Fierce Pharma reports that Valeant's recent US price hikes which garnered negative publicity for two medicines are not isolated. "The company has jacked up prices on 54 other meds this year alone by an industry-leading average of 65.6%, according to a Deutsche Bank analysis" according to Fierce Pharma's bulletin for October 5th. It goes on to opine that last year Valent "hiked the prices on 62 drugs--by 50%, on average." Little wonder that Hilary Clinton drove the US biotech index into a nosedive last week with comments on her plans to increase price scrutiny and pricing practices should she become President.
The free pricing market model for drugs as practiced in the US is unique at least in comparison to other major markets. Whereas managed care in Europe has mandated infrastructure and hurdles to assess comparative cost-effectiveness and utility, the US enjoys the opportunity of "direct to consumer advertising" and free pricing. Thus it achieves prices and volumes which are eye watering by European standards. How long this will go on for is anyone's guess, but in the main profitable markets drive increased competition and reduced prices over time.
The US is spending more per capita on healthcare than any other advanced nation of scale - almost twice as much as most peer countries. This is not sustainable into the future as population ageing, technology adoption and demand led consumption continues to grow. What is clear however, is that innovation in medicines or clinical practice which lowers costs or improves outcomes for the same cost, will continue to see impressive support.
So every company should focus on technology that makes a real difference. Pricing freedom when abused eventually drives customers to find alternate suppliers or impels governments to create rules which encumber and slow future development and adoption.
For those who fear Hilary Clinton, she has form. Most of us recall her failed intervention into US healthcare as first lady. She undoubtedly learned a lot from the bruises she suffered then. As President, she would carry much more weight and of course if elected, would inherit the infrastructure of Obama's affordable care act. Few Democrats would not expect to drive home the advantage of power with policies deeply repugnant to Republicans, but which impartial observers feel have been beneficial to most Americans.
All of that assumes of course that "the Donald" does not come through GOP selection and challenge for the Presidency. Here is a man who thinks big. Were "the Donald" to become commander in chief, big Pharma would have a sympathetic ear to free pricing and market based healthcare. What he might think of manufacturing plants in China and Mexico is another matter entirely. However with "the Donald" one never truly knows. Much like the pricing mechanism of some Pharma giants, its tricky to pin down and explain.