The Covenant Between BioPharma Companies and Their Customers

Outrageous drug price increases have been a hot-button news story for most of the year. Even those who work in the industry know that drug pricing is incredibly complicated, tied to all sorts of group discounts, bundles, and a system of rebates (which are themselves tied to market share of the drug) that benefits both drug companies and pharmacy benefit managers. What was once explained by industry wags as the unfortunate actions of just a few exploitative bad actors (e.g. Turing and Valeant) has continued to expand to more firms. Generic drug maker Mylan (seller of the EpiPen) and Taro Pharmaceuticals have now been caught up in the contretemps, as has newcomer Novum Pharma. Venture capitalist Bruce Booth wrote a nicely detailed commentary comparing “innovator” vs. “exploiter” companies, but I’m not so sure that it’s easy to quickly distinguish one from the other. Many of the companies categorized as innovators (meaning they actually do R&D, and generate new products that meet unmet medical needs), are also responsible for some of these outrageous price hikes. These include companies that make drugs for multiple sclerosis and those who peddle high priced insulins.
Read More…

Drug Pricing: Lack of Transparency and Trust Compound the Problem

The latest attack on drug industry pricing has calmed down a little now, although the subject is sure to reignite as the 2016 Presidential election race heats up. Hillary Clinton, despite being the leading recipient of campaign contributions from drug industry insiders, recently issued a call to regulate drug pricing (and Bernie Sanders has actually co-sponsored new drug pricing legislation). These calls elicited the expected responses from PhRMA and BIO, with both trade organizations suggesting that such a move would restrict patient access and inhibit the development of new medicines. Read More…