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Thromb Haemost 2002; 88(04): 545-553
DOI: 10.1055/s-0037-1613255
In Focus
Schattauer GmbH

The Upward Spiral of Drug Costs: A Time Series Analysis of Drugs Used in the Treatment of Hemophilia

Edward G. Rogoff
1   Assoc. Prof. of Management, Baruch College, City University of New York
,
Hany S. Guirguis
2   Assist. Prof. of Economics and Finance, Manhattan College
,
Richard A. Lipton
3   Prof. of Clinical Medicine, Albert Einstein College of Medicine
,
Stephanie V. Seremetis
4   Mount Sinai School of Medicine
,
Donna M. DiMichele
5   Assoc. Prof. of Clinical Pediatrics, Weill Medical College of Cornell University
,
George M. Agnew
6   Dir. of Hemophilia Services, New York Blood Center, Inc.
,
Margaret Karpatkin
7   Prof. of Pediatrics, New York University Medical Center
,
Robert J. Barish
8   Cardiovascular Research Foundation and The Lenox Hill Heart and Vascular Institute of New York
,
Robert L. Jones
9   Pres., New York Blood Center, Inc.
,
Celso Bianco
10   Execut. Vice Pres., America’s Blood Centers
,
Barbara D. Knothe
11   Garfunkel, Wild & Travis, P.C.
,
Myung-Soo Lee
12   Assoc. Prof. of Marketing, Baruch College, City University of New York, USA
› Author AffiliationsThis study was supported by a grant from the Hemophilia Association of New York.
Further Information

Publication History

Received 04 February 2002

Accepted after revision 17 April 2002

Publication Date:
09 December 2017 (online)

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Summary

Background

Hemophilia is an expensive disease because its treatment is heavily dependent on costly clotting factor drugs. Over the last nine years, a consortium of three Comprehensive Hemophilia Treatment Centers and other hospitals, which purchased clotting factors for their patients, has seen treatment costs escalate on average 17% annually. Currently, new, even more expensive drugs are entering the market.

Methods

This study analyzes 3,244 purchases that were made over a nine-year period totaling nearly 500 million units of clotting factor, representing every product on the market. Purchases were made both apart from and under the Federal Public Health Service (PHS) discount pricing rules.

Findings

The main cause of the increases was the move to newer, more expensive products. The average price of existing products increased less than 2% per year, but new products were priced, on average, 47% higher than existing products. Overall consumption increased by an average of 5% per year, likely reflecting prophylactic treatment modalities that require greater amounts of clotting factor. Government pricing programs, such as the PHS program, were ineffective or counterproductive at reducing costs.There is a notable absence of competition in this market, with a few dominant companies having a functional monopoly in the largest segments of the market. Prices of older products are not lowered, even when new products are brought to market. A few products that serve small patient groups have had their prices increased substantially.

Interpretation

This escalation is likely to continue as new, more expensive clotting factor drugs are developed. Since these new products are not proven to be any safer or more effective than the current products, this situation creates a risk of intervention by government and insurers to address both treatment costs and exhaustion of patients’ insurance caps. Drug companies are not serving the patients by pricing new, but often very similar, products so aggressively. The trends seen in this patient group will likely be seen in other patient groups in the future. Ultimately, doctors and patients will lose treatment options and health care availability unless collaborative strategies are developed to reduce costs.

Keywords

Hemophilia - clotting factor - pharmaceutical pricing
 

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