An Innovation-Centric Approach to Pricing and Accessibility
July 07, 201612:44 pm
“Policy should not lose sight of the fact that new treatments represent miracles to many patients, and should encourage more, not less innovation.”
With those words in her op-ed in the Wall Street Journal, Susan DeVore, president and CEO of Premier, Inc. and chair of the Healthcare Leadership Council, gets right to the heart – or what should be the heart – of the national debate over pharmaceutical pricing. With so many new lifesaving therapies in various stages of development and clinical testing, how do we make these medicines accessible to patients and consumers while encouraging even more beneficial innovation?
Ms. DeVore answers that question with one word – competition. As she accurately points out, new breakthrough drugs like the cure for Hepatitis C often enter the marketplace with extremely high prices, but those costs drop considerably when competing products are made available. Thus, one important answer to the drug pricing issue is to speed the process by which new drugs and medical technologies are approved for the market. The Healthcare Leadership Council has made several recommendations in this area.
The answer is most certainly not to be found in the form of government price controls. As Ms. DeVore writes, “The reality is that government negotiation will translate into price controls. I have limited faith in the government’s ability to set pricing better than the market, or keep pace with innovation. Their solution will invariably set prices too low, creating a chill on research and discovery as talent and capital leaves the sector to seek a better return elsewhere.”
The Premier CEO is absolutely right. We can do better than a pharmaceutical pricing debate that, up to now, has been largely binary – either price controls or not. We need to discuss mechanisms and policies that will bring more innovative products to the market and, in so doing, strengthen accessibility and affordability.
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