What’s With the Lack of Price Competition in Brand Name Cardiovascular Drugs?

A Research Letter in JAMA highlights the lack of price competition in brand name cardiovascular drugs which significantly impacts patient care.

Trends in Within-Class Changes in US Average Wholesale Prices for Brand-Name Medications for Common Conditions From 2015 to 2020” confirms what I’ve noticed and been infuriated by when prescribing DOACs in clinical practice over the last 10 years.

The first direct oral anticoagulant (DOAC), Pradaxa or dabigatran was approved a decade ago. It is an oral direct thrombin inhibitor discovered and developed by Boehringer Ingelheim and was the first new oral anticoagulant approved in the U.S. in more than 50 years. The RE-LY® trial showed that 150 mg twice daily lowered the risk of stroke and systemic embolism by 35 percent beyond the reduction achieved with warfarin which had been the standard of care for patients with non-valvular atrial fibrillation. 

A year later Xarelto or rivaroxaban became the second DOAC approved for afib and was based on the ROCKET AF (Rivaroxaban Once-daily oral direct Factor Xa inhibition Compared with vitamin K antagonism for the prevention of stroke and Embolism Trial in Atrial Fibrillation) trial, in which once-daily rivaroxaban effectively reduced the risk of stroke and systemic embolism in patients with nonvalvular atrial fibrillation, with major bleeding rates comparable to warfarin.

I was so excited about DOACs I gave paid talks on Xarelto to physicians for about a year. Realizing the bias and conflicts of interest inherent in accepting money or gifts from pharmaceutical companies I stopped accepting any payments, food , gifts or other emoluments from them in 2013 at the time I started the Skeptical Cardiologist blog.

The major downside of these drugs for my patients was cost, therefore when a third DOAC , Eliquis or apixaban, was approved I was optimistic that price competition would occur making at least one of these more affordable.

Surely, I thought one of these companies will price their drug significantly lower than the other two and that will immediately ratchet up their market share. Unfortunately, this did not happen. I began viewing these companies as engaged in collusion or price-fixing to the detriment of my patients.

There are now 4 DOACS approved for afib in the US which target the activity of thrombin or factor Xa: apixaban, dabigatran, edoxaban, and rivaroxaban. As a class, these drugs are superior to warfarin clinically because they have less need for laboratory monitoring, minimal drug-drug and food interactions, and more predictable dosing.

This chart shows DOAC usage rising and warfarin usage steadily dropping as DOACS were approved in the US nursing home population

If it wasn’t for cost I would have all my afib patients who need anticoagulation taking apixaban rather than warfarin. If any one of these four DOAC makers had dropped their price significantly I would prescribe their DOAC over apixaban.

For example, edoxaban (Savaysa), the last DOAC to be approved for AF has almost no market share. I’ve never written a prescription for it or come across a patient on it. Why hasn’t Daiichi-Sankyo lowered its price for Savaysa to gain market share?

This graph from the JAMA research letter shows what has been happening with DOAC average whole prices over the last 5 years.

They’ve been drifting up!!! Seemingly in lock-step with each other.

The compound annual growth rates (CAGR) of these drugs were highly correlated with the other DOACS

The JAMA study found

high correlations between AWPs among drugs within 5 classes used to treat chronic conditions that had multiple brand-name medications on the market contemporaneously from 2015 to 2020. Moreover, the median CAGR in costs for each of these medication classes outpaced annual growth rate of the consumer price index for prescription drugs at 2.1% over the same time period. These results suggest there was little price competition among the sponsors of these products. 

Daiichi-Sankyo, I have a suggestion for you. Instead of wasting money on slick websites promoting Savaysa to the public just lower its price! You will become a hero to doctors and patients everywhere.

Collusionophobically Yours,

-ACP

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9 thoughts on “What’s With the Lack of Price Competition in Brand Name Cardiovascular Drugs?”

  1. I have hyperlipidemia and a very high lipoprotein (a). My Cardiologist prescribed injectable Praluentt. When I went to the drug store the cost was almost $6,000 per year even with insurance. I said “No thanks”.

    Reply
  2. Why can the Europeans negotiate such lower prices? I am told by one European that it is because the EU will eviscerate the dug patents and produce the drugs themselves if pharma does not come to terms. Does anyone know if this is true?

    It is true that the national health services in Europe have a degree of monopsony power and act as gate-keepers to their markets. It is also true that this doesn’t exist in the U.S. except for purchases by VA and by insurers, who are individually smaller than a national-market gatekeeper. To me, this difference in market structure seems insufficient to explain the pricing disparities.

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  3. As the number of afib patients rises, along with the aging of the boomer population, these companies see no reason to lower their price. Having a guaranteed patient base, they take the money to the bank.

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  4. Well I have a slightly…..but only slightly…..tongue in cheek take on this. Given how most of the rest of the developed world manages to negotiate lower prices for these drugs, the pharmaceutical companies…..which are big multinationals…..has to make up the shortfall somehow. It happens to be easy to do here in the US.

    When we take our trips back to England and get together with our cronies there (most all from our days in dental and medical school…..so folk with a worthwhile take) I’ll often point out to them that they shouldn’t feel too smug about what they’d pay for Eliquis vs what I have to pony up. I’m actually subsidising their prescription prices and they should hope it continues. Come the time when there’s a serious effort to control what the US market has to bear, everyone else will have to dig deeper into their collective pockets.

    Like I said……only slightly tongue in cheek/half joking ?

    V.

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  5. Is this cost-shifting because of the low amounts that Medicare and Medicaid pay for the drugs. There is no free market in drugs, hence no market competition. The same is true with most other parts of medicine, including physician salaries and hospital beds.

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  6. They don’t have to get together to fix prices they don’t have to. I worked in big pharma for 40 years retiring in 2015. Here’s what they do, as told to a large group of us salespeople back in 1984 by the President of the company, it has not changed. “We won’t drop our prices if they don’t. If prices stay stable we will raise ours a little and the other guys will likely follow suit. If the other guy raises his price we will follow them and maybe go slightly higher not enough to lose business. They watch us, we watch them, it’s an unwritten understanding between us and our competitors. Don’t rock the boat we all get richer. “

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