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Pharma heading for collision course over cancer drug costs

Published on 16/03/06 at 10:47am

Fears that the pharmaceutical industry could be on a collision course with Europe's healthcare payers over new high priced medicines emerged at a recent meeting between industry leaders and the head of the UK's NICE.

Sir Michael Rawlins, chairman of the UK's clinical and cost effectiveness body NICE shared a platform with senior industry executives at the recent Economist conference, with prices and access to new medicines one of the key issues.

The issue was brought into focus by a recent report in The New York Times on Roche/Genentech's Avastin which accused Genentech of 'price gouging' with new indications for breast and lung cancer due to cost around $100,000 a year in the US.

The article included a recent remark from William Burns, head of Roches pharmaceutical division, defending high prices.

"As we look at Avastin and Herceptin pricing, right now the health economics hold up, and therefore I don't see any reason to be touching them," said Burns. "The pressure on society to use strong and good products is there."

Rawlins, restating that clinical and cost effectiveness measures were here to stay said the industry needed to very careful about the value it puts on its innovation.

"Nine hundred dollars a month [the proposed price of Avastin] is likely to be unaffordable and unreachable to most healthcare systems," he warned.

Rawlins also observed that healthcare systems around the world, regardless of how they were funded tended to spend around 2,000 a year per person across the total population, suggesting he saw little scope to increase beyond this threshold.

He balanced this message with conciliatory noises, saying he believed the pharmaceutical industry could respond to the changing healthcare environment.

The industry's leaders continue to argue that the full economic benefit of drugs are often not fully captured by health technology assessments such as NICE.

Picking up the theme, Ian Read, head of Pfizer's operations in Europe and the Middle East said the industry was very aware that payers, either private or public, were demanding value for money more than ever before.

"The basic proposal is that we need choice," Read said, suggesting that individuals should be given the option of paying more, but said this required a wider debate in society.

"We need to decide as a society whether 2,000 is the right number or is it 4,000, concluding that this debate could result in an unlimited pot of money to funding innovative new treatments."

Rawlins replied: "There isn't an unlimited pot. Every four to five years the electorate goes to the polls to elect a government that will or will not increase the budget for healthcare."

Read agreed that there has historically been very little political will to discuss such issues in Europe, with the electorate deliberately kept uninformed about the potential choices in healthcare.

He added that in Europe's biggest market Germany, the government's cost cutting agenda has contributed to a crisis where doctors feel 'unable to practice medicines,' and said the lack of a stable pricing system was the single biggest problem for the industry in Europe.

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