Drug pricing remains key issue for Pharma in 2019

25 January 2019

A recent Global Data poll has suggested that more than half (51%) of industry respondents think that pricing will have the greatest negative impact on the sector this year. Nevertheless, more than a dozen companies have increased prices on around 150 medicines, according to a Reuters report.

The number of price increases is down from 400 a year ago, according to data from Rx Savings Solutions. However, these fly in the face of pressure from US president Donald Trump to forego price hikes as part of efforts to lower the overall cost of medicines.

The average price increase this year was about 6.3% and includes branded as well as generic drugs, according to GlobalData. The report notes that “both democrats and republicans have reacted strongly to these latest increases and it could be an opportunity for bipartisanship to bring the cost of prescription drugs down.”

The findings are borne out by another poll by Politico/Harvard poll, which found that the majority of lawmakers across both parties believe lowering drug prices should be the top priority for Congress this year. With 90% of democrats and 82% of republicans claiming this action is “extremely important.”

A major aspect of Trump’s plan for price reductions is a proposal to tie reimbursement rates for physician-administered drugs under Medicare Part B to lower rates in other countries. This intention had generated thousands comments by the end of the consultation period on 31 December, many of which rejected his ‘socialist’ price controls.

The move is also being resisted fiercely by industry bodies including PhRMA, which stated that it would “lead to significant barriers and delays in patient access to clinically important treatments” and “chill continued biopharmaceutical progress at a time of significant scientific promise”.

The organisation points out that almost 90% of all medicines launched since 2011 are available in the US, compared to just 48% across the 14 countries proposed as reference markets in the plan. In addition, PhRMA stated that patients also have to wait on average 16 months longer in these countries for new drugs than in the US.

“Companies will need to adopt more flexible pricing strategies to maximise return on investment and negotiate earlier with payers – as early as phase 2,” says GlobalData. “Conversations with payers will also be a lot tougher and go beyond price to demonstration of value to specific patient sub-populations.”



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