If advisors think prescription drug costs are killing their group benefits business, they ain’t seen nothing yet
Patients suffering from multidrug resistant tuberculosis received a big shock recently when the price of Cycloserine jumped by 2,000% putting prescription drug costs in the spotlight and jeopardizing advisors’ group benefits business in the process.
“Everyone in the TB community in North America has been going crazy over the last week or so when they realized the price had gone up by over 2,000 per cent," said Amir Attaran, a professor of law and medicine at the University of Ottawa who specializes in drug policy. “It's people coming from hedge funds. It is people looking to make a quick buck."
The Cycloserine price hike is part of a trend in the pharmaceutical industry where small pharmaceutical companies are buying up drugs where patents have expired. In this case the drug was originally developed by Eli Lilly in the 1960s. Last year, Rodelis Therapeutics acquired the drug from the Chao Center at Purdue University, a non-profit that had been given the North American rights by Lilly in 2007.
Rodelis immediately hiked the price from US$15 per pill to US$360 upon acquiring Cycloserine. After a New York Times article ran earlier this week about a price increase for another infectious disease drug, the price of Cycloserine dropped to US$35 per pill, a more palatable 133% increase. It may still be hard for plan sponsors and advisors to swallow.
While it appears in this instance that the negative publicity from the price hike will result in the drug’s rights reverting to the non-profit it acts as a reminder to advisors that drug prices on off-patent drugs can skyrocket putting a crimp in your group benefits business.
"Ottawa needs to regulate the price of those unpatented medicines … to prevent this happening again," Attaran said.
“Everyone in the TB community in North America has been going crazy over the last week or so when they realized the price had gone up by over 2,000 per cent," said Amir Attaran, a professor of law and medicine at the University of Ottawa who specializes in drug policy. “It's people coming from hedge funds. It is people looking to make a quick buck."
The Cycloserine price hike is part of a trend in the pharmaceutical industry where small pharmaceutical companies are buying up drugs where patents have expired. In this case the drug was originally developed by Eli Lilly in the 1960s. Last year, Rodelis Therapeutics acquired the drug from the Chao Center at Purdue University, a non-profit that had been given the North American rights by Lilly in 2007.
Rodelis immediately hiked the price from US$15 per pill to US$360 upon acquiring Cycloserine. After a New York Times article ran earlier this week about a price increase for another infectious disease drug, the price of Cycloserine dropped to US$35 per pill, a more palatable 133% increase. It may still be hard for plan sponsors and advisors to swallow.
While it appears in this instance that the negative publicity from the price hike will result in the drug’s rights reverting to the non-profit it acts as a reminder to advisors that drug prices on off-patent drugs can skyrocket putting a crimp in your group benefits business.
"Ottawa needs to regulate the price of those unpatented medicines … to prevent this happening again," Attaran said.
