Who’s to blame for America’s drug pricing crisis?
It’s election year, and a prominent jewel in America’s economic crown—its pharma industry—is a front-and-center attraction.
Only, it’s less of a jewel, more of a piñata, with both of the major political parties competing to hit it the hardest, while patients and voters cheer on the sidelines.
For all the political theatrics, it’s clear that turning the life sciences sector and drug pricing into a political plaything does the nation no favors. It only exacerbates the challenge of making healthcare accessible. To genuinely address this issue, a radical shift in our approach is necessary. Currently, our discourse lacks the framework to foster innovative thinking, a mindset scarcely rewarded within our industry. This is the crux of the matter for those of us committed to overcoming this obstacle.
Thankfully, we are not without recourse. By creating environments conducive to novel ideas, we can initiate change. A new event designed to encourage more lateral thinking in our industry aims to do just that. Read on to find out more.
Guilty parties
It’s not hard to see why pharma is often blamed for access problems: we control the list price and hold the power to withhold or distribute our products. But while we’re far from innocent, we’re not entirely culpable.
Americans know that pharma is just one part of a sprawling healthcare system that is packed with complexity and often competing priorities. Of course we want to develop life-saving medicines. Of course we want patients to have access to them. But the obstacles are many, and most of the solutions posited by lawmakers and policymakers don’t account for the subtleties that characterize the system, nor for the unforeseen problems that are generated by trying to solve the whole issue by focussing on one area.
This isn’t about deflecting blame towards the myriad other villains entangled in the convoluted US drug-pricing maze. Instead, it’s about accurately identifying the problem. Only with this clarity can we begin to devise a fitting solution.
A wicked ecosystem
In his book New Drugs Fair Prices, Professor Brian Smith argues the notion of drug affordability is a ‘wicked problem’. Conventional problems can be addressed by scientific solutions; wicked problems have characteristics that are set up so that experimentation is impossible and those who attempt to solve them by conventional means are often punished for their efforts.
Even a cursory look at attempts so far show that those who’ve attempted to solve it (including various expensive attempts by big tech) have been punished severely. US health accessibility problems are truly ugly and exceptionally wicked.
It’s tempting to consider the healthcare system as a simple machine that works by turning levers. When one lever is pulled, the machine adjusts and the problem is solved. The Biden Administration’s infamous and flawed Inflation Reduction Act (IRA) considers the healthcare industry in this way.
The trouble is that no healthcare solution exists in isolation. Plenty of pharma leaders and VCs have argued powerfully that this action is very myopic, stunting the next generation of crucial medicines and resulting in deprioritization of drugs for the elderly.
From a pharma perspective, it’s easy, and perhaps even convenient, to blame lawmakers, or PBMs, for strangling innovation and bolstering prices. But this is to miss the point. The main problem is that healthcare isn’t a machine at all. Rather, it’s an ecosystem. Professor Smith points out that this isn’t just metaphorical, but literal. It is a complex, interconnected network. This network exists as part of a wider ‘complex adaptive system’ and it is within this system that innovation and innovative solutions live and die.
Once we have understood this, our challenge takes on a completely different nature. Where it is tempting to criticize leaders for pulling the wrong levers at the wrong time, we see that these reactions are never going to result in a better outcome for patients. We must treat healthcare as a different type of problem that must be approached in a different manner.
The curse of complexity
Like all ecosystems, American healthcare relies on a delicate balance to function effectively. Disruption in any part can lead to systemic instability. Pharmacy Benefit Managers (PBMs), often vilified for soaring drug prices, embody just a fragment of a complex problem. While they’ve been accused of exploiting rebates and formulary placements for profit, the issue extends beyond a single entity.
The case of Humira and its biosimilars exemplifies the dilemma. Despite the recent introduction of eight Humira biosimilars with potential price reductions up to 85%, only a mere 9% of patients benefited from lower prices three months post-launch. This discrepancy suggests PBMs may favor higher list prices to secure more substantial after-market rebates, contradicting the notion that competition naturally drives down patient costs.
Moreover, the ecosystem’s intricacies are further highlighted by the contentious debate over copayment plans. Designed to alleviate drug costs for patients, these plans have instead become a point of contention between pharmaceutical companies and insurers, leading to bans in 16 states. Such measures are political hot-topics but barely scratch the surface of the underlying issues.
Solving the healthcare conundrum requires more than incremental adjustments; it demands a radical overhaul of how we approach the interplay between the various components of the healthcare ecosystem. Only by embracing a holistic strategy can we hope to address the systemic flaws that hinder the delivery of affordable, accessible healthcare.
A wicked solution
The costs of doing nothing are severe. US pharma, given its size, scale and homogeneity, make it the most attractive location for launching new medicines. Whilst for patients, the availability (if not the accessibility) of cutting edge medicines is invaluable, introducing anything that puts this at jeopardy could create a worldwide, not just domestic, problem.
At the current rate, not only will pharma continue to be kicked around between parties, but progress for patients will never be made. At best, this would be the simple continuation of the (woefully inadequate) status quo. At worst, patients will increasingly boycott our industry, not only damaging their own lives, but reducing our ability to develop the innovative therapies of the future.
We need to understand that the answer, more innovative thinking, is not something that can be imposed from the top down, but that is spawned from the bottom up.
We must embrace creativity that acknowledges the complexity of the healthcare ecosystem we’re working in.
But when would we find the time? Our everyday working lives are already too full; there isn’t much space for open reflection. Regulations and entrenched mindsets make us notoriously resistant to change.
Enter a new type of event, Pharmageddon, for those who aren’t yet ready to throw in the towel. A place where we have the chance to pursue a future that isn’t inevitable. Where those in life sciences who are willing to push outside their comfort zone can convene. Where the idea of deconstructing and reconstructing the industry becomes possible.
Events should be the places where this attitude abounds, where ideas fizz out of panel sessions and keynotes are wholesome and inspiring. But these too have grown stale and the feeling upon leaving a pharma conference is one of deflation, not inspiration.
If you’re fed up with how we approach problems in our industry; if you think the best days of pharma are ahead of us, not behind us; and if you’re willing to get your hands dirty and think differently, come and join those that agree with you in New York.