Healthcare provision, at least in the Western world, is in a permanent state of turmoil, as costs rise inexorably and politicians search for ways to cut spending without angering voters.
But why do costs keep on rising so steeply?
High priced drugs often get the blame. After all, every time new medicines come on line that treat something that was previously untreatable that can only ratchet costs up (albeit taking the health of the population to new levels). The spotlight has been firmly on this upward cost pressure with the launch of orphan drugs Gattex™ and Kalydeco™, with price tags around $300,000 per year for each patient.
But drug prices do not always rise. As atorvastatin became generic at the end of 2011, a $10billion per annum market for Pfizer’s Lipitor™ (the only available source of atorvastatin during the period of market exclusivity) almost disappeared overnight – translating virtually directly into savings for healthcare providers.
So why do these competing trends always seem to result in rising drug bills? Are the high-priced drugs really to blame?
Only by tackling the REAL scandal in drug pricing – the unearned premium – do we stand any chance of stemming the haemorraging healthcare budget
DrugBaron examines the real reason why drug prices remain stubbornly high, despite a decade of relatively poor productivity in pharmaceutical R&D. The focus should be on prices paid for high-volume proprietary drugs that offer little incremental value over generics, or – most scandalous of all – in replacing branded drugs with generic equivalents wherever the opportunity exists.
Paying a premium for something that’s scarcely superior (or even identical) – what DrugBaron calls the “unearned premium” – is the REAL scandal in the drugs bill, and not the high, but justifiable, prices for drugs like Kalydeco™. Politicians, driven on by a baying public, need to be careful not to jump on the bandwagon and cut the highest prices, threatening to once again ‘orphan’ those with rare diseases, while leaving untackled the real flaws in the system.
RxCelerate Ltd is an outsourced drug development platform based near Cambridge, UK. We specialize in delivering an entire road map of drug development services from discovery and medicinal chemistry through to formal preclinical development and clinical up to Phase IIa. In the last five years, we have witnessed dramatic changes in the drug development …