Forbes – High Drug Prices Could Increase Industry Innovation

Dr. Peter B. Bach is a physician at Memorial Sloan Kettering Cancer Center and the Director of its Center for Health Policy and Outcomes. He is a passionate advocate for patients and often eloquently expresses concerns on the high prices of drugs, particularly new cancer therapies. When he speaks, many people including myself pay close attention. However, his guest post on Forbes.com entitled “Could High Drug Prices Be Bad For Innovation” unfortunately is off-base.

Like many, Bach bemoans the cost of new drugs, such as Gilead’s breakthough hepatitis C treatment, Sovaldi. However, despite being priced at $1,000/pill and $84,000 for a course of therapy, economic analyses show that this drug actually will save the healthcare system money. By the way, it also cures the disease. In reality, this drug is priced based on the value it delivers. Curing hepatitis C will result in reducing the need for liver transplants in these patients and will stave off liver cancer, resulting in considerable savings to the healthcare system, thereby making Sovaldi use cost effective. The value that a drug brings should be the major determinant for the cost of a new medicine.

Read more – Forbes