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Sometimes it's hard to figure why certain MS therapies and formats (such as the pen-style injectors for Rebif and Avonex) that are available elsewhere in the world aren't available to us in the U.S. One drug we don't have access to is the HSA-free formulation of Rebif, which is designed to produce fewer of the skin reactions that can be so troublesome for Rebif users, among other benefits.
In trying to gather some data about revenues derived from the MS drugs currently in the marketplace, I ran across this tidbit from the Merck Q3 2011 earnings call:
We are also not pursuing the [FDA] registration process of the HSA‐free formulation of Rebif any longer because, based on feedback from the FDA and external experts, it is our assessment that pursuing the registration would require additional clinical trial data to support approval, thus making the potential financial return less attractive.
In short, the profit margins won't be high enough because of the costs to test it in the US, so they won't even attempt to put the drug on the market. I wonder what the margins are like for them elsewhere in the world, inasmuch as they conducted testing to get approval elsewhere and are faced with price controls in many markets that they don't have in the U.S.! In general, there is an expectation of higher profit margins for drugs in the U.S.
Yes, drug companies need to make a profit to stay in business. But this example shows how the constant pressure on publicly traded companies to post stronger earnings and greater profit margins can get in the way of making beneficial therapies available when a standard of safety is also demanded.
On the other hand, one benefit to getting drugs from publicly traded companies is that they are required to make significant disclosures about their operations. Drug companies speak to their investors very differently from the way they speak to their customer/patients--and getting a look at how they do the former can be pretty revealing about what's really going on with our drugs.
In trying to gather some data about revenues derived from the MS drugs currently in the marketplace, I ran across this tidbit from the Merck Q3 2011 earnings call:
We are also not pursuing the [FDA] registration process of the HSA‐free formulation of Rebif any longer because, based on feedback from the FDA and external experts, it is our assessment that pursuing the registration would require additional clinical trial data to support approval, thus making the potential financial return less attractive.
In short, the profit margins won't be high enough because of the costs to test it in the US, so they won't even attempt to put the drug on the market. I wonder what the margins are like for them elsewhere in the world, inasmuch as they conducted testing to get approval elsewhere and are faced with price controls in many markets that they don't have in the U.S.! In general, there is an expectation of higher profit margins for drugs in the U.S.
Yes, drug companies need to make a profit to stay in business. But this example shows how the constant pressure on publicly traded companies to post stronger earnings and greater profit margins can get in the way of making beneficial therapies available when a standard of safety is also demanded.
On the other hand, one benefit to getting drugs from publicly traded companies is that they are required to make significant disclosures about their operations. Drug companies speak to their investors very differently from the way they speak to their customer/patients--and getting a look at how they do the former can be pretty revealing about what's really going on with our drugs.