Pricing Power

Recently the 'Drug Pricing bubble' has become a controversial issue ( 4-1 ). In general, a price increase of the new drugs is not avoided because pharmaceutical company must have invested huge money for their R&D cost. Doctors, insurers and politicians are searching for the different ways to pressure drugmakers on pricing. For instance, some cancer doctors are in the process of creating a way to measure the value of the drugs, the first step in a drive to give patients affordable options. In particular, patients are becoming increasingly knowledgable and involved in decisions regarding their own health care, and seeking more information regarding the humanistic outcomes of therapy. Equally important is some scholars who plan to rate the cost effectiveness of expensive new drugs, and will urge physicians to use the rating to discuss the costs with their patients. The aim will be to provide the framework for a scoring system that will give doctors and patients options to discuss in determining how to proceed with care. The right of medical decision will transfer the patient options like as a marketable information, the option can provide patient to make decision of the individual medical choice, that will be under pressure to reduce cost in the medical fields systematically.

Now, the concern for decision makers, healthcare professionals and the public should focus on the costs and benefits of drug therapy (1-6), and might be thinking a rising ceiling for medicines newly on the market to prevent drug's price increase. Of course, cost-effectiveness data is not the only factor in drug choice, nevertheless, spending on drugs is an obvious target for saving because it is easily identifiable. It is very important to look at the cost issue from the multi-perspective of patients, insurers, the drug industry and politicians of multi-social security systems with more cost constraints (4-2).

As mentioned above, it is necessary to scientifically value the costs and consequences of drug therapy. Therefore, Pharmacoeconomics has lately attracted considerable attention because it may be a branch of health economics that focuses on the costs and benefits of drug therapy ( 4-3). In essence, the theory could analyze uses important tools for examining the outcomes or impact of drug therapy and related healthcare interventions. The assessment is useful for the tools to examine the impact of alternative drug therapies and other medical interventions. On the other hand, there are some insufficiency to estimate medical valuation because the process of pharmacoeconomic has only been limited in pharmaceutical costs and products in a drug therapy. From my perspective, there need some scopes of an improvement for healthcare estimation because the price of drugs might be the foundational mysterious. In particular, I slightly doubt whether the price of drugs reflects the value of treatment in the point of efficacy and safety. Thus, there are some huge informational gaps in the medical field. Therefore, I will take notice for the pricing power of drugs because I think that the gaps are related to arbitrages to create new idea for drug business. Reviewing the process of drug price in various cases, drug price might have been not decided by its efficacy, safety and QOL, without market mechanisms surprisingly. The process of the pricing method should be reformed for the new medical market without a complicated, mysterious and unclear process. In the end, my opinion for the medical strategic transformation will sum up the Pricing Power by the digital bio-networks systems in the point of a numerical value. If the open medical systems could reveal the valuation of the drug therapy, the more pricing power will negotiate for the appropriate medical treatment. It might be one of very exciting idea that the free drug might have the possibility for new strategy of a pharmaceutical company (4-4 ). The investigation of the possibility for Free drugs will open a new great deal for patients, medical institutes and pharmaceutical companies for the medical markets because the preparation of the pharmaceutical company for the future should be to create new incomes from medical service fee through the new digital bio-networks systems.

Reference

4-1) Cancer Doctors Join Insurers in U.S. Drug-Cost Revolt (Bloomberg., May 7, 2014)., Cancer Doctors Plan to Compare Value of Expensive Drugs., (Bloomberg., Apr 16, 2014.)., Rarefied drug pricing., (Nature Biotechnology., 2014, 32, 398).

4-2) ファーマ２０２０：ビジョン岐路に立つ医薬品業界 (PRICEWATERHOUSECOOPERS).

4-3) PHARMACOECONOMICS: A REVIEW (Asian Journal of Pharmaceutical and Clinical Research., 2009, Vol.2 Issue 3)., Use of pharmacoeconomics in prescribing research. Part 2: cost-minimization analysis – when are two therapies equal? (Journal of Clinical Pharmacy and Therapeutics., 2003, 28, 145–150)., Use of pharmacoeconomics in prescribing research. Part 3: cost-effectiveness analysis – a technique for decision-making at the margin. (Journal of Clinical Pharmacy and Therapeutics., 2003, 28, 243–249)., 医療経済評価研究の政策への応用に関する予備的研究. (平成22年度　厚生労働科学研究費補助金政策科学総合研究事業による分担研究報告書）

4-4) Free samples of prescription drugs are costly to patients, study says - lattices. (latimes.com/science/sciencenow/la-sci-sn-free-drug-samples-generics-dermatology- 20140416,0,1035454.story)., Characterizing the relationship between free drug samples and prescription patterns for acne vulgaris and rosacea. JAMA Dermatol., 2014, 150(5),487-93.