U.S. Drugmakers Charge More Than in Europe, Public Citizen Says
Bloomberg News
July 15, 1998, 8:22 p.m. ET
U.S. Drugmakers Charge More Than in Europe, Public Citizen Says
Washington, July 15 (Bloomberg) -- U.S. drug manufacturers
are charging American consumers up to six times more than are
their European counterparts for some of the newer anti-psychotic
and antidepressant drugs, according to a study by Public Citizen.
''American patients are being ripped off by profiteering
drug companies, and those who can't afford the colossal prices
are often left untreated, with disastrous consequences,'' Dr. E.
Fuller Torrey, a research psychiatrist with the consumer advocacy
group, said in a statement.
For example, European pharmacists pay an average $163.10 for
60 tablets of 5 mg Olanzapine -- which Indianapolis-based Lilly
(Eli) & Co. markets under the Zyprexa label, the study said.
American pharmacists must pay $324.08, or twice as much,
according to the study.
The report comes as four major drug companies -- Pharmacia &
Upjohn Inc., Abbott Laboratories, Rhone-Poulenc Rorer Inc. and
Hoechst AG's Hoechst Marion Roussel unit -- agreed to pay $350
million to settle a suit claiming they conspired to overcharge
independent and chain-store pharmacies, while giving discounts to
hospitals and managed-health care organizations.
Yet drug companies say the Public Citizen study is skewed
and doesn't consider many of the reasons for the price
differences.
The study offers ''a misleading and simplistic approach to
this because... it doesn't take into account the pharmacy mark-up
rate in Europe,'' said Jeffrey Newton, a spokesman for
Indianapolis, Indiana-based Lilly.
''The price that consumers pay in both Europe and the U.S.
is much closer than they would indicate,'' Newton said. Also, the
study ''doesn't reflect currency fluctuation.'' Additionally,
Newton said Public Citizen only spoke to one pharmacy per
country, he said.
High Margins
Public Citizen charged that U.S. pharmaceutical companies
have one of the heftiest profit margins of any American industry,
with a total of $12.26 billion in net profits in 1996 for the six
companies the group studied -- Novartis AG; Johnson & Johnson
subsidiary Janssen Pharmaceutica Inc.; Solvay SA; SmithKline
Beecham PlC; Pfizer Inc.; and Bristol-Myers Squibb Co.
Those profits come ''at the expense of people with severe
psychiatric disorders who cannot afford the newer medications,''
Torrey said.
Zyprexa, which has allowed schizophrenia patients to lead
more normal lives thanks to fewer side effects like muscle
damage, was one of the most successful drug introductions ever.
The drug garnered $760 million in sales in 1996, its first year
on the market. Zyprexa sales will rise to $1.4 billion this year,
analysts at Cowen & Co. estimate.
Yet, Lilly's Newton said that while taking Zyprexa costs a
patient more than $3,000 a year, using the drug can produce a net
savings to the patient of about $10,000 -- compared to using an
older drug. That's because Zyprexa patients spend less time on a
hospital bed, he said.
Hospitalizing patients to treat schizophrenia can cost $500
to $1,000 a day, said Richard Jed Wyatt, chief of neuropsychiatry
at the National Institute of Mental Health.
Price Controls
Other critics of the study said it failed to consider other
factors that influence differences in prices in North America and
Europe.
Those differences mostly reflect the ''price controls'' in
place in most European countries, which have some degree of
nationalized health care, said Jeff Trewhitt, a spokesman for
PHARMA, the trade group representing the pharmaceutical industry.
''We lead the world in innovation because the free market
economy encourages innovation,'' Trewhitt said.
The profits made by drug companies are crucial to the
expensive research, development and patient testing required by
the U.S. government before a drug may be marketed at all, he
said.
''We are making a profit and we need to make that profit in
order to sustain the high and growing cost of development,'' he
said. ''Those are factors that do need to be taken into
account.''
Schizophrenia affects between 2 million and 3 million
Americans, usually striking younger people, between the ages of
15 and 30. The disease's symptoms include delusions, paranoia,
hallucinations and extreme withdrawal and apathy.
--Anne Maitrepierre in Washington (202) 624-1820, with Kerry |
