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DBL%20Hendrix%20small.png College chemistry, 1983

Derek Lowe The 2002 Model

Dbl%20new%20portrait%20B%26W.png After 10 years of blogging. . .

Derek Lowe, an Arkansan by birth, got his BA from Hendrix College and his PhD in organic chemistry from Duke before spending time in Germany on a Humboldt Fellowship on his post-doc. He's worked for several major pharmaceutical companies since 1989 on drug discovery projects against schizophrenia, Alzheimer's, diabetes, osteoporosis and other diseases. To contact Derek email him directly: Twitter: Dereklowe

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August 8, 2011

Gilenya's Price

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Posted by Derek

A couple of weeks ago, we had this discussion about the cost-effectiveness of drugs for multiple sclerosis. It was pointed out that Novartis's new Gilenya (fingolimod) is priced even higher than the drugs in the study that found that MS drugs are among the priciest in the world for their medical benefit.

Now the United Kingdom's NICE has said that Gilenya has not (so far) shown enough efficacy to justify its price. There's going to be a lot of emotionally engaged comment on both sides of this issue, but people should have been able to see this coming. And by "people", yes, I also mean Novartis.

Comments (10) + TrackBacks (0) | Category: General Scientific News | The Central Nervous System


1. Anonalso on August 8, 2011 9:45 AM writes...

Novartis has to make up for the loss of Diovan somehow.

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2. PharmaHeretic on August 8, 2011 9:56 AM writes...

The most bizarre part of that pricing is that fingolimod is a small and fairly simple molecule, rather than a biological.

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3. Mr. Perceptive on August 8, 2011 10:24 AM writes...

This is no doubt, a planned pricing strategy by Novartis. Sunk costs mean nothing. As long as they can sell the stuff at a price above the marginal cost of production and sales, they make money.

Might as well start high and ratchet down as required.

When you think about it, pricing to large bulk purchasing customers will probably evolve into implicit reverse auctions. I.e., Manufacturers of products for the same indication will have margins crammed down in an iterative bidding process driven by the customers.

Or at least that's what the customers should do.

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4. anchor on August 8, 2011 10:32 AM writes...

#2 - right on the money, I say! Novartis, greed for the lack of better word is not good. The UK decision will put some sense on Novartis.

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5. Quintus on August 8, 2011 11:30 AM writes...

Novartis need the money to finance the #%%*¥ stupid campus

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6. Bbooooooya on August 8, 2011 11:07 PM writes...

It may well be true that the first gilenyia pill cost x hundred million, and each subsequent only costs a few dimes. If big pharma based it's margins o the dimes, no drugs would ever get discovered again. Maybe we can live without a new ED drug, or a drug to replace the exercise we're too lazy to take, but big pharma also makes some drugs that help people.

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7. simpl on August 9, 2011 10:35 AM writes...

Here is an article, presumably by an MS specialist, who is confused about risks, benefits and cost:
The same issue also compares Gilenia with interferon, which was NICEs concern.
It is possible that the QALY methodology was something that made the higher price look appropriate.
Also relevant might be the short patent life of the molecule(2014?). I assume that the MS indication is also protected, and that other PharmaCos are looking for molecules with S1P activity.

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8. Observer on August 10, 2011 11:04 AM writes...

Among MS therapies, keep in mind that interferons Avonex, Betaferon, and Rebif as well as Copaxone never got NICE approval either. I believe only Tysabri did so.

As I understand it, the ABCRs are available in the UK to those with private insurance or can pay out of pocket.

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9. Daniel on August 11, 2011 10:56 AM writes...

Does anyone think that this setback will have any substantial impact on the near future sales figures or bottom line earnings of Novartis?

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10. Christine on December 4, 2011 2:27 PM writes...

I don't know what happened since this story was written, but I went to one of many regular MS dinner discussions offered to patients in November 2011, and the Gilenya sales rep told me that if I switch to Gilenya and have standard health insurance, it will be No_Copay. I pay $50 every three months to inject myself with Rebif...

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