Is it Sustainable?

A couple weeks ago we heard about the Indian Supreme Court refusing to grant a patent for Gleevec and how this could potentially impact drug pricing across the globe.  Several months ago a group of NY city physicians, through an editorial in the NY Times, pressured Sanofi into cutting in half the price of one of their most promising new drugs.  This is a very concerning trend that could turn our industry upside down.  And now the trend continues.  Take a look at this most recent piece in the NY Times that seems to take this one step further.

This group of key thought leaders, who are closely connected with the industry in all regions of the world, have declared the cost of some cancer drugs to be, “astronomical, unsustainable and perhaps even immoral.”  Note that this is coming from physicians who have no real stake in the financial issues of drug pricing, except they see how it impacts the lives of their patients.  The industry will not survive without the support of physicians who do our research, teach other physicians about our products and most importantly control the prescribing authority to use the products.  Keep in mind they are talking about great drugs, not “me too” products that offer minimal if any value beyond generics in their particular markets.

Perhaps what is most concerning is that these physicians are banding together in order to make a statement.  They recognize, that due to the limited number of providers in certain markets, that they have the ability to provide considerable pressure on the industry.  I am not sure this will actually lead to boycotts or situations where their patients’ outcomes are compromised, but I do think they could severely limit the use of particular drugs.  There is a huge difference when providers are looking for ways to utilize a product rather than looking for alternatives where they can avoid using it.  The gap between these two may actually be what makes the industry unsustainable without major change in the way drugs are priced.

Setting the price for drugs is a delicate balancing act.  The trends currently seen are a concern well beyond the hematology/oncology community.  The “price it high” and rebate back model does not seem to be helping anyone but the middle folks in the financial scheme.  The runaway use of co-pay cards is a tactic that has a high level of vulnerability and yet they seem to be the scheme of the day to help beat the system.  But in reality is it really working?  What happened to the big launches and what happened to the blockbusters?  The industry does seem to to be dancing around the issue of sustainability.  Are our pricing practices quick fixes or a solid foundation for the coming decades?

It is a huge concern when key customers and opinion leaders question the morality of the way business is being done.  This goes well beyond strategy and tactics.  Morality must be a given for survival.  Our industry only survives when providers, payers and patients trust what we do.  This trust must be earned every day and when our morality is questioned it really is a game changer.  Perhaps it is time that the industry faces reality before this gets even uglier.

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