Pricing in the limelight
In almost every area of technology we expect that as products mature, prices will drop. Think of early TVs, calculators, mobile phones. But that’s not the case with medicines, where prices seem to drop more slowly or even increase with age.
Medicine pricing has been in the international media headlines, with multiple stories focusing on excesses, and responses to pricing.
Companies came under the spotlight for ratcheting up the price of older drugs, for no apparent reason. The most high profile example came from US-based Mylan for its adrenaline injector Epipen, which had increased the price by 500%(external link) over a decade.
News reports also highlighted that some companies – including US company Valeant – had made it their central business strategy to buy older drugs then rapidly increase the price.
In Europe, British regulators fined American multinational Pfizer(external link) a record £84.2 million ($US107 million) for increasing the price of an epilepsy drug by up to 2600 percent.
The Italian Competition Authority fined South African-based Aspen 5.2 million euros(external link) after it increased the price of some cancer drugs it had acquired from GlaxoSmithKline. The Italian case sparked the European Commission(external link) to open an investigation into pharmaceutical pricing.
In the face of ongoing cost pressures, there continued to be debate over policy responses.
The New England Journal of Medicine(external link) reported that 10 US states have introduced bills to require pharmaceutical companies to disclose their R&D costs, and Vermont has passed into law a requirement for companies to justify their prices.
In the UK, concern about a cost blowout in the Cancer Drugs Fund (external link)had led to reforms, although criticism remained that the fund undermined mainstream decision-making.
Canadian media(external link) looked at New Zealand’s funding model amid an ongoing debate about medicine prices in Canada. The story identified a system that saw Canada paying up to 1200% more than New Zealand for drugs made by the Canadian firm, Apotex.
And in Australia, the New Zealand model was examined(external link) in the context of continued concern about high spending on medicines in Australia.
Last updated: 21 December 2018