JPM: Saunders, Pops, others talk drug pricing

Dive Brief:

  • Allergan CEO Brent Saunders shared a stage with Alkermes CEO Richard Pops, PhRMA Chairman Joaquin Duato, President of ICER Steve Pearson and CEO of PhRMA Steven Ubl at the J.P. Morgan Healthcare Conference in San Francisco to talk about drug pricing.
  • Saunders, who pledged the company would put a stop to predatory pricing, emphasized that there is a difference between net price increases and gross price increases.
  • Meanwhile, Pops and Pearson noted that a lot of the focus of the drug price debate is on price hikes for generics or high-priced ultra rare disease drugs. 

Dive Insight:

It was inevitable that the topic of drug pricing would take center stage at the largest gathering of the biopharma industry. While Saunders tried to emphasize the important role of pharmaceuticals and downplay some of the bad behavior from the industry, others acknowledged that changes are coming.

"We can't build pricing solutions for the bad actors," said Saunders at the breakfast hosted by Endpoints. Saunders' rhetoric towed the industry line – which has pushed the message that innovation costs money and saves lives, while downplaying the profit side of the equation.

But Duato, who is also the worldwide chairman of pharmaceuticals at Johnson & Johnson, cautioned that there has to be more risk-sharing between pharmaceutical companies and payers.

He noted alternative models like outcomes-based pricing are going to become more important as scrutiny of the industry's pricing practices continues.

ICER President Steve Pearson echoed this sentiment, noting that public payers like state Medicaids will become the proverbial canary in the coal mine with their design flexibility, but inevitably some Food and Drug Administration-approved drugs will just not be covered. 

The move toward drug pricing transparency is a good one, said Pearson, complimenting the moves made by companies such as Allergan, Johnson & Johnson and Novo Nordisk to be more forthcoming about their pricing strategies. Ultimately, he cautioned "affordability is a complicated soup."

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Top image credit: Lisa LaMotta