How Can We Address the Global Crisis of High-Priced Prescription Drugs?

Jackie Syrop

Drug prices in several disease areas outpace other healthcare expenditures and result in inadequate availability of essential medicines globally, according to a recently published review.

The cost of the cancer drug Gleevec tripled after the FDA approved a new indication, the $1000-per-pill hepatitis C virus (HCV) treatment Sovaldi accounted for 64% of US HCV-related spending in 2014, and the cost of the 60-year-old drug Daraprim went from $13.50 per pill to $750 per pill after Turing Pharmaceuticals acquired its distribution license. Reports like these led to hearings in the US Congress examining the pricing practices of pharmaceutical companies. In the United Kingdom, costly cancer immunotherapies faced rejection for National Health Service coverage reimbursement, and the German government is planning to curb pharmaceutical companies’ right to set launch prices. The sharply rising prices of prescription medications even became an issue in the 2016 US presidential election.

Drug prices in several disease areas outpace other healthcare expenditures and result in inadequate availability of essential medicines globally, according to a review by Toon van der Gronde, PharmD, and colleagues in a recent issue of PLOS One. They note that high prices for medicines, however innovative, are untenable and often beyond the ability of individuals, health insurance companies, or even governments in high-income countries to pay. Health systems therefore face a challenge in striking a balance between rewarding investments in innovation, achieving reasonable drug prices, and securing equitable access to medicines—a challenge that demands new policies to prevent a continued drug pricing spiral, van der Gronde and colleagues conclude.

The investigators searched PubMed for peer-reviewed English-language scientific articles on drugs and cost as well as reputable news outlets such as the Financial Times, The New York Times, the Wall Street Journal, and The Guardian for articles concerning the pricing of medicines between January 2014 and January 2017. Their review first examines the concepts of drug life-cycle dynamics, government interventions aimed at reducing drug prices, and the consequences of those interventions, and then suggests alternative policy measures to reduce drug prices and improve access to innovative and essential medications.

Van der Gronde and colleagues argue that fertile ground for high-priced drugs was created by several factors:

  • Changes in drug life-cycle dynamics (shortening drug life cycles and more difficulty achieving high, sustainable sales volumes in last 2 decades than previously)
  • The unintended consequences of both patent law and measures to stimulate drug safety
  • Orphan drug programs
  • The many national and international government policy measures that had the unintended consequence of making high drug prices a more intractable problem

Van der Gronde and colleagues recommend the following steps to reduce drug prices:

  • Make access to medicines central to any policy intervention discussion
  • The fastest, most effective, and most reviewed options to regulate the pharmaceutical market are outcome-based pricing, internal and external reference pricing (a health benefit in which plans pay a fixed amount or limits contributions toward the cost of a service, and health plan members pay the difference if a more costly provider or service is selected), and incentivizing physicians and pharmacists to prescribe low-cost medications
  • Enact patent reform legislation, perhaps having all drug research paid for with public money. Academic institutions already perform a significant portion of new drug development, but currently lack the funds, capacity, and incentives to develop a drug without support. Public-private financing partnerships, with agreements on the drug availability and product price, seem most promising, as observed with the developing of the malaria vaccine Mosquirix. Such partnerships could also stimulate commercially unattractive, but essential, therapies as new antibiotics
  • Encourage transnational cooperation through the European Union, African Union, World Bank, and World Health Organization (WHO) to help reduce drug prices with increased bargaining power
  • Encourage a global framework for cooperation among drug regulatory authorities such as the FDA and European Medicines Agency to increase and amplify benefits by reinforcing existing WHO frameworks already helping to reduce drug prices via the Essential Medicines list