Readers look at pharmaceutical costs, nursing home algorithms and the impact of the Medicaid Purge.
,” Avik Roy and Gregg Girvan argued that Medicare’s new authority to demand lower prices from drug manufacturers will not result in the development and approval of fewer new drugs. Because most biotech innovation comes from smaller firms, they wrote, reducing revenue to Big Pharma will have minimal impact on drug creation.
Start-ups have no expertise in shepherding a drug through what Mr. Roy and Mr. Girvan acknowledged are extensive clinical trials and a complex Food and Drug Administration approval process — or in manufacturing and marketing. Big firms do, and their expertise in navigating those processes matters. The potential revenue stream from a new drug, which price controls would diminish, determines the value of a start-up in an acquisition or partnership.
Avik Roy and Gregg Girvan’s op-ed explained why Big Pharma’s excessive drug prices are not a result of their investment in the development of new drugs. What the piece neglected to mention, and what similar articles also ignore, are the pharmaceutical industry’s huge expenditures on advertising, whichon advertising than any other industry except for packaged consumer goods, more even than the tech companies that previously occupied second place.
Thank you for your excellent article about how for-profit health care affects health-care quality. The incentives are aligned toward profit and not toward quality of care.
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