For the past four years, Novartis (NVS) has refuted charges of unfairly pricing a key cancer treatment in Colombia. Internal company data show, though, that the drug maker had also charged much more in the Latin American nation for three other widely used medicines than in dozens of other countries.
In 2013, the most recent year for which data was obtained, Novartis charged at least 58 percent to 626 percent more for 30 tablets of the Exforge high blood pressure medication than in 50 other countries, including high-income nations such as the United Kingdom and Germany. For instance, the price was $92.87 in Colombia, compared with $43.84 in Germany, $36.04 in the UK and $17.27 in Australia.
Similarly, Novartis charged anywhere from 58 percent to 1,317 percent more for 30 tablets of its Diovan blood pressure treatment than in 49 other countries and from 50 percent to 1,100 percent more for 30 tablets of its Tegretol seizure drug than in 36 other countries, according to the data from a 2014 report. We should note the data is based on list prices and was adjusted for foreign currency differences.
The pricing data emerges as Novartis battles the Colombian government, which wants to unilaterally lower the price of the Gleevec leukemia treatment by up to 45 percent on the grounds that the drug is out of reach for some citizens. Patient advocacy groups note the annual cost of the medication is roughly $15,000, compared with per capita gross national income of about $8,000.
“This data supports the idea that Gleevec has not been the only drug for which Novartis has, historically, overcharged,” said Brook Baker, a professor at Northeastern University School of Law and a senior policy analyst for Health GAP, a group that advocates for wider access to medicines. “And it shows the unilateral power of companies to take advantage of countries.”
For its part, Novartis has argued that unilaterally lowering the Gleevec price threatens patent rights and that public health is not at risk, since generics are available, although Colombian officials say the drug maker has threatened companies with litigation. To press its case, the drug maker enlisted the help of members of Congress and the Obama administration to pressure Colombian officials from proceeding to lower the price of the drug.
This heated episode has quickly become a closely watched example of the clash over intellectual property rights and access to medicines between the pharmaceutical industry and cash-strapped governments. And public health experts say that the Novartis track record on pricing in Colombia appears to be symptomatic of a larger problem.
“There are a number of countries without strong regulatory systems that may be taken advantage of by companies,” said Suzanne Hill, the director of Essential Medicines and Health Products at the World Health Organization. “We’ve done studies over the years and seen prices vary across countries. You can easily get price variations of up to 200 percent from one country to another.”
She pointed to a 2012 study in Health Policy and Planning, for example, that found large price variations had existed at the time for first- and second-line HIV combination treatments between Latin American countries. The study blamed the discrepancies, in part, on a lack of transparency to ascertain pricing in different countries.
There are, however, several reasons why the same medicine may vary in price from country to country, such as distribution fees and taxes, among others. Still other drug makers may also have charged more for some of their medicines in Colombia than elsewhere. And some countries might have reached better deals with the company or have some form of price controls that limited the cost.
Hill, in fact, noted that Colombia began instituting price controls on a limited number of medicines in 2013, but it wasn’t until the end of the year that government officials began using international reference pricing for about 330 drugs. “I suspect that this is not just Novartis” charging higher prices, she explained, “but (that) we would see the same of other manufacturers’ products in Colombia.”
As for Novartis, a spokesman did not address the different pricing directly, but he noted that “list prices are rarely the amount paid for the medicine at the point of treatment. Discounts and other pricing considerations generally result in an effective price that is significantly lower than the list price.
“In addition,” he added, “while at first glance it makes sense, price comparisons between countries can be misleading as distribution systems, wholesaler and pharmacy fees, taxes and other costs vary considerably between countries just like their health systems.”
He went on to say that Novartis attempts to price its drugs based on clinical outcomes and value to health systems, which can be measured by comparing the cost of a medicine to other costs for other treatments used to combat an illness. He closed by maintaining that the price for Gleevec in Colombia is “one of the lowest absolute prices in the region,” but did not provide comparative data.