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Preemie Prevention Drug Costs 53 Times More Than Generic, But Researchers Find It's No Better

A baby rests in the Neonatal Intensive Care Unit at Tufts Medical Center after being born more than 11 weeks premature. (Jesse Costa/WBUR)MoreCloseclosemore
A baby rests in the Neonatal Intensive Care Unit at Tufts Medical Center after being born more than 11 weeks premature. (Jesse Costa/WBUR)

Exorbitant drug costs are one of the American health system’s most vexing problems.

Today’s case-in-point is a hormone called 17-P, which prevents many preterm births. A new analysis by Harvard researchers looks at 535 women at high risk of giving birth prematurely who got a generic form of 17-P, and 3,350 others who got a brand-name version.

The brand-name drug, called Makena, costs 53 times more. A treatment course costs nearly $11,000, versus $206 for the generic version custom-made by special pharmacies.

Even so, the two forms were equally effective in preventing preterm births and were equally safe, the study finds.

Amag Pharmaceuticals of Waltham, which makes Makena, said in a statement to CommonHealth that the company is reviewing the Harvard study, which appears in the current issue of JAMA Internal Medicine. Amag says it has tried to address patient access issues, "including financial assistance for Makena, which is available with no upper-level income caps and also applies to copays and deductibles."

Some researchers raised concerns about the high price of brand-name 17-P when it won federal market approval in 2011, but the Harvard researchers say theirs is the only study so far to measure the actual cost experience and pregnancy outcomes outside a clinical trial. Amag says it is conducting a large trial of the drug's effectiveness in preventing preterm birth.

"These extremely high markups on brand name drugs are one component of why health care in the U.S. is so expensive relative to every other country."

Andrew Beam, Harvard study co-author

Andrew Beam, a co-author of the Harvard study, says 17-P is a good example of a much bigger health care dilemma.

“One of the things that drives me crazy about the U.S. health care debate,” Beam says, “is we seem to argue only about who’s going to pay for what. We don’t step back and have a debate about how much we’re going to pay in the first place. These extremely high markups on brand name drugs are one component of why health care in the U.S. is so expensive relative to every other country on the face of the planet.”

The Harvard group calculates that if 17-P were given to the estimated 133,000 American women who should get it, the national price tag would be more than $1.4 billion a year for Makena, versus only $27.5 million for the custom-made version.

Beam, based in Harvard Medical School’s Department of Biomedical Informatics, says many women at high risk for preterm birth -- because they’ve already had a preemie -- are not getting 17-P, and the high price of Makena may be one reason.

“It’s hard to say exactly what the determining factors are for this under-utilization,” Beam says. “But certainly a high price tag could put this medication out of reach of some people who may benefit from it.”

A 2016 study of 81 Texas Medicaid patients at high risk for giving premature birth found that 40 percent did not get 17-P, as obstetrical guidelines say they should. Some Medicaid programs have refused to pay for Makena, and low-income women in the program may not be able to get access to the custom-made form.

Ten thousand premature births could be prevented every year if all high-risk American women got weekly 17-P injections during pregnancy, according to previous analysis. This would prevent more than a half-billion dollars in avoided medical and other costs.

Every dollar spent treating high-risk women with low-cost generic 17-P saves about $12 in avoided medical care and other costs, according to a 2011 analysis. But using the brand-name version flips that cost-benefit equation on its head -- costing as much as $12 for every dollar spent on the drug, based on what Makena cost then.

When Makena first went on the market six years ago, its price was nearly $1,500 per dose. After complaints of price-gouging, it was reduced to $690 a dose and now costs about $550 a dose. Even so, the Harvard group notes, Makena’s treatment works out to 53 times the cost of the custom-made drug.

Inbar Fried, a co-author on the new study, says the 17-P story is one of the clearest examples of how high-priced drugs don’t necessarily provide more benefit, and are not justified by the manufacturers' cost of research and development.

“This case is a lot more straightforward than a lot of others,” Fried says. “In this case, the original research was government-funded. This really reveals the mechanisms that allow seemingly boundless price hikes.”

Other pricey drugs don’t always have a generic equivalent to allow the kind of comparison the Harvard researchers did with Makena.

Other pricey drugs don’t always have a generic equivalent to allow the kind of comparison the Harvard researchers did with Makena.

(In the case of 17-P, “generic" refers to the dictionary definition — not sold or made under a particular brand name -- rather than the Food and Drug Administration’s regulatory definition of generic drugs, which are regulated more tightly than those made in compounding laboratories.)

The Harvard analysis also reveals how the 1983 Orphan Drug Act is being used by pharmaceutical companies to generate large profits for drugs like Makena. Others have raised the same concern.

The act grants seven-year exclusive marketing rights to companies that win an orphan drug designation. It was designed to spur the development of drugs needed by small patient populations -- fewer than 200,000 -- who would otherwise not be able to attract drug company investment.

But orphan drug designation has become so popular among pharmaceutical companies that the FDA this year had to make special efforts to reduce a backlog of 200 applications. The agency has been getting more than 500 orphan drug applications a year.

In June, the FDA announced it will reform the orphan drug program, but the scope of policy changes is not yet clear. The agency does not generally get involved in drug pricing issues.

Makena’s history shows how companies can capitalize on orphan drug status. Since its orphan drug designation in 2007, manufacturing rights to Makena have been sold and resold multiple times for as much as $200 million.

Currently Makena is by far the leading moneymaker for Amag Pharmaceuticals, which acquired the drug in 2014. It brings in nearly two-thirds of the company’s revenue, according to Amag’s most recent quarterly report.

Moreover, its high price has not harmed Makena’s market share. To the contrary, Amag reports a recent 31 percent jump in sales revenue for Makena, suggesting that doctors are turning away from the custom-made alternative.

Harvard’s Beam says the growing popularity of Makena, despite its high price tag, may reflect doctors’ concern about prescribing the generic form of 17-P because it is made by compounding pharmacies. That entire industry suffered a black eye in 2012 when contaminated steroids made by the New England Compounding Center of Framingham sickened 732 people across the nation and killed 76.

Beam says doctors may worry about their legal liability if they prescribe the compounded form of 17-P and a patient suffers an infection. “Given the 2012 outbreak [involving the NECC], there’s no justification to use the cheaper alternative if you have an FDA-approved drug,” he said.

That’s one reason why the Harvard analysis may be important. It found only one infection among women using the compounded 17-P -- the same as those who got Makena.

One reason the researchers decided to do their analysis, Beam says, is the impending expiration of orphan drug protection for Makena. Without assurance that the generic form is equally safe, doctors may continue to prescribe the costlier drug. And there's no guarantee that Makena's price will come down. "Drug prices tend to be very 'sticky,' " Beam says.

Meanwhile, it appears that Amag may be planning to extend Makena’s exclusivity by bringing out an auto-injection system for the drug. In its August press release, the company said the FDA has agreed to consider its application with a decision expected next February.

Clarification: This post was updated to clarify the definition of "generic" drugs. 

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Richard Knox Twitter Senior Correspondent, CommonHealth
Richard Knox is a senior correspondent for WBUR's CommonHealth.

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