Big Pharma and the Cost of Medicine

Updated: Mar 21

This week I saw an article from the CEO of Pfizer discussing his negotiations with the Trump administration for the Covid-19 vaccine. I'll also read Dr. Bourla's pitch on how Pfizer prices their medication. For personal reasons, below are real-life examples where the "fluffy" equity marketing does not match the facts in the data.



Dr. Albert Bourla recalls the fraught diplomacy with Jared Kushner to distribute the Covid-19 shot at warp speed to America first—and then the rest of the world.





https://www.forbes.com/sites/forbesdigitalcovers/2022/03/07/pfizers-ceo-reveals--negotiations-with-the-trump-white-house-and-how-the-vaccine-was-priced/?sh=612b4b5e37fe




"When we started the Covid-19 project, I had made clear that return on investment should not be of any consideration. By May 2020, we still had never spoken of a price for the vaccine or calculated revenue streams. But several governments had started procurement discussions, and they all wanted a price. It was time to make a decision."

The way we price our medicines is by calculating the value they bring to patients, to the healthcare system, and to society. Unlike what some may believe, good medicines reduce, rather than increase, the cost of a healthcare system. We try to calculate this economic value. For example, if one hundred people take a heart medicine and as a result we have five fewer heart attacks, we calculate the cost that these five heart attacks would generate to the healthcare system (ambulance rides, hospital stays, tests, doctors, caregivers, work days lost, etc.) and compare it to the cost of the medicine for one hundred people. Of course, there are many more nuances to this economic value. How does one put a price on the avoidance of human pain? This, in my opinion, is truly invaluable.

Because of personal reasons, when I saw the description above on medication pricing that the CEO of Pfizer claims to take, I had to break it down and provide some alternative facts. So let's get to it.


A heart attack occurs when blood flow to the heart becomes blocked. Unless the blood supply is quickly restored, the interruption can cause damage or even death to parts of the organ. Though heart attack is a leading killer of adults in the U.S., timely treatment can save lives and prevent long-term disabilities.


  • According to the National Heart, Lung, and Blood Institute, heart attack treatment works best when it's given right after symptoms[1] occur, and a patient experiencing an attack should be taken to the emergency room or transported there by ambulance.

  • For patients without health insurance, an emergency room visit typically costs $150 -$3,000 or more, depending on the severity of the condition and what diagnostic tests and treatment are performed. For patients covered by health insurance, out-of-pocket cost for an emergency room visit typically consists of a copay, usually $50 -$150 or more, which often is waived if the patient is admitted to the hospital. Depending on the plan, costs might include coinsurance of 10% to 50%.

  • In the ER, a doctor may administer " "super aspirin" such as clopidogrel (Plavix)[2], which, according to Consumer Reports[3], typically costs $254 per month for one 75 mg pill per day. Or, an ER doctor may give the patient nitroglycerin tablets[4], which typically cost $.20-$1.10 per pill.

  • According to the Agency for Healthcare Research and Quality[5], the average length of hospitalization and related costs for heart attack patients is 3-5 days at $21,500 per stay. Costs for patients with insurance may include a deductible, plus 10%-20% or more of the total bill, which could easily reach the yearly out-of-pocket maximum. Treatment[6] will vary depending on the severity of the condition and the amount of heart damage present.

  • Patients may be treated with a category of intravenous drugs known as thrombolytics[7] or clot busters. According to a study[8] in the medical journal Stroke, the additional costs of thrombolysis (using medication to break up and dissolve blood clots) during the first hospitalization costs approximately $5,978 per patient. Doctors may administer other drugs, including intravenous or subcutaneous forms of the anti-coagulant heparin. According to the book "Hospital Medicine"[9] by Robert M. Wachter, Lee Goldman, and Harry Hollander, this can include Dalteparin (Fragmin)[10], which typically costs $51 a day for 100 U/kg twice daily, and Enoxaparin (Lovenox)[11] which typically costs $55 a day for 1 mg/kg twice daily. Treatment may also include drugs called beta blockers[12], which typically cost $6 -$170 per month depending on whether a generic or brand name drug is used, or statins[13], which according to Consumer Reports[14], cost $35- $200 or more a month.

