Following on from NDG’s post on the cost of therapy.This is interesting.
The outgoing corporates have sort of come clean about the costs of MS drugs. Perhaps they forgot to mention the saying Fill your own boots with cash even if you do a rubbish job. It’s like a petrol station. Get it fill up and get out of there quickly. What’s your view?
November 25, 2019Qualitative study on the price of drugs for multiple sclerosisGaming the systemDaniel M. Hartung, Lindsey Alley, Kirbee A. Johnston, Dennis N. BourdetteNeuology DOI: https://doi.org/10.1212/WNL.0000000000008653
Objective To describe pricing decisions, justifications, and attitudes among current and former biotech industry executives for companies that manufacture multiple sclerosis disease-modifying therapies.
Methods Four leaders in biotech who have been directly involved in multiple sclerosis disease-modifying therapy pricing or marketing volunteered to participate in 30-minute semistructured interviews conducted via telephone. An expert in qualitative methods moderated and analyzed the interviews alongside the principal investigator. Brief, preinterview online surveys were also administered to provide additional context and insight for discussion. Interviews were audio-recorded and professionally transcribed.
Results Participants consistently stated that initial price decisions were dictated by the price of existing competitors in the market. Revenue maximization and corporate growth were drivers of price escalations in the absence of continued market penetration. Lower revenue predictions outside the United States also informed pricing strategies. The growing complexity and clout of drug distribution and supply channels were also cited as contributing factors. Although decisions to raise prices were motivated by the need to attract investment for future innovation, recouping drug-specific research and development costs as a justification was not strongly endorsed as having a significant influence on pricing decisions.
Conclusions Contrary to prevailing narratives that underscore drug development costs, findings from our interviews suggest that the existing price ecosystem, overall corporate growth, international pricing disparities, and supply chain–related distortions may play a more central role in drug pricing decision.