When Americans talk, pharmaceutical companies listen. And what they’ve heard is that initiatives to contain or regulate medical costs get labeled as “rationing,” a word with very un-American connotations.
While politicians wring their hands, pricing strategists at pharma and biotech companies take action by charging high and rising prices for products for life-threatening illnesses. Cancer is Exhibit A, with many drugs costing more than $100,000 per year of treatment. A JAMA Oncologypaper reviewed wholesale prices for cancer drugs approved over the past five years and found that prices are not correlated with a drug’s novelty or efficacy.
The authors conclude:
“Our results suggest that current pricing models are not rational but simply reflect what the market will bear.”
Now it’s possible that there is a greater correlation between actual negotiated prices and novelty or efficacy that isn’t showing up in the researchers’ data on wholesale prices. Still, the main conclusions…
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