Competition is the backbone of our nation’s economy. When it comes to healthcare, patients today are benefitting from vigorous market competition with better, more innovative treatments and improved cost savings.
One recent example demonstrates that the marketplace continues to work in favor of America’s patients.
Historically, hepatitis C has been one of medicine’s confounding puzzles, exacting an excruciating toll on millions as the leading cause of liver transplants and driving the incidence of liver cancer to new highs. A cure seemed a distant miracle—until a number of innovative biopharmaceutical companies revealed breakthrough medicines that not only treat the disease, but can cure 90% of patients.
A reason for America’s patients to celebrate? Not according to a number of America’s pharmacy benefit managers, which appeared to be looking to influence the market when unleashing a deluge of doomsday scenarios: “Financial havoc,” one said; this will “break the country,” another warned; while one more implied the new treatments would unleash “a tsunami effect across our entire healthcare system.”
Why does this matter? It matters because a handful of very large and sophisticated PBMs account for nearly 81% of all prescriptions in the US—and these kinds of charged sentiments temporarily disrupted the national dialogue on the evolving US healthcare system.
While the price of a medicine may increase or decrease over its lifetime, prices fall dramatically as competition occurs among brand-name medicines—and even further with the introduction of generics. Innovator companies invest in research to develop new medicines and, over time, they become available as lower-cost generic versions that typically cost up to 80% less. In fact, nearly 90% of all medicines dispensed in the US are generics. And all the while, PBMs and insurers aggressively negotiate the prices of medicines they cover.
In the hepatitis C example, this reality was demonstrated by the healthcare marketplace doing its work to control costs while encouraging the development of new therapies—and proving the doomsayers wrong. Last year, PBM industry leader Express Scripts admitted as much, saying hepatitis-C treatment is less expensive here than in many Western countries. Last month, the firm also cited its CEO as saying, “We are able to save Americans $4 billion and cure more patients with [hepatitis C] than any time in history.”
That is a reason to celebrate, and we look forward to collaborating with stakeholders across the healthcare system—including PBMs—to extend success to other disease states. With more than 7,000 medicines in clinical development around the world right now, and 70% of them having the potential to be first-in-class therapies, we are optimistic that some will soon reach the market—and, more importantly, America’s patients.
Stephen Ubl is president and CEO of the Pharmaceutical Research and Manufacturers of America.