Drug Pricing
Public Health Implications

Summary

DRUG PRICING: PUBLIC HEALTH IMPLICATIONS
The Dr. Lawrence H. and Roberta Cohn Forums
Presented in Collaboration with Reuters and in Association with Harvard Health Publications

We are deeply saddened by the loss of Dr. Lawrence H. Cohn, advisor and supporter of this Forum in addition to others in the The Dr. Lawrence H. and Roberta Cohn Forums series.

A full course of treatment with the blockbuster Hepatitis C drug Sovaldi costs $84,000 in the United States. A year on the new injectable cholesterol drugs Repatha and Praluent tops $14,000. The price of new cancer drugs now averages $10,000 per month, according to one estimate. Straining under the pressure, doctors, patients, and insurers are raising alarms over skyrocketing prices. Earlier this year, the American Society of Clinical Oncology released a new “value framework” for drugs that considers health benefit and price to help guide doctor-patient conversations around treatment options. For their part, pharmaceutical companies and some economists argue that the high cost of drug development justifies the price. This Forum explored the factors driving the high cost of new drugs. What policy changes, from the drug approval process to patent law, could change the equation? Are some of these drugs worth the cost? And what can be done to make sure that patients can afford the medications that they need?

Brief Video Highlight

Part of: .

Presented in Collaboration with Reuters and in Association with Harvard Health Publications

Background Articles

Image Credit: ©iStockphoto.com/ptlee

  • Marjorie

    Please comment on behavior controling medications for special needs and education
    Thank you
    Skillman

  • The Forum Moderator

    Welcome. We’ll begin our event in about 20 minutes. (around 12:30pm ET)

  • The Forum Moderator

    We’ll being in about 5 minutes.

  • Robert Romero

    Will you include Canada’s pricing in this discussion?

    • The Forum Moderator

      We will mostly be talking about pricing in the U.S. but we will touch on pricing in other countries.

    • The Forum Moderator

      The discussion will mostly focus on US but will include some discussion of pricing in other countries.

  • The Forum Moderator

    Our event has begun. Thank you all for joining us today.

  • The Forum Moderator

    This event is in collaboration with Reuters and in association with Harvard Health Publications.

  • The Forum Moderator

    The clip that we saw was courtesy of Reuters.

  • The Forum Moderator

    Generally, drugs in US cost 2-6 times than elsewhere, says Pearson.

  • The Forum Moderator

    Dr. Schnipper chaired the ASCO Value in Cancer Care Framework, which in part is aimed toward helping doctors and patients talk about costs and treatment: http://jco.ascopubs.org/content/33/23/2563

  • The Forum Moderator

    We will have a Q&A later in our discussion. Post your questions for the panelists here. Or you can email them to theforum@hsph.harvard.edu

  • Margaret

    What specific steps can Congress or the Administration take to set up such a value framework as mentioned Mr. Schnipper?

    • The Forum Moderator

      Great question. Thanks, Margaret.

  • Zack Struver

    Zack Struver from Knowledge Ecology International, question for all panelists: What are your thoughts on delinking the cost of research and development from the price of medicines?

    • The Forum Moderator

      Thanks Zack.

  • The Forum Moderator

    Steve Pearson comes from the Institute for Clinical and Economic Review: http://www.icer-review.org/

  • All of the potential solutions discussed here will take time. We regularly hear from Americans who simply can’t afford their meds. What’s your opinion about legalizing drug importation from licensed and safe international online pharmacies so that patients can access affordable medication now?

    • The Forum Moderator

      Excellent point. Thanks for the question.

  • The Forum Moderator

    We will post this video on demand on this website later this weekend.

  • Aude Rambaud

    how long will the video be online after the live ?

    • The Forum Moderator

      We expect it to be posted within 48 hours.

  • Kate

    Will ASCO publish comments to the Value Framework it solicited from stakeholders? Can Dr. Schnipper discuss more about the separate policy tool he mentioned? When will the next iteration of these tools be released?

    • The Forum Moderator

      Thanks!

