Pharmaceutical Company Refuses to Market Drug Over Price Disagreement
30 Jun 2006
Bristol-Myers Squibb Canada refused to market the colorectal cancer drug, Erbitux, after a disagreement with the Canadian government’s Patented Medicine Prices Review Board over the price of the drug.
The Board regulates drug prices to ensure that they are not excessive. For pharmaceutical companies, the cost of drugs reflects their investment in research and development—which oftentimes can be risky. Consumer advocates have expressed the concern that skyrocketing prices might keep drugs such as Erbitux out of the reach of patients who need it most. Price regulation is a double-edged solution, as it could deter new innovations for human health from being developed and marketed.
The refusal to market the drug in Canada over the price regulation dispute has cost the Canadian government: in the fiscal year 2005-06, Ontario’s Health Ministry spent $3.6 million to send 34 Canadian cancer patients to the United States for Erbitux treatment.
Drug prices in the United States are not regulated as strictly as they are in Canada and Europe. In Europe, Erbitux commands half the price that it does in the United States. E. Richard Gold, Director of the Centre for Intellectual Property Policy at McGill University, expressed the desire to see the Canadian government impose a “compulsory license,” which would permit the production of a generic equivalent to Erbitux.
Source: Priest, L. Drug makers expected to shun Canada – Price Disputes will likely keep new products off shelves, group predicts. The Globe and Mail. June 23, 2006. P. A12.
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