[Ip-health] Korean A-7 Prices Compared to U.S. Prices
James Love
james.love@cptech.org
Thu Aug 3 09:16:05 2006
(The tables are formated for a fixed space font like courier).
http://www.cptech.org/blogs/drugdevelopment/2006/07/korean-7-prices-
compared-to-us-prices_31.html
Monday, July 31, 2006
Korean A-7 Prices Compared to U.S. Prices
by Julie Patel
CPTech was asked by Heeseob Nam to compare prices in the United
States (U.S.) and Korea for the certain medicines (in this case
cancer drugs), including Iressa (for lung cancer), Velcade (for blood
cancer), Gleevec (forchronic myeloid leukemia) and Temodar (for brain
cancer), for which we were able to obtain US and Korean prices.
One objective is to compare the prices that the US government pays
for medicines to the prices that the Korea government is obligated to
pay, under the so called A-7 Pricing Agreement.
The A-7 pricing agreement was recently described by USTR as follows:
"In 1999, the United States and Korea reached agreement on how new
innovative drugs were to be priced (based on A-7 pricing or the
average ex-factory price of A-7 countries, i.e., United States,
United Kingdom, Germany, France, Italy, Switzerland, and Japan) and
reimbursed (based on Actual Transaction Price [ATP]). Since its
implementation, anomalies have surfaced. A June 2004 industry survey
revealed that A-7 prices have only been granted to 33 percent of new
products since April 2000. Because of Korea=92s restrictive application
of the A-7 pricing methodology, U.S. drug companies have decided not
to introduce at least nine new products in Korea from 2000 to the
present. In December 2004, the United States proposed that Korea
issue a one-page justification for when it decides not to provide A-7
pricing for new medicines. The proposal is currently under
discussion." 2005 Trade Policy Agenda and 2004 Annual Report of the
President of the United States on the Trade Agreements Program.
Office of the United States Trade Representative. Section III.
Bilateral and Regional Negotiations (full document available here)
We looked at three different measures of US prices, and compared them
to the Korean A-7 prices, provided by Mr. Nam.
1. The U.S. Big 4 price which is only available to Veterans
Administration, Department of Defense, Public Health Service (Indian
Health Service), and U.S. Coast Guard customers and are based on
pricing calculations outlined under the U.S. Public Law.
2. The U.S. Federal Supply Schedule Price which is multiple award,
multi-year federal contract that is available for use by any Federal
Government agency. It satisfies all Federal contract laws and
regulations. Pricing is negotiated based on how vendors do business
with their commercial customers. The FSS program also provides
additional opportunities for savings to the customers with negotiated
quantity and tier discounts.
3. The U.S. retail price as offered by Drugstore.com, for someone
who does not have insurance. This price is normally higher than the
prices paid by US consumers who have private insurance or other
methods of obtaining negotiated prices.
4. The Korean prices determined by a 1999 A-7 pricing agreement.
PRELIMINARY CONCLUSIONS
For all products for which we have data, the prices paid by the US
government, under the "big four" or FSS schedules, were always lower
than the prices that Korea must pay under the A-7 pricing agreement.
In some cases, the differences were very large. Compared to the "Big
4" prices, the A-7 prices were 20 to 84 percent higher.
Prices for four drugs
(price per year or completed treatment)
<pre>
Drug Big 4 FSS A-7
Iressa $14,516 $18,775 $23,696
Velcade $47,991 $47,991 $57,685
Gleevec(600) $28,654 $43,898 $52,831
Temodar $16,935 $16,935 $20,255
</pre>
As a share of income, the differences are even more clear. In the
table below, current prices are expressed as a percentage of 2004 per
capita GNI ($14,000 in Korea, and $41,440 in the U.S.), illustrating
the relative hardship that Korea faces with the A-7 pricing agreement.
Prices as a share of income
<pre>
Drug Big 4 FSS A-7
Iressa 35% 45% 169%
Velcade 116% 116% 412%
Gleevec(600) 69% 106% 377%
Temodar 41% 41% 145%
</pre>
For the three products available from drugstore.com, A-7 prices were
higher for two, and lower for one. The Drugstore.com prices are
prices faced by uninsured persons.
Prices
(price per year or completed treatment)
<html>
DrugDrugstore.com A-7
Iressa $21,964 $23,696
Velcade na $57,685
Gleevec(600) $48,769 $52,831
Temodar $28,523 $20,255
</pre>
<------------Data on the four drugs-------------------->
IRESSA
Iressa is indicated as monotherapy for the continued treatment of
patients with locally advanced lung cancer. The recommended daily
dose of IRESSA is one 250 mg tablet with or without food. Treatment
is continued as long as the patient continues to benefit.
