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[e-drug] Thalidomide: Price increases for cancer treatment

  • From: "Joana Ramos" <joaninha@comcast.net>
  • Date: Tue, 23 Aug 2005 16:47:38 -0700

E-DRUG: Thalidomide: Price increases for cancer treatment

[Warning - long message. The article below was very long but Joana has provided these extractions for e-drug. It is still long but very important. Thanks Joana. BS]]

In case you missed this last year, here is some more background. Geeta Anand of the WSJ traced the transformation of the infamous thalidomide from an inexpensive drug for leprosy, to its potential to treat wasting from AIDS, and its coincidental development as a cancer drug. She traced its meteoric rise in price once it was found useful against cancer.

Since then, Celgene keeps vastly increasing the price of thalidomide and hence its profits, acknowledging that they charge ‘what the market will bear.” and that it is inline with prices of other cancer drugs. This occurs even though the chemical entity thalidomide is long off-patent in the US, because Celgene has patented the ‘delivery system” for the drug. And when a competing drug to treat multiple myeloma came on the market in 2003, Celgene raised the price yet again. Celgene’s CEO is quoted as expressing quite a cavalier attitude about the drug’s price and affordability.

Some oncologists in both the US and Europe are incensed at the price gouging. The article brings into focus also the issue of the customary passivity of the cancer community in contrast to the AIDS community, especially in the USA . Many cancer patient groups receive significant pharma funding, but maintain that this does not influence their advocacy work or independence. It certainly remains to be seen.

Due to the exorbitant price, a US oncologist describes trying find other drugs for his patients with multiple myeloma, while a Dutch counterpart set up his own pharmacy to sell the drug at cost to hospitals throughout the Netherlands. However, this option is in jeopardy if a Celgene EU-subsidiary receives approval for exclusive marketing rights to Thalomid ( trade name for thalidomide).

Selected excerpts are included below. The full article may be found at

Joana Ramos, MSW
Cancer Resources & Advocacy
7303 23rd Ave. NE
Seattle, WA 98115
Joana Ramos <joaninha@comcast.net>

How Drug's Rebirth as Treatment For Cancer Fueled Price Rises:
Once-Demonized Thalidomide Boosts Celgene's Sales; Patients See Costs Soar

Wall Street Journal - November 15, 2004
Geeta Anand, geeta.anand@wsj.com

Avoiding AIDS Activists

WARREN, N.J. - When Celgene Corp. got its first drug approved, it
priced a 50-milligram capsule at $6. Today, it sells the same
white capsule for nearly five times the original price, or $29.

Little has changed to affect the cost of making the drug since it
was first sold in 1998 as a treatment for leprosy and severe
weight loss, or wasting, caused by AIDS. But today, it is
primarily prescribed for cancer, a disease whose patients and
advocacy groups have shown little interest in fighting for lower
U.S. prices.

"When we launched it, it was going to be an AIDS-wasting drug,"
says Celgene's chief executive, John Jackson. "We couldn't charge
more or there would have been demonstrations outside the
"For patients, the side effect of taking this drug is penury,"
says Raymond Comenzo, a hematologist at Memorial Sloan-Kettering
Cancer Center in New York City.

Thalidomide is inexpensive to make. Fundacao Ezequiel Dias, a
government laboratory in Brazil, sells 100-milligram capsules to
the Brazilian government health system for seven cents. The pills
are given to leprosy and cancer patients free of charge. A
Netherlands pharmacy sells the same dose for about $2.60.


Thalidomide was still being used in poorer countries because it
was cheap and effective in treating leprosy and wasting in
tuberculosis patients. U.S. AIDS patients were importing
thalidomide illegally to treat wasting. Dr. Barer concluded that
Celgene could get the FDA to approve thalidomide, despite its
notoriety, if the company sought to sell the drug for AIDS.

Celgene began clinical trials to show thalidomide could reduce
wasting in AIDS patients but unexpectedly found the amount of
AIDS virus in patients' blood seemed to rise temporarily on
thalidomide. That meant more testing would be needed. Dr. Barer
says he decided on a quicker route: getting the drug approved for
treating leprosy, for which substantial data existed in public
health databases around the world. Once the drug was on the
market for leprosy, doctors could prescribe it for AIDS or any
other disease, a practice known as "off label" prescribing.

The company devised a system for dispensing the drug that
requires, among other things, regular pregnancy tests for
patients of childbearing age. Since thalidomide had been around
for decades and the composition couldn't be patented, Celgene
would eventually patent this system of controlling distribution.

The FDA faced pressure from AIDS activists who wanted access to
thalidomide. In July 1998, the FDA granted Celgene approval to
market thalidomide for leprosy under the brand name Thalomid,
giving the green light to those who wanted to prescribe the drug
off-label for AIDS wasting…….


Only after the price had been set at $6 for each 50-milligram
capsule did the two men fully realize thalidomide's potential to
>treat cancer. …..

Thalidomide was reborn as a cancer medicine just as the drug
was eclipsed by new AIDS medicines that made wasting virtually a
thing of the past in the U.S. Again it was being prescribed
off-label since Celgene hadn't received FDA approval to sell the
drug for cancer.

Celgene, like many small biotech companies, had lost money every year since its founding. In 1998, it reported a loss of $32
million on revenue of $3.8 million. Now it could begin to tackle
those losses. Mr. Jackson says he knew he could charge a lot
more for thalidomide as a cancer drug. The question, he says, was whether to double or triple the price immediately or make more gradual increases. He decided on the latter. In 1999, he
raised the price by 21% to $7.23 from $6 for the 50-milligram
thalidomide capsule. The cost for consumers at pharmacies is
typically between 20% and 25% higher than what Celgene charges to drug distributors.

