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Monday, July 11, 2005

Why US Drugs are so Expensive

The Chicago Tribune reports Brazil just transferred their drug costs to U.S. Citizens. And no, this has nothing to do with nanotechnology. In an action that has been watched by patent geeks for some time Brazil just shook down Abbott Laboratories for lower prices on Kaletra (Generic lopinavir) a protease inhibitor useful in fighting HIV, the virus that causes aids. Kaletra works for those with HIV that is resistant to other protease inhibitors and doesn’t require a complicated cocktail of anti-HIV drugs.

In the U.S. Kaletra costs about $7,000 per patient prior to this agreement Brazilians paid $2,562 a year for the same treatment. Brazil’s government has just strong armed into a lower price (Abbott isn’t saying what the new price is).

Abbott Laboratories’ Heather Mason, Vice President, Specialty Operations Pharmaceutical Products for Abbott Laboratories recognizes that prices have to cover " “It’s allowing us to make investments in future innovations — novel therapies, drugs with less side effects — and to bring those to market so patients have access to more and better medicine.” This quote is out of context and referred to an increase in the price of Norvir another protease inhibitor, but I am pretty sure she would say the same thing about the pricing of Kaletra.

Perhaps Ms. Mason should have added, “We had to raise prices to subsidize citizens of Brazil who refuse to pay their fare share for the development of life saving therapies.

Hing Sham, Ph.D. is one of the coinventors of Kaletra and a pretty smart guy. He could probably work on any project he wants to. I would guess that he works for Abbott because he has interesting projects and makes a pretty decent living. Abbott can pay Dr. Hing because they sell the drugs he invents.

Brazil doesn’t care if he quits and goes to work at the car wash. I care because I want him to invent the next life saving drug. Andrew Sullivan
cares because he needs the next lifesaving drug:

It has been imprinted on an entire generation that Big Pharma is the source of all evil. But the only reason I'm writing this blog at all is because of Big Pharma. They're not angels in America. They're capitalists. But the profit motive has been the most progressive force in pioneering specific medical breakthroughs that we have yet found.

Brazil is as Mr. Sullivan says “pursuing policies that will consign many people with HIV to earlier deaths.”

Brazil is not a third world backwater, it has GDP of about $1.5 trillion (2004 estimate) and a per capital GDP of $8,100. Abbott already is subsidizing the cost of Kaletra in Africa. The Republic of Congo has a GDP of $2.3 billion and a per capita GDP of $800. The Congo also has an AIDS rate of about 5% (more than five times Brazil’s 0.7%). Brazil should be able to buy AIDS drugs without forcing the cost onto US citizens and without reducing Abbott’s ability to help those truly in need.


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