Patients Eagerly Awaited a Generic Drug. Then They Saw the Price.
Posted February 24, 2018 12:00 a.m. EST
When Teva Pharmaceuticals announced recently that it would begin selling a copycat version of Syprine — an expensive drug invented in the 1960s — the news seemed like a welcome development for people taking old drugs that have skyrocketed in price.
Syprine, which treats a rare condition known as Wilson disease, gained notoriety after Valeant Pharmaceuticals International raised the price of the drug to $21,267 in 2015 from $652 just five years earlier. Along with similar practices by pharmaceutical executives like Martin Shkreli of Turing Pharmaceuticals and Heather Bresch of Mylan (the maker of the EpiPen), the story helped spark a national conversation about the high cost of prescription drugs, not to mention congressional inquiries and federal investigations.
In promoting its “lower-cost” alternative to Syprine, a Teva executive boasted in a news release that the product “illustrates Teva’s commitment to serving patient populations in need.”
What the release didn’t mention was the price: Teva’s new generic will cost $18,375 for a bottle of 100 pills, according to Elsevier’s Gold Standard Drug Database. That’s 28 times what Syprine cost in 2010, and hardly the discount many patients were waiting for.
Nearly three years after Valeant’s egregious price increases ignited public outrage, the story of Syprine highlights just how hard it can be to bring down drug prices once they’ve been set at stratospheric levels.
Despite efforts by the Food and Drug Administration to encourage more competition for drugs that have no generic alternatives, companies like Teva will still charge as much as the market will bear as long as there is no significant competition. And even companies that come under intense criticism, like Valeant, can often neutralize consumer upset through assistance programs.
While those can lower out-of-pocket costs for patients, the programs stick insurers with the bulk of the bill, which in turn can be passed on to consumers through higher premiums and deductibles.
Jay Copeland, 59, has been taking Syprine for a decade to treat Wilson disease, a condition that causes copper to build up in the body, leading to organ and neurological damage if not treated.
Calling the generic price “incredibly punitive,” Copeland said his employer’s insurance shields him from most of the drug’s cost, but he worries what would happen if he were to lose his job. Teva’s slightly lower price, he said, “would make relatively little difference to me if I were put in the position to pay enormous out-of-pocket costs.”
To encourage more generic competition, the FDA recently published a list of off-patent drugs that have no competition and cleared a backlog of generic applications. But as the Syprine case shows, it often isn’t as simple as adding a single generic competitor.
“By and large, generics work when there are multiple players,” said David Maris, an analyst at Wells Fargo who wrote this week about Teva’s generic Syprine price. “When there’s not, you get this.”
If there are just a few players and if the drug treats a small group of patients, as is the case with Wilson disease, the companies will try to make as much profit as they can. Just 5,226 prescriptions were filled for Syprine, also known as trientine hydrochloride, in the first three quarters of 2017, according to the data research firm IQVIA.
Wilson disease is believed to affect between 8,000 and 10,000 people in the United States, and some with the condition take other drugs, according to Mary Graper, the vice president of scientific affairs at the Wilson Disease Association, a patient group.
“Generic companies are for-profit companies, too, and so it’s not surprising to me that they price the product at what they think the market will bear,” said Dr. Aaron S. Kesselheim, an associate professor at Harvard Medical School who has studied drug prices.
A spokeswoman for Teva declined to comment on how it set its price, but said the company considers a range of factors. “If there is more competition and ample supply, pricing will continue to fall,” said the spokeswoman, Kaelan Hollo. Teva, which calls itself the world’s leading manufacturer of generic drugs, has struggled in recent years with management turmoil, lost sales of a leading brand-name drug, and — in a twist — with the falling prices of many commonly used generic drugs. In December, it announced a major reshaping, including cutting 25 percent of its workforce.
Patients with Wilson disease had been watching for the arrival of a generic Syprine, but Teva’s announcement took them by surprise, Graper said. “We had no idea what to expect, but I had personally hoped for more of a discount.”
Not to be outdone, Valeant followed Teva’s move with the release of its own “authorized” generic of Syprine. It’s a common tactic by brand-name drugmakers who want to compete directly with generic manufacturers without lowering the price of their brand-name product, which some patients continue to prefer. Valeant’s authorized generic sells for $19,119, according to Elsevier.
Lainie Keller, a spokeswoman for Valeant, said the list price for its generic did not reflect discounts the company negotiates with buyers, although she would not disclose those discounts.
She said Valeant’s patient assistance programs have recently been improved to ensure that privately insured patients only pay about $5 a month. Those without insurance can get the medication for free if they meet certain income requirements.
Valeant was once a Wall Street favorite that kept investors happy by buying up old, off-patent drugs like Syprine, sharply raising their prices, and investing little in research and development. That changed in 2015, when questions were raised about the impact this strategy was having on patients, and about the company’s financial practices and its ties to a mail-order pharmacy.
Congressional and federal investigations into the company’s practices followed, leading to a plummeting stock and the departure of the chief executive and major investors.
Graper, whose group accepts donations from Valeant and Teva, confirmed that Valeant’s patient assistance program has improved since members of her group testified before the Senate about how the company’s price increases led them to stop taking their drugs.
Such industry assistance programs have themselves come under scrutiny — including ones run by Valeant — because they have helped make high drug prices more palatable, easing patients’ out-of-pocket burdens while leaving insurers to pay the rest.
Graper expressed hope that if other generic competitors enter the market, the price will continue to fall. “I think we have to wait and see where these two land,” she said. She and others said they were frustrated that despite a flurry of congressional hearings, government investigations and promises by politicians, the price of many of the drugs that stoked the initial outrage remain as high as ever.
In addition to Syprine, Daraprim, an old drug used to treat a serious parasitic infection, is still $750 a pill more than two years after Shkreli became a social media villain for his role in raising the price overnight from $13.50.
The cost of the EpiPen is an exception to the trend. In response to the outcry over the EpiPen’s price, which reached about $600 at its height for a pack of two, Mylan came out with a cheaper, authorized generic. A pack of EpiPens can now be bought for about $300 at many pharmacies.
“I had hoped that something would come of it, that the politicians would take some action, but obviously not much has happened,” Copeland said. “It’s all disheartening.”