Proton Pump Economics
From WikidChem
Sorry it's taken so long to get this up here - I had some trouble with setting up an account.
Proton_pump_economics Remember that omeprazole, which we've been talking about, is a proton pump inhibitor. The information on this slide was obtained from a wellmark website - the bluecross/blueshield of Iowa and South Dakota. The graph shows increase of people using proton pump inhibitors over 1999-2003 - an enormous increase, and this is just in IA and SD. In fact, over 15% of members are using this type of drug. Worldwide, over 6x10^8 ppl are using it - as Prof. McBride said, this is the “drug company’s nirvana”. To the right there is a chart showing cost comparison presumably compiled by insurance companies to show the amount people are spending on these drugs. There are different ways of treating acid reflux. At the top, there is a lot of old stuff like Rolaids, Tums costing less than 10c a dose. Then there are H2 blockers which are about 30c a dose. Then there’s the prescription version of same thing, costing $3-4 a dose. I.e. when the drug comes out of patent protection, cost goes well down. At the bottom, there is the third line treatment with the heavy hitting substance that are the PPIs. Prilosec in 1988 cost $4.61 a dose. Once it came out out of patent protection and generic people started selling omeprazole, the cost went to $2.76, but in 2003, Astro Zenica who manufactures Prilosec and have been at it longer, introduced OTC prilosec for 79c a dose to undercut the generic ppl. At the same time, they also tried to get a better drug, Nexium which is single enantiomer s-omeprazole, and have sold since 2000 for almost $5, thus we begin to question whether nexium is indeed better. To find out, they must do tests on a group of people, especially since there is reason to think it wouldn't be much different. At any rate, this is an example of a chiral switch - the replacement of a racemic drug by a single enantiomer drug.
Do you know how Prilosec is able to sell their OTC drug for so much less despite the fact that it is (assumedly) nearly identical to the prescription version? Is it merely that there are less government taxes on the production? - ADM
No, not taxes. The cost of such a drug, from the point of of view of the pharmaceutical company, is not the cost of production, shipping, etc., but rather the cost of development, advertising, and running the company. Since so few experimental drugs make it to market it is important for the company to recoup the cost of inventing and developing a lot of unsuccessful drugs by selling the successful ones at a premium during the period of patent protection. Once the patent has expired and competitors, who have not had to bear the cost of development, have entered the market, the more experienced originator can easily produce the drug for a lower cost, though it may choose to devote its efforts to developing new drugs that can be patented. - JMM