Celgene's revenue soared to $38 million in 1999 and $85 million
in 2000. …..
As the use of thalidomide spread, some cancer doctors noticed
that they could get the same results with a lower dose. That was
significant because thalidomide can cause a nerve disorder and
sleepiness, especially at higher doses. At the end of 2000, the
company says it found the average daily dose per patient had
fallen by about 25% to 225 milligrams, from 300 milligrams a day
per patient at the start of the year. That meant the average
patient was spending less per day on thalidomide -- $35.70
compared with $43.38 at the start of 1999. Mr. Jackson believed
Celgene could raise the price.

Over 2001 and 2002, he did so several times. The medicine
remained cheaper than many cancer drugs and Mr. Jackson says he
received few, if any, complaints. By the end of 2002, Celgene was
selling the 50-milligram capsule for $11.03. "By bringing it up
every year, it was heading toward where it should be as a cancer
drug," says Mr. Jackson.

It was a time in which "companies just raised the price and
somebody paid the bill and nobody objected," says Margaret
Tempero, a cancer specialist who is the immediate past president
of the American Society of Clinical Oncology.

By the end of 2003, the 50-milligram capsule of thalidomide cost $22.32. In 2003, thalidomide sales nearly doubled to $244 million. Celgene declared its first
profit, of $13.5 million……

Each year, as thalidomide revenue grew, Mr. Jackson plowed more
money into research and development of new medicines. By 2003,
the R&D budget at Celgene had reached $123 million, which
amounted to nearly half of the company's revenue of $271 million…….

As revenue grew, the company raised pay for top officers. In
2003, Mr. Jackson earned $1.8 million in salary and bonus,
compared with $365,000 in 1998. …..


In theory a generic-drug company could sell thalidomide in the
U.S., since the patent on the drug's composition expired long
ago. However, it would need to get the FDA's approval for a distribution system to keep the drug out of the hands of pregnant >women…..

Celgene is seeking FDA approval to market thalidomide for
multiple myeloma; currently, since the drug is only approved for
leprosy, Celgene sales representatives aren't allowed to directly
promote it for other uses.

This year, Mr. Jackson has raised the price of the 50-milligram
capsule twice, by a total of 32%, to take it to $29.44 from
$22.32. The current price of the 200-milligram capsule is $75.60,
or about 36% cheaper than the 50-milligram capsule on a
per-milligram basis. Patients who take 200 milligrams a day are
now paying about three times as much as they did in 1998, while
those with a 50-milligram daily dose are paying nearly five times
as much.

Still, Mr. Jackson says a month of thalidomide for a typical
patient costs only about 60% as much as a month of Velcade,
meaning there's room for more price increases. ….

Oncologists have begun to complain that prices are out of hand. And the
Centers for Medicare and Medicaid Services, the federal agency
that covers health-care costs for seniors and the indigent, has
proposed cutting federal reimbursements for the infused
biotechnology medicines covered at present. …..

Mr. Jackson argues the high prices don't hurt patients. "Either
people are wealthy enough to pay or health insurance pays or our
company gives the medicine away for free," he says. Don Baylor,
the New York Mets' hitting coach last season, takes thalidomide
to treat his multiple myeloma and says in an interview the cost
of the drug is covered under Major League Baseball's
health-insurance plan.

But other patients bear much of the cost themselves. ….. Until Ms. Wright went off the drug recently, she paid $289 a month for her prescription of 50 milligrams a day. "The
price of the drug is outrageous," says Dr. Comenzo, the Sloan-Kettering oncologist who treats Ms. Wright and Mr. Baylor.

Celgene's free drug program, generous by industry standards,
helps patients who earn less than $38,000 a year and also have
assets of less than $10,000. It doesn't apply to people whose
insurance is paying part of the bill. Dr. Comenzo's nurse, Alice
Ford, says she sees many patients who struggle to pay for
thalidomide and don't qualify for Celgene's free drug program.
For that reason, she says, "I discourage the doctor from putting
people on it." Velcade, though more expensive, has been covered
by Medicare.

The two biggest advocacy groups for multiple myeloma haven't made
lower drug prices a priority. "I try to focus on the positive
rather than coming after them on price," says Kathy Giusti,
president of the Multiple Myeloma Research Foundation.
Susie Novis, president of the International Myeloma Foundation,
says taking on drug companies over pricing is a losing battle.
"They won't even discuss it. They say, 'It is what it is,' " she

Dr. Comenzo, while praising the advocacy groups' work, accuses
them of shying away from the pricing issue because they receive
substantial donations from Celgene and Millennium, among other
drug companies. Ms. Giusti says drug-company donations don't
influence her views on pricing. Ms. Novis says she surveyed her
group and found only a minority of U.S. members worried about
price. But she may take up the price issue in Europe, where
patient groups and doctors have raised an outcry.

Celgene licensed the right to market thalidomide in Europe to
Pharmion Corp. of Boulder, Colo. Pharmion sells the drug under a
program for making lifesaving medicines available before they've
been officially approved by regulators. A patient in Europe on a
daily dose of 100 milligrams would pay about $30 a day to get
thalidomide from Pharmion.

Pieter Sonneveld, a hematologist at the University of Rotterdam
in the Netherlands, says his patients complained so much about
Pharmion's price that he helped set up a pharmacy to make
thalidomide and sell it at cost in the Netherlands through
hospital pharmacies. It costs about $2.60 for 100 milligrams, he
says. However, if Pharmion gets marketing approval from European
regulators it would have exclusive rights to sell the drug for
multiple myeloma, making it more difficult for low-cost
alternatives such as Dr. Sonneveld's to survive.