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High cost of living well

Sought-after biotechnology drugs can cost $10,000 or more a year

Tuesday, May 13, 2003 7:09AM EDT
By David Ranii, Staff Writer

So you think your allergy drug prescription is pricey.

Consider then Biogen's multiple sclerosis drug Avonex, made at the company's manufacturing complex in Research Triangle Park, which costs an average of $14,000 for a year's supply.
If you think that's too high, look at the alternatives. Two competing drugs cost even more; a third costs just $500 less per year.

When Durham-based Trimeris announced in March that a year's supply of its new AIDS drug Fuzeon would cost $19,990, the price seemed outrageous to many. But ultra-expensive drugs are not uncommon. Dozens of drugs now on the market cost $10,000 or more per year.

Fuzeon isn't even close to Cerezyme, among the highest at an average of $170,000 annually. It's used to treat Gaucher disease, an inherited enzyme deficiency that in its most serious form leads to neurological problems and can be fatal.

Most of these ultra-expensive drugs are biotechnology drugs, or biologics. And most are used to treat rare diseases. But biotech drugs for more widespread ailments such as heart disease and diabetes are in the works, according to the Biotechnology Industry Organization. In fact, there already are drugs that cost more than $10,000 a year to treat rheumatoid arthritis.

That could be ominous, given that the already soaring costs of prescription drugs have been blamed for the rise in health care costs overall.

"As we get biologics for more common diseases, the health care system is going to implode until insurers and Congress understand they have to do something about drug prices," predicted Abbey Meyers, president of the National Organization for Rare Disorders.

How can a one-year supply of a drug cost more than a Honda Civic? Or a dozen Civics?

Even critics of the pharmaceutical industry concede that building a plant to produce biologics, along with the day-to-day cost of making them, is dramatically higher than for traditional prescription drugs. The plant outside Boston that produces Cerezyme for Genzyme Corp., for example, cost $150 million to build, said company spokesman Bo Piela.

"Biologics involve cutting-edge research, development and manufacturing," said spokeswoman Amy Brockelman of Biogen, which spent $173 million on the RTP facility where the psoriasis drug Amevive is produced.

In addition, producing a drug for a rare ailment -- fewer than 10,000 people in the world have Gaucher disease -- means companies are going after small markets. High prices help recoup their costs, which typically involve spending hundreds of millions on research and development.

Unlike the typical pill made from chemicals, biologics are made from organisms in various ways. These include engineering bacteria or cloning animal cells to produce proteins, or deriving medicines from blood plasma. Nor can biologics be picked up at the local drugstore. Instead, they must be administered through IVs, often at a hospital or the doctor's office, or by shots.

Despite their high prices, these drugs are in demand because they are typically more potent and safer than other treatments. Many of them save lives, dramatically improve the quality of those lives and, in the end, lower the cost of patient care.

With the average cost of hospital admission at $10,000, said Columbia University economist Frank Lichtenberg, avoiding a hospital stay with these drugs can actually save big money.

With the price of these drugs higher than most families can afford, "insurance is the key," Meyers said. "Nobody can pay out of pocket for these things."

Perhaps the best measurement of the effectiveness of these drugs is that coverage from health insurers "is generally not a problem," said Henry Blissenbach, CEO of Chronimed. Chronimed, a drug distribution company based in Minnesota, specializes in biologics.

Blue Cross and Blue Shield of North Carolina, for example, covers all but a few of the ultra-expensive drugs, said Bob Harris, chief medical officer. "The cost is something we pay attention to, but we do not make a determination of whether we will cover something on the basis of cost."

Holly W. Woodard, 40, a multiple sclerosis patient who lives in Raleigh, is thankful her husband's health insurance covers the cost of her Copaxone -- a drug from Israel's Teva Pharmaceuticals that costs more than $13,000 per year. Her monthly co-payment is $20.

Woodard, who has had to give up jogging and drives her van with hand controls rather than foot pedals because of problems caused by multiple, believes she might be confined to a wheelchair today if it wasn't for the drug.

"Copaxone makes me feel I have a little control over" MS, she said. "I don't have total control, but at least it doesn't have control over me."

Many drug companies do offer patient assistance programs for uninsured patients who can't afford their medications. "If you qualify, you can get free drugs," Meyer said.

Even patients with health insurance may face a financial burden.

Tom Moran, president of the Immune Deficiency Foundation in Towson, Md., said the cost of treatments for boy-in-the-bubble disease and other immune deficiency diseases -- which include Gamimune N, which is made at the Bayer plant in Clayton -- can run more than $30,000 a year. It's not unusual for patients with health insurance to have 20 percent co-payments that cost them $6,500 annually, he said.

Just how costly ultra-expensive drugs really are is a matter of interpretation, contends Alan Hillman, a professor of medicine and health care systems at the University of Pennsylvania.

"If $20,000 meant the difference between dying at age 30 or living a fruitful life to age 70, I wouldn't call that expensive. I would call that a good investment," Hillman said.

© Copyright 2003, The News & Observer Publishing Company