Drugmakers are getting bolder in their experimentation with lower-cost drugs in poor countries, and most major U.S. drugmakers are collaborating with them on the strategy.
Most of the big multinational companies now have import-quality versions of seven of the top 15 most expensive drugs sold in the U.S.
Now, one of the largest drugs companies — Pfizer Inc. — has announced that starting in July, it will start marketing the most widely prescribed medicine in the developing world, a generic version of a Pfizer drug called Lyrica.
The company would not say how much it is charging but said it will sell the cheapest generics in countries that have medical pricing programs requiring that medicines be made at or near their original costs to get them approved. In those countries, prices for Lyrica will be set by an independent agency.
“We are committed to price transparency and ensuring that our medicines are affordable and accessible,” said Andrew Lo, Pfizer’s chief scientific officer.
The company said prices would be based on “clinical effectiveness and other factors that represent the true cost of the medication.” It said these prices would be comparable to the prices paid by government programs, but it was not clear whether prices will be kept within a certain range or whether they will vary based on the severity of the patient’s condition.
The decision reflects a growing commitment by drugmakers to market their medicines in poor countries, especially outside of the United States. The patients are there, their health care providers are more likely to accept generic drugs, and many big companies see the countries as important markets for further expansion.
But the political temperature is also heating up. In the U.S., pressure to bring down drug prices from a wide range of consumer groups and politicians, including President Donald Trump, has been intense. Also, Pfizer is a major provider of generic drugs and Pfizer executives have regularly spoken publicly in favor of allowing the firm to sell its medicines at a lower price to developing countries.
So far, the announcement has attracted mostly praise from consumer advocacy groups that work to try to limit the size of drug company profits and take away profits from profitable products.
“It’s great news that big pharma is finally taking steps to break its addiction to profiting off the suffering of the poorest patients,” said Catherine Ruetschlin, a health care policy researcher at Public Citizen.
A number of drug companies have announced that they will now manufacture and sell generic drugs. These drugs are licensed for import and sale to middlemen who work directly with the patients in poor countries. They are shipped directly to the local market or into hospital pharmacies.
Vertex Pharmaceuticals Inc. is now selling its cystic fibrosis drug, Orkambi, in 160 countries at a price of $29,000 a year. In the United States, it costs $292,000 per year. The Novartis drug Gilenya, which treats multiple sclerosis, is now sold in 104 countries at $30,120 a year.
Sodium Kufin, a drug used in Thailand to treat high blood pressure, has been made in India at a reduced price, which is now seen as having taken a big bite out of pharmaceutical profits.
Some have criticized those companies for selling drugs, like the ones Pfizer has made in the past in poor countries, at low prices to save money.
“These enormous subsidies at the bottom, which go to the big companies, are supposed to be to the poorest in our society,” said Julia Burch, founder of In the Public Interest, a health advocacy group.
But she said that Pfizer and other drug companies are sometimes willing to cut prices to get developing country clients and that it makes sense.
“They have more incentive to switch to the U.S. because of the structure and rules of the patent system that cause huge profits for them,” she said.
Tackling high drug prices is a major priority for the Trump administration. In a major push, the administration announced on Thursday that it would slash the middlemen’s cut of the price of many drugs and allow more competition from lower-cost generic drugs. The reductions will be phased in over the next two years.
Medicare, the government health insurance program for older people, is one of the few places where the government sets the drug prices.