Estradiol the Scam What Am.
Long before I heard of estradiol, back when I was earning my MBA in the 1970s, we talked about barriers to entry, and how companies (or even countries) can, and do, exploit them to prevent competition . A barrier to entry is anything that makes it hard for someone else to produce or sell a similar item. That barrier could be resources. If you owned the only diamond mine in the world, you would effectively control the market. The barrier to entry would be so high that no one could enter the market without your consent. There are legal and regulatory barriers too. The patent system was deliberately designed to be a barrier. A patent is a form of ownership that gives inventors a temporary monopoly in order to reward their innovation, as a matter of public policy. Patents can be granted on inventions in many different industries besides pharmaceuticals. But for products in the drug and medical device industries, FDA approval can become another barrier to entry. FDA exists to protect the public against unsafe products, not to reward invention, but the long approval process for a new product can give extra protection to the first company to develop a drug – and interfere with competition.
Of course, pharmaceutical executives don’t go around bragging that they have an extra layer of protection against competition. Back in 1959, when the Senate investigated price fixing in the pharma industry, the head of Schering denied his company was charging excessively high prices for estradiol and other products. A New York Times article paraphrased his response: “If drug prices are high, he said, it is because of the large costs of blazing new trails in medical research, ‘and the consumers of today must contribute to the benefits which the future will bring.’”
Sounds convincing, doesn’t it? Certainly a whole lot better than saying “We like making gobs of money from people who need our products if they want to stay healthy.” But the Senate committee didn’t buy the “research” argument – they went on to ask Schering why they were selling some products to the military for pennies on the dollar of the retail price. And you, my post-menopausal friend, shouldn’t buy that “research” line either. Why? Because pharmaceutical companies have marked up estradiol by thousands of percentage points for over fifty years, and they are selling the same product for menopausal women that they were selling half a century ago. That’s a lot of “research” with no results that benefit women past menopause. Or their male partners, for that matter—half a century into the use of this product, the package insert that comes with estradiol cream still does not say how long to wait after using the product before it’s safe for your partner to have heterosexual intercourse. Not a big issue you may think; if so, I’d suggest the episode of Doc Martin where a number of men present symptoms to him that include breast development. It turns out that all three men are having an affair with a woman using copious amounts of estradiol before their sessions.
Even the eventual FDA approval of generic estradiol did little to lower prices. Generic drugs are approved by FDA based on the data for the active ingredient presented by the original manufacturer. The generic company is only required to provide limited data on therapeutic effect and absorption. The regulatory path is much shorter and the development costs much lower. In addition, generic drug companies are more likely to manufacture in other countries where FDA oversight of manufacturing is less stringent and costs are lower. As questionable as the “research” rationale is for high drug prices, the generics industry lacks even that. Yet a 2018 article from GoodRx (the encyclopedia of prescription medications) pointed out that when FDA approved generic estradiol, the prices did not fall nearly as much as expected. The barriers to entry no longer prop up the price of estradiol. So why is the price so high?
In 2019, prosecutors from 44 states filed a lawsuit in Federal District Court alleging that generic drug manufacturers including Mylan (which manufactures generic estradiol) had conspired to inflate prices on over 100 medications by up to 1000%. Connecticut Attorney General William Tong said, “This may be the largest cartel case in the history of the United States.” The lawsuit alleges that generics drug executives met at cocktail parties, golf outings, and other events to agree to fix prices, and to avoid leaving records of this activity which they knew to be illegal. This collusion extended to 400 formulations of over 100 generic drugs, according to court documents. It is interesting, though, that while estradiol tablets are specifically listed as one of the drugs in the lawsuit, estradiol cream is not.
And where are the insurance companies in all this? I remember back in the day when insurance copays for prescription medication ran around five dollars. Insurance companies were a source of pressure on pharmaceutical companies to keep their prices in line. No more. Oral estrogen pills for contraception are priced lower and qualify for a lower deductible under many plans (including the AARP supplement to Medicare, for all you retired ladies concerned about pregnancy!). But estradiol cream is seen as a drug to treat sexual health, and is typically classified as a higher tier, with the insurance company covering relatively little of the inflated cost. This means that the supplemental insurance we pay for on top of Medicare is of little value when it comes to a medication that is needed by about half the women on Medicare. A GoodRx coupon may give you a lower (but still extravagant, in my view) price than using your insurance coverage; it does for me, on my AARP plan.
In July 2018, Dr. Kirtly Jones was asked in a University of Utah podcast why the cost of vaginal estrogen is so high. “Now, if I wanted to take estradiol, my natural hormone, by pill for hot flashes, I could go to Walmart and get a 90-day supply for $10. If I wanted to use the same hormone vaginally, prepared to be absorbed by the vagina and this isn’t rocket science, or advanced drug technology, it will cost $520 depending on how the estradiol is delivered. Now, $520 is the upper end, $300 is the lower end. So what is the reason that the pharmaceutical industry puts such high prices on vaginal estradiol? It’s because they can.”
They can and they they do. They have been overpricing estradiol for more than half a century. And the women affected by this scam have had little to say about it – and we should. Loud and very clear.
So what can we do now about the price fixing and poor insurance coverage of vaginal estrogen? Stay tuned for the next edition of this series to learn more.
Learn More about the Topics in Part Two:
Information on the generic drug approval process:
GoodRx Article on the price increase in vaginal estrogen:
Article on the pending generics price-fixing suit naming all defendants and all drugs in the complaint:
Transcript of Podcast with Dr. Kirtly Jones:
Coming Up Next:
Part three looks at actions we can take at an individual level, and how we can break the silence and organize for change.
In Case You Missed It: Part 1
Part One described the causes and symptoms of GSM, how it is treated with vaginal estradiol cream, and quoted a Senate investigation of estradiol price fixing from half a century ago.