By Toby Sterling

AMSTERDAM (Reuters) – In a radiation-proof room at the Erasmus Medical Center in Rotterdam, Emar Thomasa sits behind shielded glass as he carefully measures and mixes lutetium octreotate, an intravenous treatment for certain types of cancer.

The Dutch hospital has been offering it to patients for more than a decade at 16,000 euros ($18,000) for one course of treatments. Drug firm Novartis, which in 2018 acquired rights to sell it in Europe, is asking more than five times that for its proprietary version, Lutathera.

Thomasa is part of a protest against high drug prices launched by an unlikely group of rebels: Dutch pharmacies.

Three – Erasmus, Amsterdam’s University Medical Center (UMC) and the Transvaal Pharmacy in The Hague – have vowed to bypass drug company products and make treatments for a handful of rare diseases themselves, exercising their right to “compound” medicines.

The Dutch market is small, with only hundreds of patients for the diseases in question. But the dispute is part of a growing global backlash against high drug prices, from the United States and Canada to Japan, and campaigners said it was being closely watched by health experts elsewhere.

“People with rare diseases are dependent on medicines that are so expensive that they can’t afford them, when they could be offered for a much lower price,” said UMC pharmacist Marleen Kemper.

“The pharmaceutical industry plays an important role in developing good products, but we think it’s not fair if these firms make big money off these patients.”

Compounding is the ancient practice of preparing medicines for individual patients. Pharmacists are trained to compound, though nowadays most medicines are made by industrial producers.

Drug companies have raised concerns about the safety of compounded medicines that have not been approved by European regulators. But the specialized compounding pharmacies, which have on-site laboratories, have been backed by the Dutch government as part of efforts to tame rapidly rising medicine costs.

UMC received a 5-million-euro grant last month to expand its compounding program. It plans to use the money to set up a center to swap know-how with pharmacies at home and abroad.

The drug industry, including Swiss giant Novartis and Italian-based Leadiant, argue Dutch national supervision of pharmacy preparations is not comparable to the European standards that apply to pharmaceutical companies.

A spokesman for Leadiant said when Dutch patients suffering from rare diseases were exposed to medicines that had not been subject to the stringent testing required of authorized drugs, it could have “significant repercussions” for their health.

Novartis CEO Vas Narasimhan told Reuters the price his company asks for Lutathera is justified. He said it was impossible to compare the treatment made at Erasmus with Lutathera, which received approval from EU watchdogs after proving it worked in its exact formulation.

The potential perils of compounding were shown in 2012 in the United States, where the market is more developed. A meningitis outbreak that killed more than 60 people was traced to contamination in steroid injections made at the New England Compounding Center, which was then overseen by Massachusetts state regulators.


The worldwide push against high drug prices has seen the Trump administration in the United States declare bringing down prescription prices a top priority.

In Canada, industry lobbying groups have offered concessions as they seek to avert a government crackdown. And in Japan, regulators are considering a cost-effectiveness test as a means of capping prices.

The Dutch pharmacies, whose production is on a small scale, acknowledge they may face legal challenges from the drug industry. However, such a case could set a precedent for other European countries.

The Netherlands has an influential voice in Europe as the seat of the European Medicines Agency, which scrutinizes and approves drugs for all EU countries. The EMA has moved to Amsterdam as a result of the Brexit vote.

Pharmacies retain the right under European and American law to prepare medicines for individual patients. Common examples including making lower dosage versions for children or liquid versions for people with difficulty swallowing.

However, in the United States, for-profit compounding pharmacies have tested the limits of what they are allowed to do in recent years, including mixing medicines in large quantities. In some cases, that has prompted legal conflicts with drugmakers.

Official scrutiny of the practice increased after the 2012 deaths in Massachusetts, which led to U.S. lawmakers requiring bulk compounding facilities to register with the Food and Drug Administration (FDA) and meet quality and labeling standards – still not as stringent as full FDA drug approval.

Els Torreele, who oversees the Doctors Without Borders Access Campaign, applauded the Dutch pharmacies’ move. She said the developments in the Netherlands were being followed by medical experts and politicians in other countries, which could follow a similar path.

Torreele said big pharmaceutical companies sometimes lost sight of the fact that rules granting them exclusive manufacturing rights for new drugs were intended to foster innovation, not guarantee large profits.

“If (drug companies) can play a role in providing medicines at an affordable price, fine, but when they become a barrier, then there’s a problem,” she said.

Dutch Medical Care Minister Bruno Bruins attended the opening of a new compounding laboratory at the Transvaal pharmacy in January. His government has vowed to curb drug price increases, a pledge welcomed by the public.

Costs for new medicines in the Netherlands rose 9 percent in 2018, according to a report by the country’s Heath Authority, continuing a multi-year trend.

“We need drugmakers like Novartis for medicines now and the medicines to come,” Bruins said. “We really can’t do without them. And yet we want them for a reasonable price.”


The first two drugs targeted by Dutch pharmacies are Novartis’s Lutathera and a drug called CDCA, registered in Europe by Leadiant.

High prices are not unusual for new rare disease drugs, as companies must recoup development costs from a relatively small group of patients.

Novartis charges 92,000 euros for a one-off course of four Lutathera injections. But while the drug is innovative, its development costs were relatively small and cannot justify the price tag, said Erasmus MC Chief Executive Ernst Kuipers.

Main development costs amounted to about 40 million euros, including 15 million euros in public funding, according to Erasmus – where most of the testing took place – and a review published in the Dutch Journal of Medicine.

Novartis bought the rights to Lutathera with a $3.9-billion-euro takeover of French company AAA last year.

The drug had just been approved by the EMA as a treatment for certain cases of endocrine cancers, which affect one in 27,000 people. Although Lutathera is not a cure, it often gives patients several extra years of healthy life.

Novartis boss Narasimhan said he was worried by developments in the Netherlands.

“The Netherlands’ characterization that the local medicine that is made in the hospitals is the same as what we’ve done from a regulatory, full-development standpoint, particularly given (the Dutch) will house the European Medicines Agency, I think is troubling,” he told Reuters in an interview.


In the case of CDCA, a decades-old gallstone medicine, the drug used to cost 30,000-40,000 euros for a year’s worth of pills. Since the 1990s it has been used only as an off-label treatment for a rare genetic disease known as CTX.

That changed when Leadiant formally registered the drug as a treatment for CTX with the EMA in 2017, and began asking 163,000 euros.

Amsterdam’s UMC, which treats all 60 known CTX patients in the Netherlands, compounded CDCA itself from April-August 2018. Then the Dutch Health Inspectorate found an impurity in its formulation after Leadiant requested a lab inspection.

The inspectorate “rightly protected patient safety”, Leadiant told Reuters.

UMC says it intends to resume production of CDCA once it can guarantee it meets all required standards.

There are only 200 people in Europe known to have CTX, and only several hundred cases have been recorded worldwide. But scientists say it goes undiagnosed in most cases, and the true number of sufferers in the United States alone could be 10,000.

With early and lifelong treatment with CDCA, the effects of CTX, which include mental deficiencies and eventually death, are preventable.

Leadiant defends its pricing, saying it bore significant costs by undertaking a human study demonstrating the drug’s effectiveness, which had never been done before.

Battle lines are drawn.

Bruins told parliament last month that he planned to “confront” drugmakers and demand transparency on development costs.

“I can and will be having talks with a lot of individual companies,” he said. “And I’ll say, of course I want to keep your innovative power, but temper your prices.”

(Reporting by Toby Sterling, John Miller and Elyse Tanouye; Editing by Pravin Char)