For patients receiving Iressa (250mg/day) it will cost per day,
month, and year:
U.S. Big 4: $39.88/day, $1,116.64/Mo, $14,516.32/Yr
U.S. FSS: $51.58/day, $1,444.24/ Mo, $18,775.12/ Yr
U.S. Drugstore.com: $60.34/day, $1,689.52/ Mo, $21,963.76/ Yr
Korean A7: $65.10/day, $1,822.80/ Mo, $23,696.40/ Yr
VELCADE
Velcade is used to treat a type of blood cancer called multiple
myeloma. It is a cancer of the plasma cell, an important part of the
immune system that produces antibodies to help fight infection and
disease.
Velcade is given by injection into the bloodstream twice a week for
two weeks (days 1, 4, 8, and 11) followed by a 10-day rest period
(days 12-21). This three week treatment schedule is considered as ONE
CYCLE of treatment. A physician will decide how many cycles a patient
will receive depending on their particular stage of cancer.
For patients receiving Velcade (3.5 mg) 2x/week for 2 weeks will cost
per month (about 1 cycle), and per year (about 17 cycles):
U.S. Big 4: $2,823/Mo, $47,991/Yr
U.S. FSS: $2,823/Mo, $47,991/Yr
U.S. Drugstore.com: Unavailable
Korean A7: $4,807.04/Mo, $57,684.48/Yr
GLEEVEC
Gleevec is indicated for the treatment of patients with chronic
myeloid leukemia (CML) in blast crisis, accelerated phase, or in
chronic phase after failure of interferon-alpha therapy. CML is a
type of cancer in which the bone marrow produces an excessive number
of abnormal white blood cells. These abnormal cells suppress the
production of normal white blood cells, which act to protect the body
against infection. In time, the abnormal cells spread to sites
outside of the bone marrow.
The recommended dosage of Gleevec is 400 mg/day for patients in
chronic phase CML and 600 mg/day for patients in accelerated phase or
blast crisis. The prescribed dose is administered orally, once daily
with a meal and a large glass of water. Treatment is continued as
long as the patient continues to benefit. Gleevec is sold in 100mg
tablets.
For patients receiving Gleevec (400mg/day) will cost per day, month
and year:
U.S. Big 4: $52.48/day, $1,469.44/Mo, $19,102.72/Yr
U.S. FSS: $80.40/day, $2,251.20/Mo, $29,265.60/Yr
U.S. Drugstore.com: $89.32/day, $2,500.96/Mo, $32,512.48/Yr
Korean A7: $96.76/day, $2,709.28/Mo, $35,220.64/Yr
For patients receiving Gleevec (600mg/day) will cost per day, month,
and year:
U.S. Big 4: $78.72/day, $2,204.16/Mo, $28,654.08/Yr
U.S. FSS: $120.60/day,$3,376.80/Mo, $43,898.40/Yr
U.S. Drugstore.com: $133.98/day,$3,751.44/Mo, $48,768.72/Yr
Korean A7: $145.14/day, $4,063.92/Mo, $52,830.96/Yr
TEMODAR
Temodar is used to treat adults newly diagnosed with a form of brain
cancer (glioblastoma multiforme) while also being treated with
radiotherapy and then used as a maintenance treatment. The daily dose
of Temodar capsules for a given patient is calculated by the
physician, based on the patient's body surface area (BSA) which is
based on a person's height and weight. The resulting dose is then
rounded off to the nearest 5 mg. Patients continue to take Temodar
until their physician determines that their disease has progressed,
up to two years, or until unacceptable side effects of toxicities occur.
On average patients newly diagnosed with this type of brain cancer
are administered Temodar orally for 42 days concomitant with focal
radiotherapy followed by maintenance Temodar for 6 cycles, in which
each cycle consists of 5 days of treatment and 23 days of rest, with
varying dosages dependent on a person's BSA and response to
treatment. This treatments constitutes at one treatment procedure and
will be the basis for our calculations.
For instance, a man who is 6 feet tall, weighs 190 pounds and has a
BSA of 2.1 would have the following drug course and cost per
TREATMENT PROCEDURE (includes initial 42 days of 160mg Temodar
treatment and 6 cycles (Cycle 1 with 315mg and Cycles 2 through 6
with 420mg of Temodar) thereafter):
Cost per treatment procedure (72 days of actual treatment):
U.S. Big 4: $16,935.06
U.S. FSS: $16,935.06
U.S. Drugstore.com: $28,523.38
Korean A7: $20,255.06
Collective (total) milligrams (mgs) of Temodar taken by a person per
treatment procedure is 18,795 mgs.
--
Posted by Julie Patel to Drug Development (with access) at 7/31/2006
09:07:00 PM
---------------------------------
James Love, CPTech / www.cptech.org / mailto:james.love@cptech.org /
tel. +1.202.332.2670 / mobile +1.202.361.3040
"If everyone thinks the same: No one thinks." Bill Walton