Spinraza unfairly priced. Italian and belgian antitrust authotrities urged to investigate on drug24 lug 2019
An innovative drug for a serious and rare disease that mainly affects children: this is Spinraza, for the treatment of SMA (spinal muscular atrophy), the only therapeutic option available for patients who would otherwise remain without any treatment.
Spinraza was introduced on the market (first in the USA, then in Europe and the rest of the world) through the partnership of two companies: Biogen (who owns the drug) and Ionis (who developed the drug). Biogen's market exclusivity on the drug will expire in mid-2029, but already in the first year of marketing (2017) the pharmaceutical company has recovered more than it had invested.
Thanks to a comparative analysis of the annual financial reports of the two companies, Altroconsumo and Test-Achats were able to quantify a margin between development costs and revenues of close to two billion dollars: in just two years, Spinraza's sales yielded USD 2.61 billion, aganst an investment of 648 million. That is, every dollar invested has already yielded four times as much.
In Italy, the "ex-factory" price, i.e. the base price for the negotiations with the National Health Service (NHS) leading to the actual final price, has been set at EUR 70,000 plus VAT per vial. The final price is covered by confidentiality, but on the basis of information collected from several sources, Altroconsumo can reasonably say that, for each patient who is administered Spinraza, the NHS spends EUR 210,000-280,000 per year (depending on how many doses are needed) plus VAT. In Belgium, the price of a bottle of Spinraza is EUR 88,300. The treatment of a patient costs EUR 529,800 in the first year, then EUR 264,900 in the following years (more doses are needed at the beginning of treatment). The drug has been reimbursed since 2018 under a temporary agreement. The price negotiated with the firm remains secret to this day.
These figures convinced Altroconsumo and Test-Achats to report Biogen to the Antitrust Authorities for alleged abuse of its dominant position, because the disproportion between the costs actually incurred to bring Spinraza on the market and the price paid by healthcare systems is so excessive as to be unfair.
"We are asking the Belgian competition authority to find an abuse of a dominant position, to order its cessation and to impose a fine on Biogen," says Julie Frère, spokesperson for Test Achats. "Such practices, which jeopardize the viability of our health insurance system, are unacceptable".
"What we denounce here, after the Council of State confirmed the decision of the Competition Authority in the Roche and Novartis cases - says Ivo Tarantino, Head of External Relations at Altroconsumo - is yet another example of how the pricing of medicines has become unsustainable and no longer justifiable simply by the claim that pharmaceutical companies need to recoup their investments in research and innovation. On one hand, it is fair and fundamental to acknowledge the costs and the risk of failure incurred by companies who invest in R&D, while on the other, it is also true that this cannot justify a race to the highest possible price, a practice the pharmaceutical sector seems to have engaged in for years now.ʺ
The prices of innovative drugs are increasingly detached from any real-life criteria - the costs of development and manufacturing and the fair profit that guarantees future innovation - and are instead determined by the drug industry with the only aim of exploiting the willingness and ability to pay of Countries, thus becoming unsustainable.
Reporting potential abuses of dominant position to Antitrust Authorities, demonstrating the unfairness of the price charged, is the aim of a project that Altroconsumo and Test-Achats are pursuing out with the support of Open Society Foundations.
"A fairer price for innovative drugs must be possible. Altroconsumo has always campaigned for patients’ access to medicines and for the sustainability of care, as it did in the Avastin-Lucentis and Aspen Pharma cases, which have become fundamental building blocks of competition law enforcement in the pharmaceutical sector," concludes Ivo Tarantino.