TRUTH ABOUT THE HIGH RATE OF PRESCRIPTION DRUGS
The amount for the prescription of drugs this days has been alarming.
As CEO of one of the world’s largest pharmaceutical companies, I believe that we need a new perspective on drug pricing: As an industry, we must shift to a model that focuses on value and outcomes delivered, both to patients and to health systems.
For the past several years, Novartis has been working on a number of different pricing models that aim to deliver value to patients and the healthcare system. We have set up pay-for-outcomes agreements with a number of major U.S. health insurance companies for some of our products. Through these agreements, the insurers will evaluate outcomes for patients treated with our medicines. We will reduce the price to payers if our medicines don’t work the way we think they will. We have set up such agreements for our heart failure drug Entresto, our relapsing multiple sclerosis medicine Gilenya and for Tasigna, which treats a certain type of leukemia.
The bottom line: We believe in the efficacy of our products, and by collaborating with payers on solutions for reimbursement, we hope to help start a shift toward value pricing in the healthcare system. We want to be rewarded for the tangible outcomes our products provide patients, not for simply selling pills.
However, we need a system where all players involved are incentivized to provide better care, more effective medicines and, in the end, better outcomes. All parties who play a role in delivering care, from hospitals to community care to mental health, need to be rewarded based on what improvement to a patient’s health outcome they deliver. This includes the pharmaceutical industry. Drug prices need to be backed by real-world data on this, and we could benefit from greater regulatory guidance on the use of such data.
To that end, I would like to suggest that the key problem here comes down to defining a single word: “value.” Because the lack of agreement on what is worth paying for is holding us back.