US drug pricing is on the verge of change

MoneyPills

Drug pricing is always a topic for discussion regardless of the country where you live.

The USA have long been considered as the most expensive country when it comes to drugs. Today, several initiatives are trying to contain their price and limit the explosion of healthcare expenditures. It is not easy and several political leaders failed in front of the powerful lobby supporting the pharmaceutical industry.

Maybe, instead of price cuts, we should think of more nuanced version of price control like value-based pricing or risk-sharing agreements.

An extremely interesting article explore the future opportunity of risk-sharing agreements in the USA. It is widely used in Europe as well as in other countries but shows a slow uptake in the USA. The conclusion of the article is positive as there is room for improvement. “Most manufacturers and payers expressed interest in RSAs and see potential value in their use. Due to numerous barriers associated with outcomes-based agreements, stakeholders were more optimistic about financial-based RSAs. In the US private sector, however, there remains considerable interest—improved data systems and shifting incentives (via health reform and accountable care organizations) may generate more action.”

However, despite hot debate launched by Hillary Clinton recently about drug pricing, the US Congress is still dominated by Republicans, who is completely supporting the pharmaceutical industry. Drug pricing and healthcare coverage will be one of the hottest debate question of the US Presidential Elections this fall.

Some articles are much less optimistic as they show that the bargaining power of private payers is far from sufficient to be able to negotiate discounts.

Drug pricing has to change in the USA because affordability and healthcare coverage will define the sales potential of the product. If the drug is so expensive that no one can afford it and no insurance will pay for it, it has no future sales opportunity. It is key to find a good balance between rewarding innovation and R&D efforts AND allowing patients to access the medicine and care they need.

 

Additional resources:

Private Sector Risk-Sharing Agreements in the United States: Trends, Barriers, and Prospects – American Journal of Managed Care – September 2015

It’s Time to Rein in Exorbitant Pharmaceutical Prices – HBR – September 2015

Why we can’t stop US drug companies from charging astronomical prices – Quartz – September 2015

Drug prices: Which companies may be the next targets? – CNBC – September 2015

Rational Drug Pricing – Huffpost Business – September 2015

Why Are Drug Costs So High in the United States? – Medscape – November 2014

High Cancer Drug Prices in the United States: Reasons and Proposed Solutions – ASCO – July 2014

Higher US Branded Drug Prices And Spending Compared To Other Countries May Stem Partly From Quick Uptake Of New Drugs – Health Affairs – April 2013

Pricing and Reimbursement in U.S. Pharmaceutical Markets – NBER – August 2010

 

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