Pharma price hikes aren't alone in driving up drug costs. Pharma packaging is, too. That's the conclusion of a new study, which found that large cancer-drug vials are fueling $3 billion in waste every year.
Many drugmakers package their expensive cancer therapies in vials that contain too much drug for most patients. Nurses draw what they need to dose each patient according to body weight and toss the rest because of safety rules.
"Drug companies are quietly making billions forcing little old ladies to buy enough medicine to treat football players, and regulators have completely missed it," said study co-author Dr. Peter Bach, director of Memorial Sloan Kettering's Center for Health Policy and Outcomes (as quoted by the New York Times). "If we're ever going to start saving money in health care, this is an obvious place to cut."
For a piece published in the BMJ, the researchers looked at the top 20 cancer drugs and found that about $1.8 billion worth--already paid for by insurers and patients--ends up discarded. Another $1 billion goes to markups charged by doctors and hospitals.
Drugmakers sell the same drugs in smaller vials overseas, the researchers point out. They quoted a 1-mg and 3.5-mg assortment of vials for Takeda's Velcade (bortozomib) in the U.K., compared with only the 3.5-mg version in the U.S. Up to 30% of the drug's U.S. sales are related to waste, the researchers said, and they calculated that Takeda would bring in $130 million this year on Velcade that ends up in medical waste bags.
By contrast, Teva Pharmaceutical's ($TEVA) leukemia drug Treanda (bendamustine) is sold in a variety of vial sizes--25, 45, 100 and 180 mg--that can be combined to reach the target dose by weight. The researchers figure only 1% of that drug is wasted.
The researchers also zeroed in on a packaging change that they said could boost one drug's revenue by $1.2 billion over 5 years. That drug is Merck & Co.'s ($MRK) Keytruda, which was available in 50-mg vials when it was first launched. Those vials contained powder for reconstitution. Merck discontinued that form and introduced 100-mg liquid vials instead, and in the process created more waste, the BMJ article contends.
How to fix the problem? Bach and his co-authors have a few ideas. Regulators could require drugmakers to produce vials in several size options to limit waste. That sort of packaging, applied to the drugs the study considered, would lower revenue from unused portions to $400 million from $1.8 billion. Or, drugmakers could choose their vial sizes, on the stipulation that they refund the cost of unused drugs.
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