[Ip-health] Celgene to Price Cancer Medicine At $6,195 a Month

[James Love]

The comment below is from Joana Ramos...

----------
Begin forwarded message:

From: Joana Ramos <joaninha@comcast.net>
Date: July 3, 2006 9:33:31 AM EDT
Subject: [RxPolicy] Celgene to Price Cancer Medicine At $6,195 a Month

<snip>
> Morgan Stanley estimates Celgene stands to make a 97% gross margin
> -- the profit excluding marketing and corporate costs -- on
> Revlimid, ......A Celgene spokesman said Morgan Stanley's estimate
> was inaccurate, but he declined to provide the company's gross-
> profit margin on the drug, citing competitive reasons.
>
> Celgene said it has established free drug programs and made
> contributions to independent charities to try to make sure patients
> could get treatment regardless of their ability to pay or their
> insurance coverage.
>
My comment: The reality is that much of the time,  these programs are
a sham. What we are hearing from across the country is that many
patients,---including  those on Medicare Part D whose plans either do
not cover Thalomid or who have now entered the "donut hole" of no  rx
coverage-- are being turned  down by the  Patient Assistance  Program
for reasons like having income or assets too high ( i.e. greater than
the Federal poverty level), or simply for being eligible for Medicare
Part D, regardless if they have enrolled. ( it's voluntary). Insured
patients are likewise finding that the  co-pay assistance programs
that the pharmas  set up in the wake of Part D  are now refusing to
take  new applications, saying that they are out of funds.  Patient
advocates are hearing from more & more desperate patients on a weekly
basis, and there is no recourse for them.

Joana


URL for this article:
http://online.wsj.com/article/SB115170926747095892.html

Wall Street Journal

Celgene to Price
Cancer Medicine
At $6,195 a Month
By GEETA ANAND
July 1, 2006; Page A4
In another example of an aggressive pricing strategy for cancer
drugs, Celgene Corp. said it will sell Revlimid for $6,195 a month,
more than $74,000 annually, for patients with multiple myeloma.

Wall Street analysts said the high price was widely expected in the
current atmosphere in which companies bring new cancer treatments to
market at premiums over existing treatments.

"Every time a drug is priced, it's higher," said Sapna Srivastava, a
biotechnology analyst at Morgan Stanley who covers the company.
"Right now it's sustainable, but it's not sustainable in the future."

The Summit, N.J., company's shares, which had risen in recent days in
anticipation of aggressive pricing, rose 20 cents to $47.43 in 4 p.m.
composite trading Friday on the Nasdaq Stock Market.

The Food and Drug Administration approved the drug late Thursday for
use in combination with dexamethasone in patients with multiple
myeloma, a cancer of the bone marrow. The drug was already on the
market for a rare blood disorder called myelodysplastic syndrome at a
monthly price of $4,600, or about $55,000 if used for a year. The
recommended dose for multiple myeloma is 25 milligrams, 2=BD times the
10-milligram capsule typically prescribed for patients with the blood
disorder. The price for the 25-milligram version, which the company
announced in a conference call Friday, is about 30% higher than the
10-milligram dose.

Morgan Stanley estimates Celgene stands to make a 97% gross margin --
the profit excluding marketing and corporate costs -- on Revlimid,
Ms. Srivastava said. Unlike some expensive cancer drugs, which are
injectable proteins and expensive to manufacture, Revlimid is a pill
taken orally and relatively inexpensive to produce, she said. A
Celgene spokesman said Morgan Stanley's estimate was inaccurate, but
he declined to provide the company's gross-profit margin on the drug,
citing competitive reasons.

Celgene said it has established free drug programs and made
contributions to independent charities to try to make sure patients
could get treatment regardless of their ability to pay or their
insurance coverage.

Ms. Srivastava said Celgene's strategy of pricing aggressively and
establishing a safety net for the underinsured and uninsured would
maximize profit in the short run. But as cancer drugs are
increasingly used in combination and on bigger patient populations at
higher doses, the pressure on the Medicare and Medicaid budgets will
eventually lead to Congressional scrutiny, she predicted. She said
Revlimid is already being tested in combination with another cancer
drug, Velcade, marketed by Millennium Pharmaceuticals Inc., and when
used in combination, the annual treatment cost would be about $100,000.

Write to Geeta Anand at geeta.anand@wsj.com

-- -- Joana Ramos, MSW Cancer Resources & Advocacy 7303 23rd Ave. NE
Seattle, WA 98115 206-229-2420 http://ramoslink.info/-- Joana Ramos,
MSW Cancer Resources & Advocacy 7303 23rd Ave. NE Seattle, WA 98115
206-229-2420 http://ramoslink.info/__._,_.___