In a recent post in The Catalyst (“Focus on Prices is Penny Wise and Pound Foolish”), PhRMA President & CEO, John Castellani, seeks to defend the $1,000-a-pill price tag attached to Gilead Sciences’ new breakthrough hepatitis C drug, Sovaldi. It’s an unusual move for the CEO of PhRMA to defend the price of one particular drug and it seems especially unusual given that Gilead doesn’t even appear to be a member of PhRMA. One wonders if PhRMA members are anxious to have Sovaldi define their industry?
He argues, correctly, that drugs often save money for the health care system. We believe that medicines can be one of the best and most cost-effective interventions in health care and, of course, cost-effectiveness can’t be the only lens we apply to new innovation. For example, there are many very expensive drugs for rare diseases that simply can’t be cost-effective, but as a society we understand we have to pay the price for innovation.
The problem that Sovaldi has spotlighted is that some companies are attempting to charge rare-disease prices for medicines that will be used by many, many people. In Sovaldi’s case it will be used by many millions in the U.S. and around the world.
Mr. Castellani attempts to redirect blame for the problem to payers, but the real issue is the total cost to the system. Whether the cost is embedded in government or employer subsidies, premiums, or co-pays, the cost is the cost and the trend for high-priced medicines is on a collision course with reality. Pointing fingers won’t solve the problem.
Mr. Castellani closes his post by calling for a “much broader conversation” on the ways we can create a sustainable health care system that will carry us into the 21stcentury, while also protecting patients and encouraging innovation. As the head of the National Coalition on Health Care (NCHC), a nationwide alliance spanning multiple industries and comprised of over 80 employers, providers, consumer, and public health groups, we recently launched a campaign to encourage such a dialogue.
The Campaign for Sustainable Rx Pricing welcomes the opportunity to discuss this important issue with the pharmaceutical industry. We believe that by focusing on quality, proven results, and the utilization of comparative effectiveness research, our health care system can reap the benefits of advances in not only medicines, but new technologies, medical techniques, and coordinated models of care.