New Cures Require New Pricing Policies

One critical incentive for ongoing drug discovery and development is the temporary monopoly pricing that manufacturers can command for novel drugs. Yet this incentive, embedded in current patent and regulatory policy, does not guarantee that manufacturers will deliver novel products with clinically meaningful benefits. Indeed there are many diseases---including Alzheimer’s disease and Amyotrophic lateral sclerosis (ALS)---that pose significant patient, family, and societal burden but have not benefited from meaningful treatment advances. Meanwhile, the American public appears increasingly wary of the unintended consequences of these market-based incentives. Since the early 2000s, regulatory actions have focused increasing public attention on shortfalls in the efficacy and safety of already marketed drugs -- including the withdrawal of celebrated “blockbusters.” Recently, patient and insurer attention has focused on the list prices of novel specialty drugs, including those to treat cancer, that commonly exceed $50,000 per treatment course -- these drug prices have also grown faster than all other medical spending. The recent uproar over the list price of Sofusbuvir, a novel drug that is part of a treatment regimen curing almost all patients with hepatitis C, is emblematic of current discontent. State Medicaid programs and commercial insurers have balked at the near-term costs of this and other such drugs, even when they are likely to generate savings to society as a wh...
Source: Health Affairs Blog - Category: Health Management Authors: Tags: Health Policy Lab costs drugs Pharma pricing Source Type: blogs