same ways our American colleagues have to.

The recent deficits are deeply disturbing because they could destabilize the fabric of most European health systems – threatening to decrease the quality of care simply because expenditures on novel (and older) drugs are spiraling out of control. In the United States, initiatives from the Obama administration to institute formal reviews of medicine prices by the FDA appear unlikely to succeed in the present Congress, in part due to the strong drug lobby (another phenomenon not generally encountered in Europe).

Consequently, in Europe, we await the importation of U.S. medicine prices, with considerably more trepidation than American Halloween customs!


References

  1. Bach PB, Saltz LB, Wittes RE. “In Cancer Care, Cost Matters.” The New York Times, October 14, 2012.
  2. Borland S. “Up to 10,000 patients face ‘being stripped of cancer drugs’: Secret plans to slash lifesaving fund by £40million.” Daily Mail, August 3, 2015.
  3. Surowiecki J. “Taking on the Drug Profiteers.” The New Yorker, October 12, 2015.

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