  • Other medical procedures that may be required include bypass? surgery (about?$70,000-$200,000); corrective heart surgery ($30,000-$200,000 or more);?and treatment with angioplasty and stents?($11,000-$41,000?or more).

Source: https://health.costhelper.com/heart-attack-treatment-cost.html


To stay on the conservative side, I chose an uninsured person, and the median number I'm pricing the cost of hospitalization higher than it probably is to prove that while Pfizer may be saying they are creating medicine for the people (all people) and invested in "equity" the opposite is true when it comes to cardiac medication, and I'd also stretch and say the price of their Covid-19 vaccine and efficacy, but that is an entirely different and highly complicated subject, but I will "circle back on that subject. There is a reason the country of India rejected it. (I'll just leave it there). Let's get back to the example Dr. Bourla uses above in the attached Forbes article, a heart attack.

  • ER Visit - $1575 median cost

  • nitroglycerin tablets[4] .65 x 4 = $2.60

  • 5 day stay uninsured estimate $21,500

  • clot buster medication unisured $5978

  • Lovenox for 5 days unisured $275 ($55.00 x 5)

  • Dalteparin for 5 days uninsured $255 ($51.00 x 5)

  • Beta Blocker median cost for a month uninsured $88/30 $2.93 per day (5 day stay) = $14,65

  • Statin median cost for a month uninsured $117.15/30 = $3.90 per day (5 day stay ) = $19.50


 

From a median cost perspective, given the "average" cost of a heart attack WITHOUT SURGERICAL INTERVENTION UNINSURED IS $29,619. Keep in mind this is an uninsured estimate median number."Median is a value or quantity at the midpoint of a frequency distribution of observed values, such that there is an equal probability of falling above or below it."This number is also NOT manipulated for location (i.e., the cost of a high-end private major city healthcare facility vs. a rural lower socioeconomic state-run facility).


What is the difference between heart attack and heart failure? Pfizer's Heart attack and heart failure are two conditions that share many of the same risk factors and underlying health conditions.


A heart attack is when blood flow is partially or completely cut off to a part of the heart.


Heart failure is when the heart cannot effectively pump enough blood to the various parts of the body.


Although they have different causes, symptoms, and treatments, the steps for preventing heart attack and heart failure are similar. "These mainly include eating a healthy diet, getting regular exercise, and managing underlying health conditions.


Since Dr. Albert Bourla used a heart attack as his pricing example to explain how Pfizer prices medication; in the spirit of transparency and data quality I needed to go through the above exercise and use the same pricing mechanism for #congestiveheartfailure.


Source: https://www.ahajournals.org/doi/10.1161/CIRCHEARTFAILURE.117.004873



The link above is from the journal of the American Heart Association. It is based on a study over eight years of the mean or the average cost of congestive heart failure hospitalization costs."Understanding the difference between a heart attack and heart failure is described above. Both are deadly and require immediate care, lifestyle changes, and generally lifelong medication.


 

Abstract

Background: Heart failure (HF)—a serious and costly condition—is increasingly prevalent. Pfizer's We estimated the US burden, including emergency department (ED) visits, inpatient hospitalizations, associated costs, and mortality. Methods and Results:

We analyzed 2006 to 2014 data from the Healthcare Cost and Utilization Project Nationwide Emergency Department Sample, the Healthcare Cost, and Utilization Project National (nationwide) Inpatient Sample, and the National Vital Statistics System. International Classification of Disease codes identified HF and comorbidities. Burden was estimated separately for ED visits, hospitalizations, and mortality. In addition, criteria were applied to identify total unique acute events. Rates of primary HF (primary diagnosis or underlying cause of death) and comorbid HF (comorbid diagnosis or contributing cause of death) were calculated, age-standardized to the 2010 US population. In 2014, there were an estimated 1 068 412 ED visits, 978 135 hospitalizations, and 83 705 deaths with primary HF. There were 4 071 546 ED visits, 3 370 856 hospitalizations, and 230 963 deaths with comorbid HF. Between 2006 and 2014, the total unique acute event rate for primary HF declined from 536 to 449 per 100 000 (relative percent change of –16%; P for trend, <0.001) but increased for comorbid HF from 1467 to 1689 per 100 000 (relative percentage change, 15%; P for trend, <0.001). HF-related mortality decreased significantly from 2006 to 2009 but did not change meaningfully after 2009.


