Feature

Gleostine price hike draws fire


 

NextSource Pharma recently hiked the price for Gleostine (lomustine), a treatment approved for Hodgkin lymphoma and brain cancer, by 1,400%, adding it to a growing list of drugs without competition that have seen significant price increases.

In this case, the price tag for Gleostine jumped from about $50 to $786 in the 3 years since it was acquired by NextSource Pharma.

PCMA President Mark Merritt PCMA
Mark Merritt
The manufacturer cited a number of factors for the decision to raise the price, including increased costs for a key manufacturing component, the cost of providing discounted drugs to the Medicaid program and uninsured patients, and higher regulatory fees. The company also noted that they maintain an inventory of 12 months of “safety stock” in the United States to prevent shortages, something that was an issue with Gleostine before NextSource Pharma took over manufacturing.

But critics point to a lack of competition as the real driver behind these types of price increases.

The Pharmaceutical Care Management Association (PCMA), the lobbying group representing pharmaceutical benefit managers, called out the NextSource Pharma and other companies that are hiking the prices of long-standing brand name drugs, saying that they are raising prices simply because they can.

“Excessive pricing is a problem,” Mark Merritt, PCMA president and CEO, said in an interview. “The Gleostine example just shows something actually pretty simple. Companies raise prices the same way, and for the same reason, that any other business does: because they have the pricing power to do it and because there is not a lot of competition to force the price down.”

Greater competition is the answer, Mr. Merritt said, and he praised recent efforts by the Food and Drug Administration in that area. For instance, FDA Commissioner Scott Gottlieb, MD, is aiming to streamline the generic drug approval process to make it less expensive and time consuming, which could bring more competitors into the marketplace, Mr. Merritt said.

The FDA has also released a list of off-patent, branded drugs without generic competition aimed at highlighting those drugs that are ripe for generic competition.

“I think when you put a watch list on that, when they know they are being watched by regulators and policy makers, that they may be called to explain their price hikes, that’s a pretty good disincentive,” Mr. Merritt said.

But one important element to building a competitive market is getting manufacturers interested in creating generic versions of a product like Gleostine, which has a small market. Mr. Merritt said that’s an issue that policymakers will have to tackle.

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