Merck's $360-a-pop HPV vaccine, Gardasil, will now have some competition from GlaxoSmithKline. From the Philadelphia Inquirer:
The race for prestige and profits in cervical-cancer vaccines intensified yesterday when GlaxoSmithKline P.L.C. formally asked U.S. regulators to approve its vaccine, Cervarix.[...]Well, it's good that there's some competition now so that the price of the HPV vaccine will go down. I was beginning to think that the Texas governor Rick Perry's executive order requiring all girls in public schools was partly driven by a desire to hand sacks of cash over to Merck, considering its exorbitant price, but this should change things. Or not:
Both vaccines have been shown to completely block at least two strains of the human papillomavirus, or HPV, blamed for roughly 70 percent of cervical cancers.
Doctors and policymakers who expect competition automatically to bring down vaccine prices are likely to be disappointed, at least initially.So basically two products that accomplish the same goal from two different companies will be pricing their products the same in order to prevent the appearance of inferiority. While they indicate that they may lower the price a year after Cervarix is approved, that puts it more than a year away with state legislatures passing laws for one of them to be used. They could score up a lot of their market before they lower prices in order to compete.
Jean Stéphenne, president of GSK Biologicals, the company's Belgium-based vaccine division, said in an interview last month that GlaxoSmithKline aims to win over physicians and others by proving Cervarix is better, not by selling it for less.
"If you start a price war, you give the impression that your product is of lower quality," Stéphenne said during a trip to Philadelphia.
"For sure, at a certain point, we will compete to get a bigger market share" based on price, Stéphenne said. But he indicated the initial strategy would be matching Merck on price and beating it on effectiveness.
The strategy, while good for vaccine-makers and potentially the Philadelphia pharmaceutical sector, could prolong financial headaches across the nation's health-care system, where physicians and patients already face a cash crunch over Gardasil.
Moreover this shows how a couple of companies know that all that jazz about demand curves is bogus when you're talking about saving people's lives. State legislators, while caught up in the debate over abstinance and an HPV vaccine, aren't going to pass up this vaccine because of the price of either one. All it becomes is another burden on families putting their daughters through school or a burden on already cash-strapped state health agencies that might provide some funding for the vaccines.
No matter who picks up the burden of paying for Merck CEO Richard Clark's $8 million salary or GSK CEO Jean Pierre Garnier's $7 million salary, this whole story goes to show why the government needs to be able to negotiate drug prices with pharmaceutical companies. You know, just like any other major buyer does with a supplier.
Oh, and the Inquirer article had this little gem:
"We really don't know the effect of competition on prices, whether it gives us a better negotiating position. We think it does, but we don't have hard evidence," [the CDC's Lance] Rodewald said.Yup.
(h/t Feministing)
1 comment:
Maybe if the US had socialized health care like other CIVILIZED countries in the world (Canada, Holland), we wouldn't even be having a discussion about price wars for drugs/vaccines. Medicine and education should be free. If the government spent less of my tax dollars blowing up the Middle East and more money on the American people, maybe I wouldn't be so pissed off all the time.
Post a Comment