For hospitalizations with primary HF, the estimated mean cost was $11 552 in 2014, totaling an estimated $11 billion.

Keeping Dr. Bourla's pricing approach; if the average hospitalization cost per incident of #heartfailure is $11,552 per patient, then I have to ask the question of WHY one of the medicines that Pfizer developed Vyndamax (oral capsule 61 mg) to treat a form of HF retails for a CASH paying customer for $20,446 for 30 pills depending on the pharmacy and location? According to GoodRx, a discount drug plan for those without insurance TAFAMIDIS (Vyndamax) is around $18,976.28, 24% off the average retail price of $25,056.16. It was approved by the FDA in 2019 and is used to treat cardiomyopathy (a heart muscle disease) caused by transthyretin amyloidosis.


Building on this cost and Dr. Bourla's description of how Pfizer prices medicine, if a patient with Transthyretin amyloid cardiomyopathy, or ATTR-CM, type (heart failure) is hospitalized twice a year at an average cost of $23,104 (per the eight year study above) than one-month dosage of 30 pills at one pill per day cost MORE retail than two hospitalizations with an average of 6 days down from 9 based on Web MD study attached done in 2010.

https://www.webmd.com/heart-disease/heart-failure/news/20100601/hospital-stays-shorter-heart-failure#:~:text=June%201%2C%202010%20%2D%2D%20The,being%20sent%20home%20too%20soon.


Now, Pfizer may say that the cost is based on their research expenses and the idea that ATTR-CM is a rare form of congestive heart failure. A recent article written by C0ngestive Heart Failure Specialist disagrees and says that ATTR-CM is underdiagnosed and, in fact not rare but missed. ATTR-CM symptoms can mimic other more common cardiac conditions, which makes it challenging to diagnose, and awareness of the condition remains low – even among doctors.


However, this trend is changing as specialists get more data, research, and get better testing mechanisms to identify this form of heart failure.


"Several heart failure physicians, specifically those who treat patients with cardiomyopathy caused by transthyretin amyloidosis (ATTR-CM), are calling attention to the extraordinarily high price of tafamidis and tafamidis meglumine (Vyndamax and Vyndaqel; Pfizer), both of which received orphan drug designation and were approved by the US Food and Drug Administration in 2019."


With a list price of $225,000 per year, tafamidis is the most expensive cardiovascular drug on the market. Mathew Maurer, MD (Columbia University Irving Medical Center, New York, NY), who published his views along with Jerry Gurwitz, MD (University of Massachusetts Medical School, Worcester), January 8, 2020, in JAMA Cardiology, told TCTMD the high prices for tafamidis “are not justified and appear to be a particularly egregious example of price gouging.”


The out-of-pocket costs for most patients are challenging to pin down given rebates and subsidies, but Maurer said his patients pay roughly $1,000 to $2,000 each month if they don’t receive additional financial support. “It’s anxiety-provoking,” he said. “If nobody believes that, come to my clinic where I have to sit with patients who are worried how they’re going to get it, if it’s going to be sustainable, and if it’s going to work out. That’s a shame if you’re sick.”

Source: https://www.tctmd.com/news/outrageous-225000-year-list-price-tafamidis-draws-outcry


That quarter-of-a-million dollar per year price tag might be justified if ATTR-CM was an extremely rare condition, but experts say that just isn’t the case. To TCTMD, Ronald Witteles, MD (Stanford University Medical Center, CA), who is co-director of the amyloid program at his institution, said he was “surprised and not happily so” when Pfizer announced the price of tafamidis following the FDA approval.

“It was priced like a drug is typically priced for a truly rare disease, which this simply isn’t,” he said, adding that if there were 1,000 people or fewer in the country with ATTR-CM, the inflated price tag might be expected. “It’s not common like high blood pressure or coronary artery disease, but it is definitely not truly rare.”

