ICYMI: Peter Pitts Weighs in on Drug Price Debate

ICYMI: Peter Pitts Weighs in on Drug Price Debate

This week in the Sacramento Bee, Peter J. Pitts, a former U.S. Food and Drug Administration associate commissioner and now president of the Center for Medicine in the Public Interest, wrote an op-ed regarding the ongoing drug pricing debate titled “Rising Drug Prices The Fault Of Insurers, Not Drug Companies.” Pitts lists two essential factors that are often overlooked in this discussion:

First, the very real financial pain many Americans feel at the pharmacy counter is the fault of insurers – not drug companies. Second, the obsessive focus on cost obscures the vastly higher value of new drugs.

When you’re picking up your prescription, you are not paying a co-pay determined by the drug’s manufacturer; rather the co-pay is determined by your insurance company – many of which have been steadily increasing cost-sharing requirements for years. Additionally, Pitts points out that even though the pharmaceutical industry spends five times more on R&D than aerospace, much of this money funds treatments that will never be FDA-approved due to the industry’s high failure rate.

The insurance industry has managed to pull the wool over Americans’ eyes and convince them that drug prices aren’t tied to the pharmaceutical industry’s investments in research and development. That’s intuitively and factually wrong.

Even so, advances are still being made in pharmaceuticals and new treatments are not only saving lives, but also preventing costly complications as a result of untreated diseases. Using recent treatment advance in hepatitis C as an example, Pitts demonstrates how drug companies don’t have “infinite pricing power.” When the first two effective hepatitis C treatments hit the market, others were quick to follow. As a result, there was a pricing war which resulted in a 50 percent discount to insurers – a discount that was largely pocketed by insurers and rather than passed along to patients.

Pitts concludes:

New and better drugs aren’t the problem; they’re the solution to America’s worsening chronic disease burden. Demonizing the creators of these medicines will do nothing to bring down patients’ skyrocketing co-insurance payments and deductibles.

Read the full piece here.

 

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