Drugmakers and Insurers Attempt to Collaborate on Medication Prices

medsAn increasing number of drugmakers, including Biogen Inc., Amgen Inc., and Sanofi are taking a proactive marketing approach–talking with insurers about costly medications still under development. With the price of these medications reaching into the six figures, drugmakers are hoping to convince insurers to pay for future therapies by reaching out beforehand.

This trend is a result of the Gilead Sciences, Inc.’s experience In December 2013 when the media reported that its hepatitis C treatment Solvadi would cost $84,000 (or $1,000 per pill). House Democrats reacted and in the end the largest manager of drug benefits in the U.S. backed a rival drug with a lesser price tag.

We asked Zintro experts in the industry what they thought about the situation.

Amr Bannis is the President and CEO of a progressive high technology corporation. In 1999 he developed the first Canadian Online Pharmacy and has since been closely connected to the pricing policies of big pharma.

“In the last couple of years all blockbuster medications lost their patents and big pharma consequently lost their huge margin. But to be fair, the past drugs were maintenance drugs taken for the rest of patients’ lives–so although their unit prices were low in comparison, their present value was very high. Now big pharma needs to replace their cash cow, jumping on biologics and specialty drugs and pricing them based on their value rather than their cost plus. Looking closely, the present value of some pricey gene therapies and specialty drugs may be less costly than the previous generation of blockbuster drugs of the past 20 years.”

Harold M. Silverman, Pharm,D. is a pharmacist with extensive hospital pharmacy experience. He is also the author of several consumer health books including “The Pill Book.” With 15 editions and more than 17 million copies in print, it is the most widely sold consumer reference on prescription medications.

“Prescription drug pricing and availability have been political footballs for decades, beginning with hearings held by the Senate Committee on Aging in the eighties, through today’s congressional concerns over the cost of generic pharmaceuticals, the promotion of biosimilars expressly designed to create competitively priced alternatives, to widely prescribed biologic medicines, and the push by patient groups to make high-cost orphan and other drugs designed to treat relatively rare diseases available to patients who see them as lifesaving interventions even though they may not be and also carry significant risks. It is extremely important for companies with products which fit this description to take every possible step to have their products included on the formularies of as many health insurers as possible, especially Medicare and Medicaid, the nation’s largest providers of health insurance services.”

Drugmakers continue to negotiate with insurers as they await FDA approval for the next wave of medications. Bloomberg.com reports that the collaborative approach appears to be working.

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