Just three months ago I wrote two articles about the attention being paid to the skyrocketing costs of generics. Now, it seems, that outrage has been displaced by concerns over the high cost of specialty drugs that treat Hepatitis C, HIV, and Cancer.
Proposed Budget Seeks Authority for Medicare to Negotiate Lower Prices
It’s one thing when the media, Congress, and the Justice Department start discuss a national problem such as high drug prices. The volume goes up considerably when the President gets involved.
President Obama’s recently introduced budget calls for giving Medicare the authority to negotiate lower prices for specialty drugs that require high co-payments on behalf of its beneficiaries. The Veterans Affairs Department and Medicaid already do that, but Congress specifically denied that authority to HHS when they created the Medicare prescription program.
As could be expected, drug makers do not want to have to negotiate with HHS. Some go as far as to suggest that this is a way of thanking the insurance companies for being strong advocates of Obamacare when the Affordable Care Act was introduced and made its way through Congress.
Hepatits C Drugmaker in the Crosshairs
Among all drug manufacturers, one in particular is the poster child for high prices. Their Hepatitis C drugs have produced cure rates of more than 94% among the 140,000 Americans treated so far. But until recently, the cost of a 12-week treatment was $94,500.
While it is not unusual for a specialty drug to be very expensive, the very thing that classifies it as a specialty drug is that it serves a fairly small population. That is not the case with Hepatitis C drugs, as there are more than 3 million Americans who have been diagnosed with Hepatitis C.
Now, new competition has brought the price down approximately 50% and caused a share price drop of 9% last week alone. This after profits had tripled to $13.3 billion in 2014. But even at the reduced price, cost of each dose is close to $500.
To fight back against price attacks, the company has gone on the offensive.
Earlier this week, at the BIO CEO & Investor Conference in New York, the drugmaker’s president and COO asked attendees, “Is it more valuable to extend a cancer patient’s life by a few months or years, or to cure someone of hepatitis C and allow him or her to return as a productive member of society?”
He seems to be suggesting that drugs should be priced by the value they provide rather than a cost-plus basis. At a time when every nation in the world, including the United States, is pushing for better outcomes at lower costs, this argument may ring hollow for a lot of people.
Read more on FT.com (Financial Times) and xconomy.
Competition is Still King
While budgetary action would enable HHS to negotiate lower Medicare prices for the entire Specialty Drugs category, it was competition that forced the Hepatitis C drug maker to cut the price in half.
And it is competition that will drive down the cost of generics, too.
For independent pharmacies like yours, no one produces more competition for your business than TRxADE. You may not see savings of 50%, but you certainly will be able to reduce your inventory costs substantially with savings on 10% to 20% of your monthly purchases.
Come See Us in Orlando
TRxADE is proud to be a sponsor of the PDS Independent Pharmacy Growth Conference, February 18-21, and we will be present and hoping to meet you at Booth #54.