Prescription Skin Drugs Explode in Costs, Study Shows

By Ron Winslow 

Retail prices of 19 brand-name prescription drugs for dermatologic conditions ranging from acne to cancer increased fivefold on average between 2009 and 2015, according to a study that adds new fuel to the burgeoning debate over the cost of medicines.

In the most dramatic case, a 2-ounce tube of gel called, Targretin marketed by Valeant Pharmaceuticals International Inc. for a type of skin cancer, jumped to $30,320 this year from $15,708 last year and $1,687 in 2009, the report found--an 18-fold jump in six years. The retail price of another Valeant skin-cancer drug, Carac cream, also was 18 times higher this year, at $2,865, than in 2009.

Valeant is already under fire for drug-pricing practices, but the researchers said their results show big price jumps are a common occurrence in the industry. Prices for drugs made by companies such as GlaxoSmithKline PLC and Novartis AG at least doubled or tripled over the same time frame, far outpacing inflation and growth in health-care expenditures.

"It's not just Valeant," said Miranda Rosenberg, lead author of the study, which was published Wednesday by the journal JAMA Dermatology. "It's a phenomenon that's going on across the pharmaceutical industry."

Valeant said it sets prices based on development or drug acquisition costs, the availability of alternatives including generics and other factors, and offers patient-assistance programs when possible keep drugs affordable. Glaxo said it is "committed to helping ensure patients can access the medicines they need" and to "thoughtfully handle price increases." Novartis didn't immediately return a call seeking comment.

Drug companies say few patients or insurers pay full retail prices for prescription medicines and that actual costs are often further reduced with discount coupons, rebates and other programs. Cheaper generic versions of the medicines in the study, including four of five Valeant products covered in the report, were and remain available in many cases.

The researchers said higher list prices at the pharmacy still affect consumers' out-of-pocket costs, especially as insurers impose higher copayments and deductibles in response to increasing costs.

Ms. Rosenberg is a third-year medical student at the University of Pennsylvania Pearlman School of Medicine. She undertook the research with her father, Stephen Rosenberg, a dermatologist in private practice in West Palm Beach, Fla. who also teaches at the University of Miami Miller School of Medicine.

Dr. Rosenberg said a patient recently called him from a pharmacy to seek an alternative for a prescription for Olux-E foam, a treatment for psoriasis and atopic dermatitis that cost $45 a year ago. The patient was being asked to pay a copay of $450.

"There has been all this attention to all the cancer and hepatitis C drugs," Dr. Rosenberg said, but less to more commonly used medicines. The report brings "some attention to something that affects the majority of people," he said.

The study found that a 100-gram dispenser of Olux-E foam, which had an average retail price of $308 in 2009, listed this year for $842, a 174% increase. A person answering the phone at the drug's maker, Prestium Pharma, of Newtown, Penn., declined to comment.

The findings come amid growing criticism of industry pricing practices, sparked by such factors as hepatitis C drugs that hit the market at $1,000-a-pill; six-figure-a-year cancer treatments with marginal survival improvements; and companies' use of price increases to maintain sales growth in some products despite flagging demand.

Valeant, a major player in dermatology, has encountered criticism in part for sharply raising the price of old drugs immediately upon acquiring them from other companies, despite a limited commitment to investing profits in research for new drugs. Retail prices of both Targretin and Carac in the current study rose sharply after Valeant bought or licensed the medicines.

Retail prices for two Glaxo drugs, Altabax for impetigo and Soriatane for psoriasis, doubled over the six-year period, the study showed.

The antifungal Oxistat cream for jock itch and athlete's foot, marketed by Novartis, jumped to $545 this year from $76.50 in 2009, a sevenfold increase, the report found.

The authors said they didn't set out to expose drug price increases. Their plan was to establish a database for dermatologists in Florida with price information on drugs they typically prescribe for patients.

Ms. Rosenberg, an undergraduate when the research began, surveyed four pharmacies near her father's office: a Costco, Walgreen's, Sam's Club and a CVS pharmacy and averaged the responses. The analysis in JAMA Dermatology focused on 19 of as many as 120 drugs included in the survey.

Prices increased relatively modestly between 2009 and 2011. When the 2014 results came in, the price increases were "just astronomical," Dr. Rosenberg said. "It made no sense. We decided to put together an article." By the time it was accepted for publication, they had obtained data for 2015.

Dr. Rosenberg said trends were similar among the medicines, including generics, that weren't included in the published analysis.

Write to Ron Winslow at [e-mail]

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November 25, 2015 11:15 ET (16:15 GMT)

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