Don’t Price Drugs on What the Market Used to Bear

August 9, 2011 – 9:52 am | By Mari Serebrov | No comments yet

All those warnings about price pressures and reimbursement woes – they didn’t come from Chicken Little. The sky really could be falling for drugmakers that insist on pricing their products based on what the market used to bear.

Rather than making the same old arguments about the cost of drug development, biopharma needs to understand that today’s market simply can’t bear the prices of yesterday’s bestsellers. Yes, a lot of factors are involved in drug pricing, and a lot of middle men add to the costs here in the U.S. But when it comes finger-pointing time, drugmakers tend to be everyone’s favorite villain. And with our economy crumbling under an ever-growing debt and a government that can’t live within its means, there’s a lot of finger pointing going on.

Some drugmakers don’t help their case by engaging in a game of chicken when it comes to reimbursement. They set hefty prices for drugs and then market them by touting the low out-of-pocket costs for patients. Hello! All that means is the rest of us are picking up a gigantic tab in the form of increased insurance premiums and unsustainable Medicare Part B costs.

If drugmakers don’t want price controls, they’re going to have to look beyond their bottom line to the nation’s bottom line when pricing a new drug or biologic.


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