Roche Hiked Cancer Drug Price Before Empty Promise To Keep Flat

Swiss drugmaker Roche made an empty promise this week when they pledged on July 11 not to raise drug prices for the rest of the year, reports Naomi Kresge of Bloomberg, right after the company had already completed "the second of its customary two annual increases" on July 1.  

Roche gave the U.S. government its no-price-rises promise on July 11, the company said in a statement Friday. The health system also needs to focus on “long-term, system-wide solutions that lower costs,” Roche said. “We’re committed to being part of the solution.”

However, Roche had raised the prices of nine medicines in early July by an average of about 3 percent, a spokeswoman told Bloomberg News later Friday by email. This included increases for Roche’s three best-selling drugs, the oncology blockbusters Herceptin, Rituxan and Avastin. -Bloomberg

Data on drug prices compiled by Bloomberg Intelligence and First Databank reveal that Roche's price increase followed a similar increase in January, and was part of a pattern of hikes conducted over several years.

Trump's crackdown on drug prices

On July 9, President Trump tweeted that Pfizer and others "should be ashamed that they have raised drug prices for no reason," warning "We will respond!" 

Following up on Trump's tweet, his administration moved quickly this week to implement several significant components of the White House's plan to bring down drug prices. In response - and after Trump's tweet sent stocks tumbling, drugmakers around the world, from Merck to Pfizer and Novartis, rushed to announce their altruism - committing to temporary price-hike halts in some cases such as Pfizer's - while slashing the cost of various medications in others. 

The Health and Human Services Department on Wednesday night submitted a proposal to the White House that would curb kickback exemptions that allow drugmakers to offer insurers and pharmacy-benefit managers rebates widely blamed for keeping drug prices high.


The proposed regulation on rebates sent to the White House Office of Management and Budget would make changes to federal safe-harbor protections that have allowed the discounts. The federal anti-kickback statute allows “safe harbor” to protect normal business practices, an exemption that currently includes PBMs. -Bloomberg

And again, drugmakers' responses were little more than empty promises. 

Merck, for example, announced that they are lowering the price of their $54,600 Hepatitis C treatment Zepatier by 60% - a meaningless announcement considering "that drug has struggled to take market share from expensive rival medications," according to Bloomberg

For context, Gilead had to lower the cost of their 12-week Harvoni HepC treatment from $84,000 to as little as $12,000 in various countries such as Chile, while The Guardian reported in April that nonprofit organization DNDi is working with Egyptian drugmaker Pharco Pharmaceuticals on a $300 a day treatment that showed a 97% cure rate in Phase II/III trials

Also, most insurance companies won't cover people's $84,000 liver fix if they've got HepC but an otherwise healthy liver. Patients must come in with a diagnosis of chronic hepatitis C with compensated liver disease, according to Pharmacychecker Blog. 

Given that, Merck's decision to slash their HepC treatment by over half is no surprise. 

In many cases, however, the actual impact may be less than consumers might imagine, said Sam Fazeli, an analyst with Bloomberg Intelligence.

A lot of it is window dressing,” Fazeli said. “It just sounds good.” -Bloomberg

Umer Raffat, a New York-based analyst with Evercore ISI told investors in a note that because Merck's new policy looks at average prices across its drug portfolio, it likely leaves room for increases within other treatment lines. While Merck announced that it would cut prices on six of its drugs by 10%, said drugs account for less than 0.1% of Merck's sales.

Health and Human Services (HHS) secretary Eric Hargan highlighted some of the Trump administration's moves on Thursday while delivering some tough talk to drug-company executives who comprise the board of Pharmaceutical Research and Manufacturers of America. 

“The blueprint is very real, it’s definitely the president’s blueprint and the sweeping reforms contemplated in it are on the way,” Hargan told the lobby group in a closed-door meeting. “When this president talks about fundamental change to drug markets, he follows through.”