Old Cancer Drug Gets 1,227% Price Hike in Frugal U.K.

  • University of Liverpool study singles out 14 generic drugs
  • Price gains may have cost England 380 million pounds in 2015

The chemotherapy known as busulfan is more than six decades old, and part of doctors’ standard arsenal against leukemia. It’s not scarce, and by all accounts, it should be dirt cheap. Instead, its price has soared like that of a prized antique.

Busulfan cost 1,227 percent more last year than in 2011 in the U.K. And it isn’t the only medicine whose price has unexpectedly surged in one of the world’s most tightly-controlled markets for health spending. Melphalan, a chemotherapy in use for ovarian cancer since the 1950s, had a 315 percent cost increase in the same period, according to researchers at the University of Liverpool, who reviewed 89 products.

Fourteen generic cancer treatments have seen their prices more than double between 2011 and 2016, even as the U.K.’s National Health Service cracked down on expensive new targeted tumor drugs. In the U.S., hedge fund manager Martin Shkreli set off a firestorm over the cost of medicines in 2015 by raising prices for an old antibiotic. Deeper scrutiny revealed other such cases, up-ending common perception that prices of critical medicines will only fall after patents expire and drugmakers have recouped costs.

“These are drugs that have been around when I was a medical student, and I’m a very old doctor,” Karol Sikora, dean of medicine at the University of Buckingham and a consulting oncologist for NHS, said of the University of Liverpool study. Sikora wasn’t involved in the research. “We all think of these drugs as dirt cheap, so no one’s paying attention.”

Widespread Use

Aspen Pharmacare Holdings Ltd., which sells both busulfan and melphalan, said the increases were from a “low and unsustainable base price base” that had remained the same for decades. Busulfan’s sales in the U.K. after the price increases are still only about 15,000 pounds ($18,800) per month, the company said.

The Durban-based company, Africa’s biggest maker of generic drugs, was fined 5 million euros ($5.3 million) in October for raising prices on cancer drugs in Italy by as much as 1,500 percent. It is appealing the decision.

The majority of cancer medicines that had price increases over the five years had lost patent protection, the U.K. researchers found. Most of the cancer drugs with big price hikes are still in broad use, given for long periods of time to a large group of people, according to Sikora. Busulfan, for example, is often prescribed for elderly patients with chronic myeloid leukemia, he said.

Rising costs for generic drugs have fueled debate and led to record fines in the U.K., where the health system is trying to save 22 billion pounds by 2020. Pfizer Inc. and Flynn Pharma Ltd. were fined more than 90 million pounds in December for raising the price of unbranded versions of an epilepsy drug by as much as 2,600 percent. The government has counted on market competition to keep prices for copycat or unbranded medicines down, though even some generic medicines are sold by just one drugmaker.

Taxpayers’ Costs

Price increases for generics prescribed by primary-care physicians -- which don’t even take into account most cancer medicines -- probably cost England alone more than 380 million pounds in 2015, compared to 2011 price levels, said Andrew Hill, one of the Liverpool researchers.

“This is an area where the National Health Service in the U.K. appears to be wasting millions of pounds by accepting drug prices that are too high,” Hill said. “It’s the tip of the iceberg.”

The cancer drug prices found in the study may be the result of a lack of competition among drugmakers, Hill said. The researchers, whose work was funded in part by the World Health Organization and the Open Society Foundation, checked prices in the British National Formulary and two drug-price databases.

Government Action

The U.K. Parliament is expected to pass a new law in the spring that would make it easier for the government to take action on “excessive price rises” in unbranded medicines, the Department of Health said in an e-mailed statement.

The Liverpool study found that the price of a two-milligram tablet of busulfan had climbed from 21 pence in 2011 to 2.61 pounds last year. By comparison, in the U.S., busulfan tablets cost $23.42 apiece, up from $5.36 in 2012, according to list price data from First Databank Inc. compiled by Bloomberg Intelligence. A 50-milligram vial of melphalan cost 137 pounds in the U.K. last year, compared with 33 pounds in 2011.

The price of a 10-milligram tablet of tamoxifen, a hormone therapy in use for breast cancer since the early 1970s, soared 1,079 percent in the same time period, from 10 pence to 1.21 pounds. The standard 20-milligram dose didn’t see a price increase, Hill said.

Spokesmen for Wockhardt Ltd., the Mumbai-based maker of tamoxifen, didn’t respond to e-mails and phone messages seeking comment on Friday, ahead of the study’s release.

The findings are likely to fuel concern about potential short-comings in government policy and oversight, according to Karl Claxton, a health economics specialist and professor at the University of York in England, who wasn’t involved in the study.

“There are some important questions to ask about why that is and whether we’ve really got a competitive generics market,’’ he said.

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