Stakeholders Weigh-In on Excessive Drug Costs

Recent controversy over the cost of Sovaldi (Gilead Sciences)—a $1000-per-dose treatment for hepatitis C—has sparked a debate as to whether there should be federal caps on the costs of certain prescription drugs. Rising costs for specialty medications such as Sovaldi keeps certain patients from receiving life-saving treatments.

“The Sovaldi example has brought us to a crossroads,” said Karen Ignagni, president and CEO of America's Health Insurance Plans. “We need to sit together to begin talking about how we can attack this problem together before the government has to. We cannot sustain 6-figure therapies and we're at the beginning of that trend.”

Insurers and public health officials alike have voiced concern over not only the financial burden of drugs like Solvaldi, but the moral and ethical issues that arise when deciding which patients are entitled to have it. As well, Medicare and Medicaid programs are likely going to feel additional financial strain as the baby boomer generation becomes eligible for benefits.

“Manufacturers are charging whatever they can get away with,” Ms Ignagni said. “We can’t have a system that operates that way. We can’t sustain it. It will go back to blowing up family budgets and blowing up Part D and blowing up the federal government … it’s a vicious circle here.”

Many drug manufacturers maintain that developing innovative drugs is costly and can take years. John Castellani, president and CEO of Pharmaceutical Research and Manufacturers of America, said that the average prescription medication costs $1.2 billion to develop, and can take 10 to 12 years before it gets through FDA approvals for market distribution.

Sara Radcliffe, executive vice president for health at the Biotechnology Industry Organization, said that drugs like Sovaldi can actually reduce costs by eliminating the need for more costly procedures down the road. It may be harder to convince others that the pricing is justified.

“It’s a huge discussion in our industry,” Ms Radcliffe said. “How do we create the products that those on the reimbursement side are going to pay for?”

Ms Ignagni suggested that further discussions over the future of innovative pharmaceuticals will be needed among stakeholders.

Around the Web

Excessive Drug Costs Could Invite Price Caps: AHIP's Ignagni [Modern Healthcare]