Can Pharma Escape the Drug Pricing Policy Hammer?

While difficult to believe that Democrats and Republicans might now find common ground on any policy issue, one topic that unites them is the cost of drugs. Even congressional delegates from key biomedical innovation states—California, Massachusetts, and New Jersey—pushed to the front of the line to attack medication costs and industry pricing intentions.

Could any price set by pharma mute the ever-growing chorus of discord? Doubtful, but there is a path forward: Recognize that communicating price and the magnifying glass of public scrutiny are inescapable, and act accordingly—and decisively.

Three lessons to study in this environment:

  1. Priced to Go Out of Business: Gilead’s Sovaldi transformed the hepatitis C landscape, curing this once progressive disease, but the lingering story is cost at launch—$85,000 for a course of treatment. It’s unclear if Gilead ever conducted an economic impact study that would have offset the $1,000-a-pill sticker shock. Coming out early on the impact of managing this disease might have helped payers realize that Sovaldi, with its cure potential, was a bargain compared to treating a persistent disease.
  2. Inside-Out or Outside-In Pricing: Developed by Amgen and Regeneron, PCSK9s hold life-saving potential for people with familial hypercholesterolemia or statin intolerance. But, the $14,000 launch price made payers balk. The companies noted that these products are the “least expensive biologics” on the market. However, payers were not comparing Praluent and Repatha to biologics, but rather to generic, less expensive statins. Once the misstep was clear, the next move was to make patient access top priority. Expect payer push-back and move faster to align interests.
  3. Don’t Expect Others to Understand: Kaléo, makers of life-saving opioid overdose reverser Evzio, came under fire for price jumps during a four-year span to $4,100. Some of the increases resulted from policies and paperwork to access the medication. Their path out of the reputation hole was to provide easily understood pricing and access approaches. The old adage, “not my circus, not my monkey,” won’t work. Find a solution and move.

Discoveries in translational and precision medicine enable researchers to tackle once-deadly illnesses. The resulting specialty drugs will likely come with a weighty price tag, and both payers and lawmakers are watching out for these wannabe blockbusters with angst. Today, transparency starts before pharma companies reveal price. Getting to approval is not enough. Now, marketers must start early in creating the right strategy, defining the economic changes that their innovations create, listening to the developing public conversation, and keeping their fingers on the pulse of the market to adapt quickly.

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