Manufacturers charged up to 445% above approved cost, watchdog says - And some people protest that this is not a profit driven industry.
The manufacturers of two new medicines used to treat children with attention deficit hyperactivity disorder are being accused of charging excessive prices for the drugs.
Investigators for the Patented Medicine Prices Review Board allege consumers are overpaying for Janssen-Ortho's Concerta and Shire BioChem's Adderall XR by amounts ranging from 115 per cent to 445 per cent above the maximum level the board set for drugs of their type.
The medications use new time-release mechanisms to deliver chemicals used in older ADHD drugs, allowing patients to take just one pill a day, instead of three. But the price board's allegations say that the prices should have the same limits as the older drugs they claim to improve on -- Ritalin and Dexedrine.
The challenge to the pricing of ADHD drugs raises a difficult issue in health care policy: what degree of improvement on an existing drug should consumers, insurance companies or governments pay for?
The board requires that the limit on the prices of so-called "me too" drugs that enter the market be in line with older drugs, unless they are considered a breakthrough or substantial improvement on existing treatments, which Janssen-Ortho and Shire BioChem believe their medications offer.
But for those without insurance coverage, the costs of the new ADHD drugs can be onerous. For a family with three children with ADHD, monthly bills can run into the hundreds of dollars. For some, price is a determining factor in whether their children can take the medicine.
"It's embarrassing to ask an individual, 'Do you have a drug plan', because that is what is going to determine if I can suggest these medications," says Dr. Umesh Jain, a psychiatrist and chairman of the Canadian ADHD Resource Alliance.
(Dr. Jain acknowledges that his organization receives funding from Janssen-Ortho as well as many other drug companies.)
Neither Concerta nor Adderall XR are currently listed on the Ontario government's provincial formulary, so social-assistance recipients are not covered for the newer class of drugs. Some patients can get relief by making a special application under Ontario's Trillium drug plan.
Concerta wholesale prices range from $1.98 to $3.20 per capsule, depending on the dosage strength. It has the same active ingredient as Ritalin, which has price limits ranging from 50 cents to $1.45 per tablet for comparable dosages.
The same price limits are in place on Dexedrine, which has the same ingredient as Adderall XR. In all dosages, Adderall XR sells for $2.75 per pill.
A spokesperson for Janssen-Ortho Canada called Concerta a "technological breakthrough" in the treatment of ADHD and said the company will appear at the hearings to defend its pricing structure.
Hearings are currently under way in the Adderall XR case. The board will hold hearings into Concerta pricing in September.
The board is a quasi-judicial body set up by Parliament to regulate the prices of patented medicines.
If the board determines the prices were excessive, it can require the manufacturers to reimburse the overcharged amounts through a payment to the Crown or through further price reductions.
The board can also seek compensation for up to twice the amount overcharged.
Health Canada pulled Adderall XR off the shelves in February 2005 over safety concerns, but the drug was brought back later that year after manufacturer Shire BioChem agreed to a revised label warning of risks for people with structural heart abnormalities.
ADHD is considered the most common psychiatric disorder in children. A 1989 study estimated that between five to nine per cent of school-aged kids in Ontario are affected by ADHD.
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