Monday, January 12, 2015

Changes in big pharma

I guess this week there is some sort of conference in San Francisco for big pharma so there is new news (instead of just rehashed old news). The industry is now facing a problem.

"“...Pricing pressures are very real. Our health care delivery system can’t afford to spend hundreds of millions of dollars to extend life for a few weeks or a few months.”

The challenge for drug makers, which have long operated on the assumption they could charge whatever the market would bear, will be to produce cures and breakthroughs in medicine that can save money for insurers and government payers by keeping patients healthy.

“What we have to do is to get the focus on the value of our drugs for patients rather than the cost...”"

What a novel idea. And

"“More and more, companies are factoring in the economics of a therapy,” said Terry McGuire, founding partner of Polaris Partners, a Boston venture capital firm that bankrolls startups. “Just a few years ago there was a feeling that if we produced a medicine, people would pay for it. Now we have to figure out the likely reimbursement and build a strategy around it.”"

Even better.  Historically the pharma companies claimed that their big prices were due to the high costs of developing new drugs and that only a small percentage made it through to actual production. But perhaps they are finally realizing that this is not a sustainable business proposition and they are taking a page out of any other manufacturer's rule book - if you can't make money on it, don't sell it.

More good news is that the new industry trend is to create drugs that provide real breakthroughs instead of merely extending life a few weeks or months. For me this has long been a big issue. New treatments would be created which would cost hundreds of thousands of dollars and the patients would only be around long enough to feel the bite on their wallet but not enjoy much more time alive.

Change could and should provide better and more affordable options for patients.

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