  • The Forum Moderator
  • Elizabeth

    I have a question regarding what was said about the cost of medicines (I think by either Steven Pearson or Lowell Schnipper). Do you believe we should allow pharmaceutical companies to force patients to choose between sending their children to college or receiving critical treatment and care? Or should we be forcing pharma to decide between selling at reasonable prices or generic competition, importation, compulsory licencing etc?

  • Ellen Licking

    Can we discuss transparency around rebates currently in use? This seems another key misaligned incentive that needs to be part of the debate.

  • Nick S

    Prices are often set based on a drug’s first market indication, how do you suggest accounting for drugs with one or many follow-on indications thus increasing the overall value of the product?

  • The Forum Moderator

    These are great questions. I’m passing them along. Our Q&A will start shortly and we’ll get to as many as we can.

  • LaTasha Lee

    In regards to the Medicare Negotiation issue there is legislation in Congress seeking to address this … S31, HR 3061

  • Ellen Licking

    For all panelists: could you address how pay for performance (or pay for outcomes) might be implemented in the US? What hurdles need to be overcome to have risk sharing between pharma and other stakeholders?

  • zzz05

    This raises the specter of the WSJ editorial page leading another crusade against death panels, all over again. The American public has shown its inability to have an adult discussion regarding cost/benefit tradeoffs, when the alternative is to throw a tantrum about not getting everything they want for free, with the blessing of the supposedly wiser heads of the supposedly “financially conservative” faction.

  • Kyle

    The manufacturer’s list price, AWP stands for “Ain’t What’s Paid”. Could you speak about the opaque pharmaceutical value chain and how it increases the cost to payers and patients?

    • zzz05

      Actual quote I heard from an insurance biz exec re payment and pricing for both pharmaceuticals, and also medical services: “They pretend to bill us, and we pretend to pay them”. Perfect synopsis of the situation.

  • Reshma Ramachandran

    On behalf of National Physicians Alliance – Can the panelists (particularly Dr. Kesselheim) address how the 21st Century Cures, passed in the House and now in the Senate, will affect the value of drugs being approved by the FDA given that it will be lowering the standards for drug approval and how this bill might affect drug pricing?

  • Reshma Ramachandran

    On behalf of the National Physicians Alliance – Given FDA’s role in awarding extended IP protections through increased data and market exclusivity, which are incentives for innovation, shouldn’t the agency be involved in regulating drug prices as these incentives directly influence the cost of drugs?

  • zzz05

    On another note, the defense of the drug companies for their pricing is that they are essentially a high risk industry; they bet a major fraction of the company on each new drug development, and if a couple of drugs fail during late clinical trials, the company can go bankrupt. Financially, of course, nobody will invest in such an industry if the profits aren’t sufficiently high. Wildcatting for oil, for instance; or microcircuit chip development for other examples. As such, their prices are and always have been, transparently, “whatever maximizes our profits” with no relation to the actual cost of manufacture of each pill; i.e., high fixed costs, low variable costs.
    And their ability to bring new and truly useful drugs to market has been declining for decades, as basically the mine is played out, raising the risk factor. Probably has a lot to do with the cutbacks in funding of basic research in universities, etc. which provide the raw material for the drug companies to run with. But that’s why their budget has turned to more marketing and me-too drugs and research into patent law, than research into finding new and valuable therapies.

  • John Wilkerson

    When CMS updated its rarely used “inherent reasonableness” reimbursement authority in 2012, it said it didn’t anticipate applying the policy to drugs, but it retained the right to do so. Could CMS that power to force companies to lower prices? What are the arguments for and against that policy?

  • The Forum Moderator

    What a dynamic chat. Thanks all! We’re starting to wrap up. This video will be posted online in full on this site and on YouTube and iTunesU.

  • The Forum Moderator

    We thank our viewers as well as Reuters and Harvard Health Publications and Dr. Lawrence and Roberta Cohn.

  • The Forum Moderator

    Join us again on Nov 10 for The Modern Slave Trade: Public Health Impacts from 12:30-1:30pmET at https://theforum.sph.harvard.edu/events/the-modern-slave-trade/

  • The Forum Moderator

    Thank you all again!