Game’s Up, Pharma: The New Drug Pricing Dynamics
Hepatitis C drugs may have provided the spark, but cost-pressured payors, empowered consumers, and at-risk providers are adding fuel to the drug pricing fire. The game may be up for pharma firms that try to push prices out of line with perceived value, potential patient volumes, and affordability.
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The current unit-based pricing model for drugs is too one-dimensional for the market's present needs. Pharma firms must identify products that will benefit from innovative pricing models, and then forge the types of collaborations that will support those models.
Dutch and Belgian health agencies will undertake a pilot project next year on jointly negotiating prices with pharma companies.
Sanofi’s recent reduction of the Zaltrap price after the Memorial Sloan-Kettering Cancer Center said it would not provide the drug to its advanced colorectal cancer patients due to its high cost relative to Avastin highlights the role cost and available clinical evidence will have as payers make value-based purchasing decisions.