The Competition Commission has accused Roche of excessive pricing of Trastuzumab‚ known better by its brand name Herceptin.
It is a drug for patients with HER2 positive breast cancer‚ a deadly and aggressive type that usually returns. It prevents it returning in about four out of 10 HER2 positive breast-cancer patients and costs between R500,000 and R550‚000 for a year’s treatment‚ depending on the patient’s weight.
1. Roche’s drug‚ Herceptin‚ is known as a “biological”. It is a newer type of drug that is a living organism. This drug mimics an antibody in the body. Biologicals are much more expensive to make‚ store and transport than regular drugs.
2. The Competition Commission never told the three pharmaceutical companies that are now under investigation that they were being investigated. Pfizer‚ Aspen and Roche learned this on Tuesday through the media statement. Roche and Pfizer confirmed this in their media statements.
3. Roche and the government have been in negotiations for at least 18 months about a price for Herceptin for women in state hospitals. Roche offered a price for Herceptin to government believed to be the lowest in the world. But the negotiations are deadlocked‚ while women die‚ as the government wants a cheaper price. Roche confirmed to The Times the price they offered is close to India’s price, which is about R 110‚000 for about a year’s treatment, and that an agreement with the health department is expected soon.
4. Some of South Africa’s medical aids used to provide Herceptin for nine weeks based on old evidence it could work, and the medical aids ignored newer evidence that shows it has to be given for a year. This means medical aids wasted R75‚000 per patient and offered false hope to them.
Donald Gordon Hospital oncologist Georgia Demetriou said the drug had to be used for a year and it had been known for about five years that nine weeks of the drug did not work to save lives. Many medical aids including Genesis medical aid refuse to provide any biological drugs to patients because they are too expensive. Genesis told The Times it does not pay for biologicals.
5. Discovery Health Medical Scheme is one of the only schemes that provides Herceptin for a year to women with HER2 positive breast cancer. This means many patients with this cancer switch to Discovery to access the drug. Discovery was forced to first pay for the drug in a lawsuit over this by a cancer patient in 2006.
6. The cost of Roche’s Herceptin drug for a full year is about R550‚000. The price is around R110‚000 in India‚ where there are far more patients to buy it. In India the court ordered that a biosimilar (generic) of Herceptin be produced and the price dropped by 75%.
7. Roche has been in trouble before from Indian competition authorities over Herceptin as it allegedly spread rumours about the biosimilar (generic copies) of this drug to doctors, saying it didn’t work. This was so Indian doctors wouldn’t prescribe the cheaper options.
8. Roche has tried to extend its 20-year patent on Herceptin by 13 years in South Africa till 2033. It is now under investigation for this by the Competition Commission. This is not the first time it has done this. After withdrawing its patent in India following court cases‚ it tried to stop biosimilar drugs in India by filing a lawsuit saying it had copyright on the package insert on the drugs that cites studies on the drug. It lost this case.
The Herceptin patent in the US expires in 2019. It has already expired in Europe.
9. The Competition Commission has deemed the half-a-million-rand cost as “excessive pricing” but a market access scientist says South Africa has no standardised way of judging what “unaffordable” means.
In the UK‚ the NHS has a standardised method to look at the cost of a drug and the economic benefit of a life saved to determine when a price is too high. This field of study is called pharma economics.
South Africa does not use such a scientific method to work out when a drug price is fair or too high but looks at prices in similar countries.
Scientist Joao Carapinha says: “What is ‘excessive pricing’ and what is ‘affordable’ have different meanings depending on your perspective. Pharma‚ medical schemes and the government seldom agree on these terms. What’s lacking in South Africa is a scientific approach based on international standards to determine when a medicine is priced excessively and therefore unaffordable.
“The national Department of Health has a lot of work to do to get to this stage.”
10. The high cost of biologicals and new cancer drugs is such a global problem that the United Nations‚ at the request of Ban Ki Moon‚ set up a global panel to look into it. The panel included South Africa’s Director-General of Health‚ Precious Matsoso.
The year-long panel concluded that new drug research could not be paid for only by for-profit companies. It wants governments and NGOs to fund research for new drugs so that the price of drugs can be “delinked” from research costs.
11. The Competition Commission is unhappy that the price of Herceptin in state pilot projects of about R211‚900 is vastly different from the half a million rand in the private sector and says different pricing breaches the Competition Act. But the Medicines Act allows the set price in the private sector to be different to the state price.
The standardised private price of all drugs often subsidises the low state price for majority of South Africans‚ said Vivian Frittelli‚ head of the Generic and Biosimilar Medicines Southern Africa NGO.