Major trade group slams 'misleading' analysis of drug prices
- The president of BIO, a major trade group, stood by the biotech industry's pricing practices in an op-ed Wednesday, calling a newly published report on rising drug prices "wildly misleading" and "conjecture."
- The analysis, published the same day by Bloomberg, found prices increased by more than twice the rate of inflation for 30 out of 39 drugs between 2009 and 2015, even when factoring in rebates and discounts.
- But Greenwood, who has led a vigorous defense of the industry amid claims of excessive price increases, argued Bloomberg's analysis fails to put those prices in context and account for the cost of drugs which fail in development.
The debate over drug prices continues to smolder even as drug companies like Turing Pharmaceuticals and Valeant recede from headlines somewhat.
Bloomberg's report attempted to shed light on the often murky relationship between a drug's "list price" and the actual net price charged after pharmaceutical companies negotiate rebates and discounts with health insurers and benefit managers.
As the industry has come under fire for rising prescription drug costs, many drugmakers have taken pains to point out that often-quoted prices are higher than what actually gets charged.
But Bloomberg discovered discounted prices for 27 out of the 39 drugs studied increased by 25% or more over the last six years, outpacing inflation growth which checked in at 9.5%. Discounts actually increased over that period, but didn't fully offset the higher growth in list prices, according to Bloomberg.
The analysis used estimates from SSR Health and price-comparison data from Connecture Inc. to calculate list and rebate prices.
Jim Greenwood, the president of the industry trade group, quickly issued a rebuttal to Bloomberg's piece, attacking the publication for failing "to take in the full picture of biopharmaceutical successes and failures." Greenwood claimed only 1 out of 10 biotech companies turns a profit, and pointed to the high failure rate of clinical research.
"It’s simply wrong to attempt to report on the most commercially successful drugs without putting that information in context of the broader industry drug research ecosystem," Greenwood said.
He also cited a recent study from IMS Health which estimated net price growth for branded drugs fell to 2.8% in 2015, notably lower than years prior.
However, Bloomberg's analysis looked at price growth over a six-year period between 2009 and 2015, a time span during which net prices grew at much higher rates, according to IMS. For example, net price growth hit 8.7% in 2011 and 9.1% in 2012, before falling to around 5% over the new two years.
Greenwood's sharply-worded response suggests a greater willingness from BIO to push back on the public perception that drug prices are increasing by too much, too often. The op-ed built on previous comments Greenwood and other industry representatives have made recently, including at the eponymous trade conference BIO, held earlier this month.
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