Maybe $1,000 a pill isn't that expensive...News added by Benefits Pro on March 29, 2016

Benefits Pro

Joined: September 07, 2011

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By Jack Craver

The debate over the cost of prescription drugs rages on, even within the pharmaceutical industry.

A recent op-ed in Forbes by John LaMattina, a pharmaceutical analyst, about GlaxoKlineSmith CEO Andrew Witty demonstrates the differences of opinion about trends in drug prices.

Witty, who will be leaving his post early next year, has gained attention for saying publicly that the upward trend in the cost of major medicine was “unsustainable.”

As a result, he has oriented his company away from medications aimed at treating serious diseases and toward over-the-counter products, such as nicotine patches. In doing so, the company is forfeiting major growth opportunities by playing it safe.

While some pharma companies hit the jackpot after investing millions or billions of dollars into research and development of drugs that treat cancer, HIV or hepatitis, they also often strike out. A recent example came this week when AstraZeneca announced the results of a clinical trial that showed that its prescription blood thinner, which it was hoping to make billions from, was no better at preventing strokes than aspirin.

With the costs of research and development mounting, Witty has suggested going big may be a fool’s errand.

LaMattina pushes back on that argument, saying that the cost of drugs should not necessarily reflect the cost of the R&D.

“What should matter is whether the drug adds value, whether it is an improvement over existing drugs and/or medical procedures, and whether patients benefit,” he wrote in a column Tuesday.

Some of the drugs that have been bashed the most for being too expensive actually aren’t that costly, argues LaMattina, given their impact. He cites the highly-effective hepatitis C medication, Sovaldi, which costs $1,000 a pill and has eaten up huge chunks of state Medicaid budgets.

“(I)t cures the disease in twelve weeks and in doing so saves live and avoids the downstream complications of liver cancer and the need for liver transplants,” he explained.

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