Last year Pfizer made 81.3 Billion dollars and projects to make between $100 and 103 Billion in 2022. In their annual report besides the obvious covid vaccine return, Vyndamax and Vyndaqel was listed as one of the drivers of the 2021 historic earnings. See below:



 


PFIZER REPORTS FOURTH-QUARTER AND FULL-YEAR 2021 RESULTS

QUARTERLY FINANCIAL HIGHLIGHTS (Fourth-Quarter 2021 vs. Fourth-Quarter 2020) Fourth-quarter 2021 revenues totaled $23.8 billion, an increase of $12.2 billion, or 105%, compared to the prior-year quarter, reflecting operational growth of $12.3 billion, or 106%, as well as an unfavorable impact of foreign exchange of $135 million, or 1%. Compared to the prior-year quarter, fourth-quarter 2021 revenue growth was unfavorably impacted by approximately $500 million, or 4%, as a result of fourth-quarter 2021 having four fewer selling days in the U.S. and four fewer selling days in international markets. This unfavorable impact from fewer domestic and international selling days negatively affected the growth rates of products across the entire portfolio. Fourth-quarter 2021 operational growth was primarily driven by:

▪ Comirnaty(1), which contributed $12.5 billion in direct sales and alliance revenues;

▪ Eliquis globally, up 19% operationally, driven primarily by continued increased adoption in non-valvular atrial fibrillation and oral anti-coagulant market share gains;

▪ Biosimilars, which grew 30% operationally to $680 million, primarily driven by recent oncology monoclonal antibody biosimilar launches of Ruxience (rituximab), Zirabev (bevacizumab), and Trazimera (trastuzumab), as well as growth from Retacrit (epoetin) in the U.S.;

▪ Vyndaqel/Vyndamax globally, up 34% operationally, primarily driven by continued strong uptake of the transthyretin amyloid cardiomyopathy indication in the U.S. and Japan;


Pfizer’s contract development and manufacturing organization, up 25% operationally, reflecting growth from the manufacturing of legacy Upjohn products for Viatris(6) since the close of the UpjohnMylan transaction in November 2020 and certain Comirnaty-related manufacturing activities performed on behalf of BioNTech(1);


▪ Paxlovid, which contributed $76 million in U.S. sales after the U.S. Food and Drug Administration (FDA) authorized the treatment for emergency use(8) in late-December 2021; and

▪ Xeljanz, up 4% operationally, driven primarily by favorable wholesaler inventory buying patterns in the U.S., as well as growth in the emerging markets from the rheumatoid arthritis indication,


Here is the earnings release for 4Q2021 compared to full-year 2020. https://s28.q4cdn.com/781576035/files/doc_financials/2021/q4/Q4-2021-PFE-Earnings-Release.pdf


Attached is a previous blog that I wrote on Pfizer earnings and everything #vyndamax and the fact that the population that needs this medicine is retired and generally on a fixed income which makes this life saving, live preserving, life-enhancing medicine unaffordable even with company financial assistance, pharmacy benefits and government programs. Here it is: https://www.melissamullamphy.com/post/hasn-t-pfizer-made-enough-money


Given that Pfizer CEO Albert Bourla received $24.3 million in total compensation for 2021 perhaps he can afford a heart medicine that retails for a quarter-million dollars a year for 360 total pills but I can assure you the population that needs this medicine can not.

https://www.cnbc.com/2022/03/18/pfizer-ceo-albert-bourla-received-24point3-million-in-total-compensation-for-2021.html


Right now you are set up to break records in 2022 to possibly make up to or over 103 billion, I'm thinking that you may have some room to reduce the cost of Vyndamax if you are truly branding Pfizer as a company that wants to change its reputation to be for the people, all people, regardless of socioeconomic status. "We had a chance to gain back the pharmaceutical companies reputation, which had been under fire for the last two decades. In the U.S., pharmaceuticals ranked near the bottom of all sectors, right next to the government, in terms of reputation." (Forbes) article above.


I realize there is a lot here and I have not even touched the covid-19 vaccine but it is critical that patients understand that what #bigpharma may say, may not be exactly the way they operate across the board.


Finally, here is an updated 2020 article written by cardiologists trying to get attention to make the medicine affordable. https://www.fiercepharma.com/marketing/pfizer-s-blockbuster-to-be-vyndaqel-too-costly-for-heart-patients-study-suggests


DO BETTER #PFIZER




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