It’s often difficult to pinpoint the moment a revolution starts, but when it comes to the issue of drug pricing, it’s quite possible that we’ll look back at Dec. 6, 2013, as the day that everything changed.
That was the day that Gilead’s Sovaldi was approved for sale by the FDA. Sovaldi’s launch — and its $84,000 price tag — set off a tsunami of media attention on the issue of medication costs. Never mind that Sovaldi has an incredible cure rate, all of the attention fell squarely on its $84,000 price tag.
Since then pharmaceutical drug pricing has been a regular media hot topic. There was coverage of a recent study that found older drugs were being priced higher in an apparent attempt to keep their prices in parity with newer alternative treatments. That was followed by a report in the Wall Street Journal about how pharmaceutical companies buy the rights to drugs from other manufacturers and then dramatically increase prices:
“On Feb. 10, Valeant Pharmaceuticals International Inc. bought the rights to a pair of life-saving heart drugs. The same day, their list prices rose by 525% and 212%.
Neither of the drugs, Nitropress or Isuprel, was improved as a result of costly investment in lab work and human testing, Valeant said. Nor was manufacture of the medicines shifted to an expensive new plant. The big change: the drugs’ ownership…”
Many years ago, back before I got into the healthcare analytics space, I was an investment banker and subject to the rules and regulations laid down by the SEC and FINRA. In that business, we had to be aware of potential client red flags like market manipulation and insider trading. Maybe it’s the training that’s kicking in here, but when I see stories like those strung together above I can’t help but feel like someone’s getting one over on someone else. And while I’m a tried and true capitalist who believes in letting market demand dictate pricing, it’s evident that this pharma pricing strategy may have pushed too far…
What many healthcare professionals have come to realize is that these high prices actually have little to no bearing on the safety, efficacy, or comparative effectiveness of the drug…Talking as a whole, the media coverage on drug pricing is revealing how the system is starting to push back. Companies like Express Scripts are putting their foot down on basic drug pricing and are demanding more information and data regarding the overall cost and safety of drugs.
We also see an emerging trend among payer and provider clients that are now realizing the huge impact that the shadow costs from drug side effects have on their bottom line and patient outcomes, and they too are demanding more transparency in financial and safety drug data in order to make more effective and accurate drug purchasing decisions.
We expect the national debate around drug pricing to intensify and morph to include evaluating drug pricing based on their “fully loaded” costs. After all, it’s we as taxpayers who foot the bill for the bulk of these expenses through the Medicare and Medicaid systems. And we as patients who suffer because we simply can’t afford needed medications anymore.
Brian Overstreet is co-founder and president of AdverseEvents, a California-based healthcare informatics company that improves patient safety and reduces systemic healthcare costs through the comprehensive analysis of postmarketing drug side effect data. This post originally appeared on the company’s RxView blog.
The medical-industrial complex now owns more Congress-creeps than the military-industrial complex. To the same result. American taxpayers pay more and get less for their money than any other citizens in the industrialized West. Money for nothing or less. Subsidizing phony research – or no research – under the blanket description of advancing healthcare.