What does it really cost to bring a drug to market? For years, the standard figure has been supplied by researchers at the Tufts Center for the Study of Drug Development: $2.7 billion each, in 2017 dollars. Yet a new study looking at 10 cancer medications, among the most expensive of new drugs, has arrived at a much lower figure: a median cost of $757 million per drug. (Half cost less, and half more.)
As is the case with doctor, hospital and lab bills, the presence of a third-party payer results in higher prices for prescription drugs than would otherwise be the case if a pharmacy dealt directly with the patient. That’s because the third-party payer system severs the direct link between the consumer and the producer of goods and services that allows market forces to work. Doctors, hospitals, labs and pharmacies negotiate with a deeper-pocketed third party, not the consumer, to arrive at a price.
A March 2017 Consumer Reports interview with University of Minnesota professor of pharmacoeconomics Stephen Schondelmeyer summarizes the problem. Pharmacy retail chains are more concerned about what third parties such as insurers will pay, rather than what customers themselves can afford. They focus on setting high list prices to ensure that insurers don’t cut into their bottom line.
Transparency Policies of the European Medicines Agency: Has the Paradigm Shifted? by Daria Kim :: SSRNFebruary 6, 2017
The article reflects on the state of play as regards access to non-summary clinical trial data in the EU. In particular, it examines the scope of access under the recent transparency policies of the European Medicines Agency that attempt to break away from the presumptively confidential treatment of clinical trial data. In light of the emerging case law of the Court of Justice of the European Union on clinical trial data disclosure, it remains highly uncertain what data, and under what conditions, can be lawfully released by the EMA. Under the applicable regulations, the scope of the accessible data depends on the interpretation of commercially confidential information – the notion derived from the exception to the fundamental right of access to documents. Accordingly, the analysis focuses on the application of this exception, taking into account the specifics of clinical data, the context in which disclosure occurs and the interests at stake. The main complexity is found in defining the scope of the relevant and legitimate interests to be balanced when applying the exception. Overall, it is argued that the current regulatory framework does not provide a sufficient legal basis to support the objectives pursued by the EMA’s policies.
The market for pharmaceuticals is not perfect. But competition and public opinion generally ensure that high prices and profits don’t persist for long. The recently enacted 21st Century Cures Act should help by speeding up FDA drug approvals, making competition even more effective.
Biologics, the most effective medications used to treat chronic debilitating autoimmune diseases such as Rheumatoid Arthritis, are also the most expensive, even for those with top shelf insurance. Biosimilars, which replicate biologics through the use of similar living organism extracts, will impact biologics’ American sales — biosimilars are generally much cheaper than biologics. Legal scrutiny in the biologic/biosimilar arena has focused on the Amgen versus Sandoz litigation, market share, and the biosimilar FDA approval process, established through the Biologic Price Competition and Innovation Act. Less coverage has been devoted to state-level battles over biosimilars. States have considered how biosimilars should be named, even though there is FDA guidance on the issue. Many state laws impose patient and physician consent requirements on insurance companies or pharmacists that seek to substitute biosimilars for biologics, even though the FDA does not require any additional action once an interchangeable biosimilar is exchanged for a biologic. This essay will consider whether state laws are impeding biosimilar market access, addressing how the laws have been marketed as “patient-friendly” legislation. Finally, it will propose how to involve patients at the state legislative level so that patient needs are heard and met.
High Prices in the U.S. For Life-Saving Drugs: Collective Bargaining Through Tort Law? by Paul J. Zwier :: SSRNJanuary 25, 2017
Sudden exorbitant price hikes to patients who have long taken life-saving drugs are more and more common in today’s pharmaceutical market. The anxiety caused to patients who have been prescribed these drugs by their doctors is predictable and severe. Even when initially covered by insurance or through government programs, patients and their families can soon be made destitute by the high copays or caps on payments. This Essay argues that those who buy up life-saving drugs and decide to raise their prices, despite their knowledge of the consequences to patients, are committing the torts of intentional infliction of emotional distress and negligent infliction of emotional distress.
Despite challenges presented by class certification law, these patients should be allowed to qualify as a class for purposes of pursuing a price reduction in these drugs. Through class action collective bargaining, courts can avoid the pitfalls of waiting for piecemeal legislation for consumers of individual drugs and still receive the advantages of free market principled pricing through collective bargaining. And, in combination with legislation, patterned on statutes designed to address bad faith insurance practices, the courts can most effectively moderate high pricing and curtail pricing practices that may otherwise soon bankrupt our-healthcare system.
Theory and Methods in Comparative Drug Policy Research: Response to a Review of the Literature by Scott Burris :: SSRNJanuary 21, 2017
Comparative drug policy analysis (CPA) is alive and well, and the emergence of robust alternatives to strict prohibition provides exciting research opportunities. As a multidisciplinary practice, however, CPA faces several methodological challenges. This commentary builds on a recent review of CPA by Ritter and colleagues to argue that the practice is hampered by a hazy definition of policy that leads to confusion in the specification and measurement of the phenomena being studied. This problem is aided and abetted by the all-too-common omission of theory from the conceptualization and presentation of research. Drawing on experience from the field of public health law research, this commentary suggests a distinction between empirical and non-empirical CPA, a simple taxonomic model of CPA policy-making, mapping, implementation and evaluation studies, a narrower definition of and rationale for “policy” research, a clear standard for measuring policy, and an expedient approach (and renewed commitment) to using theory explicitly in a multi-disciplinary practice. Strengthening CPA is crucial for the practice to have the impact on policy that good research can.