Why “we’re helping patients” doesn’t justify high drug prices

KEY TAKEAWAY:  Pharma companies continually use the excuse of “helping patients” or “prolonging life” to justify high drug prices, but that talking point isn’t relevant anymore in an era of total transparency.  

If you work in pharma and think that high drug prices are justified you’re lying to yourself.  While it’s true that only 10% of every health care dollar goes to prescription drugs that fact means’ little to people who struggle to afford expensive drugs.

In a recent ASCO survey participants were asked to identify the top threats to future cancer program growth, 68% of survey respondents selected cost of drugs and/or new treatment modalities as the number 1 threat.

Take for example CAR-T therapy.  The total  treatment package can easily exceed a half-million dollars, and some estimate it might add up to $750,000 or more. At this rate, if all the patients who might be helped by the new $373,000 drug got it, the national cost could be $5.6 billion — more than the entire health budgets of many nations. And that’s for only about 7,500 patients.

The cost of health care has risen much faster than inflation alone can explain. Healthcare spending in 2007 came to $7,700 per person in the U.S., and by 2015 that number had risen 29% to $9,990 per person. The Centers for Medicare and Medicaid Services project that health spending will continue to increase at an average rate of 5.6% per year for the next 10 years. How can the average American afford to spend that much on health care?

But they work

It is uncertain whether drugs approved by the US Food and Drug Administration (FDA) have clinically meaningful benefit as determined by validated scales such as the European Society for Medical Oncology Magnitude of Clinical Benefit Scale (ESMO-MCBS). But according to the Journal of the National Cancer Institute “The number of trials meeting the ESMO-MCBS threshold for clinical benefit has improved over time. However, fewer than half of RCTs supporting FDA approval meet the threshold for clinically meaningful benefit”.


Then there is the 340B program which is meant to help people who can’t afford expensive prescription drugs. PhRMA recently said “even as the number of Americans with insurance is on the rise, 340B is growing exponentially. While clinics that receive government grants largely use the program to improve access to medicines for needy patients, not all 340B hospitals are good stewards of the program”. In other words, they want to limit 340B drug allocations.

The talking point of the “benefit we provide to patients” is null and void if there are too many people who can’t afford the medications. Sure, drug companies say “if you need help” in DTC commercials, but that process is long and cumbersome and fails to take into account the devastation that high drug prices could cost families.  Employees who walk around campus collecting fat paychecks while patients are left to fend for themselves is indicative that there is a clear problem within our industry.  We need more pirates and rebels within pharma who can innovate the way we price and market drugs.

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