This perspective was first shared in our Weekly View e-newsletter, which summarizes the week’s most significant drug pricing news. To subscribe, click here.
Everyday, newspapers around the country publish dozens of op-eds about drug pricing, and nearly all of these are chock-full of the same tired talking points from either the pharmaceutical or insurance industry. But every once in a while, an expert with a unique perspective pens a column on drug pricing that diverges from the talking points and reveals a resonating truth that should probably be required reading for any policymaker. This week we had the good fortune to read two of these truly insightful editorials, each from individuals who — in very different ways — couldn’t be more invested in the topic.
Writing in the Los Angeles Times, Peter Ubel, a physician and behavioral scientist at Duke University, describes his wife’s heart-wrenching battle with breast cancer, as well as his struggle to justify the pricing of chemotherapy that may only provide a limited benefit:
- “How can we demand fairer prices — prices that reflect a medication’s actual value? Currently, when new drugs, devices or procedures come to market, Medicare coverage is based solely on a determination of benefit — does the new intervention help patients more than it harms them — without any regard to whether those benefits accrue at a reasonable price… I view my wife’s life as priceless. But her chemotherapy drugs are too expensive. Congress or private insurers should pursue legislation that requires healthcare prices to reflect health benefits. It’s the only way our loved ones can get the healthcare they deserve at a price we can afford.”
And writing in Forbes from a very different perspective is Bruce Booth, partner at the biotech VC firm Atlas Venture. With a nod toward George Merck’s famous declaration that “medicine is for the patient, not for the profits,” Booth recommends a few areas of meaningful pricing reform that won’t scare away future investment into pharmaceutical R&D:
- “Pricing ‘what the market will bear’ isn’t a viable long-term strategy in a three-tiered demand system (i.e., where the user of the product is different from the decider of product choice who is different from the payor). Instead, Pharma needs to justify much more explicitly the pricing assumptions made using value-based principles: what’s the value of the drug to the patient, caregivers, healthcare system, and society. By definition that’s hard and somewhat subjective to measure, but we need to communicate more clearly on these value aspects. The industry also needs to support objective metrics for doing health technology assessments of cost-effectiveness. Good drugs can easily justify their prices. For example, the original ICER cost effectiveness assessment of SMA gene therapy Zolgensma, the world’s most expensive drug, said it was within the ‘upper bounds’of the cost effectiveness framework… Public-private engagement to work with groups like ICER feels like a positive step forward.”
The patient/physician perspective offered by Dr. Ubel argues for greater drug affordability, and the biotech perspective offered by Dr. Booth argues for stronger financial incentives for continued pharmaceutical investment. But both perspectives circle back to the same argument that the best path forward is to align a drug’s price with its benefit for patients. And on that, we can agree.