Pfizers Cancer Campaign Persuades U.k. to Pay For Costly Drug
Last month, Pfizer finally won. The agency that advises the U.K.s National Health Service decided the medicine extended the lives of patients enough to justify its cost, as long as the first course of treatment was free. The campaign wasnt publicized by Pfizer or the U.K. and was revealed in interviews with government and company officials.
The campaign cost Pfizer about 2.5 million pounds ($3.5 million) and gained the worlds biggest drugmaker an advantage over competing products made by Roche Holding AG, Bayer AG and Wyeth. Giveaways and rebates may become more widespread as companies try to persuade governments to pay for expensive medicines without slashing prices, said Chris Brinsmead, president of the Association of British Pharmaceutical Industry.
“Its a relatively new phenomenon, and I think well see more of it,” Brinsmead said in a Feb. 17 telephone interview. “Companies are trying to be enormously flexible with their pricing, but they cant go down a track where they sell their medicines at prices way lower in the U.K. than in the rest of Europe.”
Pfizers victory, which came two years after European regulators approved the drug and three years after it became available in the U.S., follows successful discounting efforts by Roche, Novartis AG and Johnson & Johnson. Drugmakers are giving away medicines because they cant slash prices in just one country, said Brinsmead, chairman of AstraZeneca Pharma UK. If companies had to reduce their charges in the U.K., they would be pressured in other markets, he said.
11 Billion Pounds
The creative pricing arrangements lower the overall expense for the National Health Service and improve the ratio of cost to benefit that the National Institute for Health and Clinical Excellence uses to determine if a medicine should be covered. In all, drugs cost the nation 11 billion pounds annually, about 10 percent of the total health-care bill.
“The old days of being able to price a drug for what the market will pay are gone,” said Michael Rawlins, chairman of the U.K. agency, known as NICE, at a conference sponsored by the medical journal Lancet last month. “You need to add value for the money.”
Offering free drugs doesnt always work. NICE said March 5 that GlaxoSmithKline Plcs Tykerb costs too much to be recommended for routine use in women with advanced breast cancer, even after the London-based drugmaker offered to cover the expense of the first 12 weeks of treatment.
Free Treatment
In 2007, New York-based Pfizer began offering the initial course of treatment for free to regional health commissioners who can pay for a drug before NICE makes a decision. The company sent letters to pharmacists and oncologists making them aware of the offer, said Rob Day, Pfizers director of U.K. oncology.
“Slowly but surely patients across the U.K. got access to Sutent,” Day said. “There was more evidence once the drug was on the market for a longer period of time, and that additional clinical experience impacted the decision.”
Novartis, based in Basel, Switzerland, agreed last year to give Lucentis to patients with macular degeneration, the most common form of blindness in the elderly, for free after the first 14 injections. The drug costs about 760 pounds per shot. If patients need the full 24 injections that were used in tests of the drug, Novartis will pick up the additional cost.
Johnson & Johnson
Johnson & Johnsons blood-cancer drug Velcade won coverage in 2007 after the New Brunswick, New Jersey-based company said it would pay back the government for people who didnt benefit. Patients get the first four doses of the 762.38 pound drug, then are tested to see if theyve responded to the treatment. Those who improved continue with the drug. Johnson & Johnson provides a rebate of about 3,000 pounds for those who didnt respond.
The U.K. agreed to pay for Roches lung-cancer medication Tarceva after the Basel-based company said it would charge the same price as Sanofi-Aventis SAs older drug Taxotere.
British officials arent demanding concessions from drug companies and they dont have the authority to negotiate price discounts, said Andrew Dillon, chief executive officer of NICE, in a telephone interview. When companies do offer products at lower costs, its sometimes enough to make a difference. Still, thats only one component the agency considers, he said.
Adding Value
“We are prepared to make decisions that are controversial and defend them,” Dillon said. “You dont want to pay for things that arent adding significant value, and you presumably want to make sure the money is spread as fairly as possible.”