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`The Washington
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`Exorbitant Drug Costs May Price Out Patients
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`[.:lPr'”**“'SPa9e
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`By by Gina Shaw
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`Uploaded on April 27, 2011
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`In January, an injectable form of the drug progesterone, a synthetic hormone used to prevent preterm labor in some
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`130,000 pregnant women every year, cost as little as $10 from your local pharmacy.
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`Just three months later, the same drug skyrocketed to
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`’,.,
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`..
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`$1,500 per dose — although after a public outcry, the
`price tag dropped to $690 per dose. That's still a 69-
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`'
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`fold price increase. Why? Did the drug magically get
`better? Did manufacturers discover a brand new
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`“$1523
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`indication? Nope.
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`is a sterile injectable drug, granting specific approval to _.:l'|I-n- _
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`The Food and Drug Administration granted exclusive
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`approval to KV Pharmaceutical to produce the drug
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`under the brand name Makena, designating it an
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`"orphan drug" with seven years of monopoly
`protection. The agency decided that because the drug
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`a manufacturer under FDA guidelines would offer a
`greater assurance of safety.
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`‘Photo; Bigstock
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`_
`"
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`Drug companies often claim that the high prices ofmedicattons
`are necessary to compensate for the enormous cost of bnnging a
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`Originally, KV planned to charge $1,500 per dose for
`the drug — which, if injected every week for the
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`drug to market, but that doesn't explain why otder drugs, whose
`prices shoutcl have already been calcutated to cover those costs,
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`recommended 20 weeks, would have cost a whopping
`$30,000 per at—risl< pregnancy. But after an uproar, the
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`St. Louis-based company brought the price down to
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`soar in price when a new drug enters the market.
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`what it apparently thinks is a much more reasonable $690. It also noted that it will expand its financial aid program so that
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`85 percent of women who need the drug will pay no more than $15 per dose, according to a company statement.
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`But the $690 price tag is still prettyjaw dropping, especially given that KV didn't pay a dime to develop Makena — the
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`initial clinical trials were taxpayer—funded through the National Institute of Child Health and Human Development (NICHD)
`at the National Institutes of Health.
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`"This stuff is really cheap to make — this would be as if a brand new company somehow got a patent on Tylenol or aspirin
`and decided to sell it at $100 a pill," Dr. Christopher Harman, director of the Center for Advanced Fetal Care and chief of
`obstetrics and gynecology at the University of Maryland Medical Center in Baltimore, told Internal Medicine News. He
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`found the price hike a particular outrage because the women at highest risk of premature birth — young African American
`women — may be the least able to afford it.
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`http://www.washdiplomatcom/index.php'?view=artic1e&catid=1473 %3Amay-201 1&id=7...
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`1/26/2016
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`MYLAN PHARMS. INC. EXHIBIT 1074 PAGE 1
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`MYLAN PHARMS. INC. EXHIBIT 1074 PAGE 1
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`Exorbitant Drug Costs May Price Out Patients
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`Page 2' of 3
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`The FDA has said that companies who were making the progesterone injections previously can still market their drugs as a
`generic, contradicting a letter sent by KV to compounding pharmacies telling them that the FDA would enforce their
`exclusive right to make the drug.
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`Progesterone injections are far from the first drug to take a sudden and startling trajectory upward in price. Last fall,
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`Novartis introduced a drug called fingolimod (Gilenya), the first oral medication for multiple sclerosis. The sticker price on
`this medication was startling enough: $48,000 a year, far more than some people's annual salaries.
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`But this was the first drug of its kind, with no direct competitors. Maybe the premium wasn't all that surprising — until other
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`multiple sclerosis drugs, many long on the market, suddenlyjoined the band wagon and started going up in price as well.
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`Copaxone, manufactured by Teva, now costs more than $42,000 per year, nearly 40 percent more than its price at the
`beginning of 2010. Another company, Biogen ldec, has also raised prices for two other MS drugs, Tysabri and Avonex,
`though not as much as the Copaxone hike.
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`Drug companies often claim that the high prices of medications are necessary to compensate for the enormous cost of
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`bringing a drug to market (estimated at around $1 billion over about nine years). But why should older drugs, whose prices
`should have already been calculated to cover those costs, go up in price when a new drug enters the market?
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`Dr. Edward Fox, clinical associate professor of neurology at the University of Texas Medical Branch and director ofthe MS
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`Clinic of Central Texas, thinks it's all about painting a competitive picture. "With the onset of new medications that come at
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`a premium, companies have raised the price of older medications in order not to appear inferior to the new drug. They look
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`at the price as being meaningful when it comes to expectations. If a certain drug is priced lowest, it must be less worthy
`somehow."
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`Given the high cost of medications for multiple sclerosis and drugs for conditions like cancer, it's almost impossible to get
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`them without either having excellent insurance, or being in such dire financial straits that you qualify for a drug company's
`"compassionate access" program.
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`But as prices leap ever higher, even "good" insurance and assistance programs are leaving many people behind.
`Insurance plans are raising co—pays to compensate for the new sky—high drug costs. "On a weekly basis, I'm dealing with
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`patients who have what I would call a medication crisis," Fox said. "Many of my patients have co—pays of between $300
`and $800 a month. There aren't too many families who can easily absorb that cost."
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`And with prices increasing at exponential rates, the income thresholds set by drug manufacturers to enter their
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`compassionate access programs will also need to be higher and higher to assist the growing number of people who are
`greatly burdened by the cost of their medications.
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`What's the answer? Many physicians who are watching their patients struggle to afford their medications — and spending
`too much of their time appealing insurance company denials of ever-more expensive drug coverage — say that the
`government needs to step in.
`''I've always felt that when a medication is approved and a price is set, it should be set
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`across the board," said Fox. ''I‘m a free-market supporter, but I do not believe in differential pricing of medications for
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`different health care plans. tfit's got a price, it should be the same for Medicare, Blue Cross, Tricare, whatever. lfyou do
`that, and it's truly transparent pricing, companies are more likely to compete with one another in terms of reasonable
`prrcrng."
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`In return, Fox says, drug companies should be given a longer effective patent life for their medications (at least, the ones
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`they actually developed themselves). Currently, the patent life for a new drug is 20 years — but that begins on the date of
`the patent application. Drugs are usually patented before the FDA approval process, which can take many years. As a
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`result, the effective life of the patent is often less than 10 years. "The patent clock shouldn't start ticking until approval," Fox
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`http://Wwwwashdiplomat.com/index.php‘?view=artic1e&catid=1473%3Amay—201 1&id=7...
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`Exorbitant Drug Costs May Price Out Patients
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`Page 3 of 3
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`suggested. "lf drug manufacturers had a longer and more predictable patent life, they'd better be able to predict profitability
`for a certain drug, and might be willing to accept price controls."
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`But something has to be done, and soon, Fox said. "We've reached a boiling point. My patients are afraid that they won't
`be able to get the medications that have made a huge difference in their lives."
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`About the Author
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`Gina Shaw is the medical writer for The Washington Diplomat.
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`Last Edited on June 24,2014
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`http://www.washdip1om at.com/index.php?vievFarticIe&catid=1473 °/u3Amay-20 1 1&id=7...
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`1/26/2016
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