Finding a Better Strategy for Pricing Drugs
Photo credit: House Committee on Oversight and Reform
Martin Shkreli, former CEO of Turing Pharmaceuticals, sat before Congress and refused to answer the simplest question. He then taunted Congress with Tweets, calling them “imbeciles.”
The Congressional hearing was largely focused on price increases on generic drugs that have little competition. The thinking at Turing and Valeant was very simple: as long as someone else is paying the bill (like insurance companies and health systems), and not the patient, no one will notice.
But they did notice. What these players forgot was that hospitals and insurers — including the government — have to actually pay for the drugs, and that those expenditures are passed along to the insured.
Right now, there is a large fire burning on Capitol Hill, and that fire is pharmaceutical pricing. Members of Congress from both parties are demanding something be done about it. The front-running presidential candidates, Hillary Clinton, Bernie Sanders and Donald Trump, are calling for the government to directly negotiate prescription drug prices. President Obama's most recent budget includes giving HHS the authority to directly negotiate drug prices.
So now what? Every one of us should consider the patient, who may end up paying for our services. This includes agencies, buyers, marketers, and manufacturers. We need to consider that not every expenditure is beneficial to patients: perhaps that Super Bowl commercial or that sales meeting in Maui may not be in their best interest.
See also: Escaping the Shkreli Cycle
When making pricing decisions, step back and think how this price might affect your child or your grandparent. It is important that we as an industry, and as American citizens, don't lose sight of who we are here to help and the fact that we are creating cures and treatments that extend both life itself as well as the quality of life.
There has to be a way to price pharmaceuticals so we don't break the banks of our government, employers, and patients.
Tom Sullivan is president of Rockpointe.