Pharmaceutical Companies Aim to Secure Profits as Price of Expensive Medicines May Collapse Soon

Pharmaceutical companies often alter drugs under patent protection just enough to keep cost competitors away. New, extremely expensive cancer drugs have also been launched on the market with flimsy evidence of effectiveness. Medicines for very rare diseases are particularly profitable.

Plasmasolu- and lenalidomide, used in the treatment of lymphoid tissue cancers, has been one of the drugs that cost society the most for years. In 2021, about 43 million euros were spent on the drug in outpatient care. The cost per patient was 36,000 euros per year on average.

The 20-year patent protection of pharmaceutical giant Bristol Meyers’ invention expired in April 2022, and so-called parallel products entered the market. The price of a monthly dose immediately dropped from 5,743 euros to 149 euros, or more than 97 percent.

It has saved society tens of millions of euros. At the same time, the drug has been able to be used even more widely.

The decrease in the price of lenalidomide has saved tens of millions of euros in medical reimbursement expenses.

Similar developments are going on in medicines in general. The price of many old but well-functioning blood pressure, cholesterol or psychiatric drugs is very affordable because the patent protection has expired.

For example, a three-month dose of the most common cholesterol medicine, atorvastatin, cost 163 euros before the patent protection expired. Now, the cheapest parallel product with the same dose size costs a measly 4.85 euros.

Since 2003, pharmacies have had to exchange prescription drugs for the cheapest equivalent, and since 2009, a so-called reference price system has been in effect. It means that Kela only reimburses medicines whose price is close to the price of the cheapest product.

Drug exchange saves society large amounts of money.

Pharmaceutical companies however, they are developing a lot of new drugs. New ones must be found to replace the loss of patent protection. Typically, pharmaceutical companies spend 15–20 percent of their turnover on research and development.

Very The most expensive new drugs are often so-called biological drugs. While traditional drug molecules are made chemically by reactions of elements and molecules, biological drugs are usually made by modified and cloned living cells.

These drugs have revolutionized the treatment of autoimmune diseases such as MS, rheumatism and psoriatic arthritis. Many patients recover to almost no symptoms, or at least the symptoms of the disease have eased and the progression has slowed down considerably.

Biological precision medicines have also brought good results in the treatment of cancers. Biological medicines have also found treatment for many rare hereditary diseases for which there was no treatment at all before.

Especially if there was no previously effective treatment for the disease, the pharmaceutical company has a monopoly in practice while the patent is valid. The prices are according to it.

The price of treatment with biological drugs can be tens of thousands of euros per patient per year. In very rare diseases, the prices are in the hundreds of thousands of euros.

Pharmaceutical companies justify their expensive prices with the large development costs of medicines.

Biological medicines started to be used on a large scale only about twenty years ago. That is why the patent protection of many medicines is still valid. In recent years, however, the situation has changed. The price of many very expensive medicines may collapse in the next few years.

Fimean according to a recent listing, there are already biosimilars on the market for 20 biological medicines. Of these, the rheumatism drug infliximab and adalimumab used to treat rheumatoid arthritis were among the drugs that cost society the most until a couple of years ago.

A package of two dosing pens of adalimumab cost 1,160 euros six years ago. In January of this year, the price was 575 euros.

Especially in hospitals, biosimilars have been introduced as soon as they have been available, because the prices have often been significantly cheaper than the original drugs.

For a long time, implementation in outpatient care was more difficult. According to Kela’s research, some doctors have a suspicious attitude towards biosimilars. There have also been no incentives for changing the medicine.

Soon, biological medicines will also be automatically changed to the cheapest one.

“In Finland doctors have had an extraordinary amount of freedom to prescribe the medicine they want. For example, in Sweden, the regions determine quite strictly what doctors can prescribe”, executive director of the Rinnakkaislækeyeydistið Heikki Bothas says.

The situation is changing. A year ago, doctors became legally obliged to prescribe the cheapest biological medicine. From the beginning of April, pharmacies will also automatically change biological medicines to the cheapest biosimilar. Medicines will be covered by the exchange in stages.

Still, biological medicines are not as cheap as old traditional medicines. Developing and manufacturing biosimilars is more expensive than chemical drugs.

Is it so the collapse of medical costs is known? Hardly.

Pharmaceutical companies have many ways to defend their profitability. It is common that just before patent protection expires, a slightly modified or differently dosed version of the drug is introduced, which is strongly marketed to doctors.

When the patent protection of Lantus, the widely used insulin glargine, was about to expire ten years ago, its manufacturer Sanofi launched Toujeo, a slightly stronger product containing the same drug.

According to Fimea’s 2017 medicine statistics, the popularity of Lantus biosimilars had remained low. Sanofi lowered the price of Lantus close to the price of biosimilars, but its prescriptions also clearly decreased.

“Toujeo was heavily marketed and recipes began to be written for it,” says the research manager Leena Saastamoinen From Fime.

Specially In recent years, numerous very expensive new drugs have been developed for the treatment of cancer, which are tailored for a narrow purpose.

“Typically, they can delay the progression of the disease for a few months, but they are still asking for a significantly higher price,” says Saastamoinen.

Based on the report made by Kela, it is typical that these cancer drugs have received marketing authorization based on rather flimsy research evidence.

You can see from the statistics that reimbursement expenses for new medicines have grown explosively. Spending on older cancer drugs, on the other hand, fell in 2022. The reason is that the costs of lenalidomide collapsed after parallel drugs entered the market.

Hila, the drug price board that decides the reimbursement of outpatient drugs, has usually granted only conditional Kela reimbursement to new cancer drugs that have entered the market with uncertain research evidence.

The agreements are secret, but the conditions can be such that, for example, the pharmaceutical company returns part of the compensation if a certain amount of sales in euros is exceeded.

For the year 2023, the companies returned 76 million euros in compensation to Kela. 58 million euros were returned for 2022 and 38 million euros from the previous year.

Own their stories are very expensive drugs for very rare, often hereditary diseases. The prices of these are hundreds of thousands of euros per year. When there are few patients, pharmaceutical companies consider astronomical prices to be justified.

The prices of these rare drugs have not decreased much, even though the patent protection of the drugs has expired. For example, the patent protection of Sanofi’s agalsidase, which is used to treat Fabry disease, has already expired nine years ago.

The drug still costs more than 200,000 euros per patient per year, which is almost as much as 20 years ago. Treatment can be lifelong.

Responsible for treating Fabry patients at Turku University Central Hospital Ilkka Kantolan there are three medicines in use today, but the prices still haven’t decreased.

Fabry drug, as well as the nearby Gaucher’s disease drug, generate nearly one billion euros in annual revenue for Sanofi. The drug has been on the market for 23 years.

Treatments for rare diseases can indeed be very profitable for pharmaceutical companies. The market is too small to attract generics, meaning the original manufacturer can enjoy a monopoly potentially forever.