How the U.S. Can Achieve Fair Drug Pricing
Nov 20, 2015
Market competition benefits everyone. It drives innovation, lowers costs, improves access, and helps people live better lives.
Today at the Health and Human Services’ Pharmaceutical Forum in Washington DC, I’ll join industry leaders to discuss the challenge of rising drug prices.
While representing less than 5% of the world’s population, the U.S. makes up approximately one-third of global drug spend and – more alarmingly – more than half of drug manufacturers’ profits. When pharmaceutical companies charge as much as they can in the United States, the nation’s employers are forced into no-win situations: cover expensive treatments and suffer the financial consequences, or cut back essential care and infuriate hard-working employees.
For an industry that loathes government intervention, drug manufacturers are basically asking for more of it. But none of us wants an outcome that could potentially hinder drug development. Market competition benefits everyone. It drives innovation, lowers costs, improves access, and helps people live better lives.
The Path Forward
The private sector uniquely possesses the ability to balance scientific innovation with budget sustainability, but we need to take several steps now to ensure this sort of competitive market in the future. Manufacturers must show better judgement when pricing innovative products within the United States. They should voluntarily reduce the disparities of international pricing, where Americans are effectively subsidizing the cost of drug development for other wealthy nations. And they need to start supporting biosimilars – safe, effective copies of biologic drugs – which have made specialty medications significantly more affordable in other Western nations for the past decade. Separately, a modernized, better funded FDA would be able to accelerate review of the 2nd and 3rd products in a therapy class, creating more market competition by shortening the monopolies of “breakthrough” medications. The government must put an end to patent extensions for minor changes to existing medications, as well as “pay for delay” schemes that contribute to higher prices.
Competition-Driven Success in 2015
By making prescription drugs more affordable and accessible, Express Scripts puts medicine within reach for the 85 million Americans we serve. Throughout the past year, our novel approach spurred an unprecedented price war that saved the United States more than $4 billion on hepatitis C medications, while expanding access for patients. We collaborated with the manufacturers of the new PCSK9 inhibitors to deliver the best possible costs for our clients. And we are now introducing an indication-based payment solution for oncology medications that will help ensure that a cancer drug’s price is better correlated to the value a patient receives.
We’ve shown that the market – when competitive – can deliver fair drug pricing. Let’s do everything we can to foster and broaden this competition.
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