Pharma Companies Find Easy Profits in Kids’ Medications

Some drug makers may “game” approval system

As high drug prices make national headlines, the challenge of providing sick children with the kind of medications they can take and tolerate—often by creating liquid formulations of drugs that are already on the market—is seen by some pharma companies as a lucrative opportunity, according to an article posted on the Kaiser Health News (KHN) website.

It’s part of a pattern in which patent laws and government incentives—meant to encourage the development of less-profitable drugs—allow some companies to jump ahead in the market and set high prices, the article says.

The Best Pharmaceuticals for Children Act, for example, allows the approval of competing generics to be delayed if companies test their drugs in children. And the Pediatric Research Equity Act requires more companies to have pediatric-focused drugs clinically assessed in children. These laws have spurred pharma companies to do more in terms of testing and developing pediatric medications, according to the article. The companies are allowed to market these drugs without facing competition for a longer period. But as a result, the treatments cost exponentially more.

Critics say the higher price tags are out of line with the cost of developing kid-friendly remedies.

“The only R&D, if you will, that went into making these [drugs] liquid is finding a solution to dissolve them in, and making sure it was stable and well-absorbed,” said Dr. Thomas Welch, head of the pediatrics department at Upstate Medical University in Syracuse, New York. He coauthored a letter in the New England Journal of Medicine assessing the price increases for two of these drugs––Qbelis, approved in 2016, and Epaned, approved in 2013––which treat hypertension and heart conditions in children.

Qbrelis costs 775 times as much as the generic tablet, while Epaned is 21 times costlier than the off-brand, according to Welch’s letter.

The KHN article points out that if a compound pharmacy filled a prescription for a liquid formulation using the generic liquid lisinopril—the active ingredient in Qbrelis—it would cost up to $20 a month. The patented liquid, though, could yield a monthly bill of $500 to $1,000, depending on how large a dose the child needs. For Epaned, a monthly regimen could cost $500 to $2,000; a compound pharmacy’s formulation of a comparable generic liquid would cost $20 to $80.

Both Qbrelis and Epanded are manufactured by Colorado-based Silvergate Pharmaceuticals. By creating liquid solutions of these drugs that can be dispensed in smaller doses, Silvergate was able to obtain patents for each. It controls the market on them until at least 2030, according to the FDA’s Orange Book, a comprehensive roster of drug approvals.

In other circumstances, the article says, pharma companies could pursue even more market protections from the FDA. For example, if the process of reformulating a drug involves conducting clinical trials in children, manufacturers can win an additional six months of market exclusivity.

Moreover, two pending FDA guides recommend that doctors default to agency-approved drugs rather than similar compounded medications, unless there is a particular chemical difference that makes the compound more effective. Cost isn’t a factor.

Together, the article says, those regulations could make it easier for companies that are looking to profit from limited investment or innovation.

“There’s … an increasing list of companies where it was only about gaming the rules, and not about anything that can be recognized as real pharmaceutical research,” said Dr. Jerry Avorn, a professor of medicine at Harvard Medical School. Silvergate, he added, appears to fit that mold.

Obtaining a compound drug can be logistically difficult for patients (not all pharmacies are certified to make them), and it assumes some trust because the pharmacists involved aren’t held to the same manufacturing standards as for commercially available drugs, the article points out. A 2012 fungal meningitis outbreak linked to the New England Compounding Center left 64 patients dead and raised consumer and regulatory concerns. Ultimately, the outbreak triggered heightened federal oversight of compounding.

Dr. Erin Fox of the University of Utah suggested that the value added by new compounded medications—while meaningful—is counteracted when the price climbs.

“It’s better for patients if we’re using FDA-approved drugs,” she said. “But if no one can afford them, or if [companies] raise prices so much other things are being impacted, then all the FDA approval in the world won’t improve access.”

Source: Kaiser Health News; April 24, 2017.