When studies of AbbVie's chloesterol drug Niaspan raised questions about its effectiveness, analysts suggested it would lose its blockbuster status. But in the face of falling sales, AbbVie's former parent Abbott Laboratories ($ABT) simply raised the price.
According to Bloomberg, recent spinoff AbbVie ($ABBV) boosted the price of cholesterol drug Niaspan 37%, offsetting unit sales losses after two studies showed it had little, if any, effect as a heart disease treatment. Niaspan raises HDL, or good cholesterol, and is often given along with drugs that lower bad cholesterol. AbbVie defended the drug but had no comment on its pricing strategy. Doctors sure did: "I don't know how you can justify it," cardiologist Dr. Robert Giugliano told Bloomberg, pointing out that studies in 2011 and last year found the drug did not lower the risk of heart attacks.
In other parts of the world with government health programs, drug regulators have been cutting prices they pay for some drugs or not approving new treatments when they think the benefits are not worth the prices. Drugmakers have been lambasting drug regulators in Europe over the practice. But there is a rising tide of concern and anger at the sometimes exorbitant cost of drugs in the U.S. Often this is over the price of essential medicines for conditions like cancer or HIV. But sometimes it is because prices remain high even in the face of competition or evidence the drugs are not that effective. Last month, 100 top docs from around the world lashed out at drugmakers over what they described as the astronomical costs of cancer drugs, calling the prices immoral and tagging drugmakers as profiteers.
The doctors were inspired by what happened last year with Sanofi's ($SNY) Zaltrap. The company quickly cut its price on the newly approved cancer drug after three doctors at Memorial Sloan-Kettering Cancer Center announced in the New York Times that the hospital wouldn't be using Zaltrap. They said at $9,600 a month, it was more expensive while no more effective than other drugs they were already using. Citing "market resistance" Sanofi quickly responded by announcing discounts it said would cut the price of Zaltrap in half.
What AbbVie did with Niaspan is really not that unusual, experts point out. It is part of the the problem that comes from a system where consumers and government payers must rely on price-setting by private insurers and benefit managers, Dee Mahan, a drug-pricing expert with consumer group Families USA, told the news service. "As a consumer advocate, you wish the market could be regulated in a better way so consumers don't get hurt,'' Mahan said.
- read the Bloomberg story
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