The Evidence Base

Informing Policy in Health, Economics & Well-Being
A collaboration with
USC Dornsife Center for economic and social research

What’s a Fair Price? The Debate Over Value & Cost of Specialty Drugs (Part 1)

When Turing Pharmaceuticals raised the price of a drug that had been on the market for over 60 years from $13 to $750 a pill there was overwhelming public dismay.  For many, it highlighted the growing concern over prescription drug prices.

According to the April Kaiser Health Tracking Poll, seventy-six percent of the public prioritized the affordability and availability of medications for chronic conditions- Hepatitis, HIV, cancer, mental illness- as a top issue for the President and Congress.  Furthermore, in the same poll, sixty percent said lowering prescription drug prices should be a top priority for government action.

More recently, in August, the Kaiser Family Foundation poll “found that 72% of Americans feel that drug costs are unreasonable and that drug companies put projects before people (74%).” This doesn’t discount the value of pharmaceutical innovation though: sixty-two percent of the public say “that prescription drugs developed in the past two decades have made the lives of people in the US better,”  according to the same poll.  Individuals are unhappy with the price they pay for their medications but also see the benefit they provide.

This national (often dichotomous) conversation of drug pricing and value is frequently centered on specialty drugs. Specialty drugs are advanced treatments used to treat complicated conditions like cancer and hepatitis. Their effectiveness in treating these chronic diseases and precision are put against a high price tag, often making them the battle cry for prescription pricing policy changes.

There is no disagreement in the pharmaceutical innovation these drugs represent. The new Hepatitis C treatment options have shown to eliminate the virus in over 90% of cases- effectively curing the patient of a disease that was a few years ago considered a life sentence. But, how do we make these treatments affordable and accessible to those who need them most while ensuring quality care and encouraging new innovation?

A recent study co-authored by Schaeffer Center researchers found that by utilizing a quality-adjusted framework to examine costs and benefits, innovation and health outcomes can be analyzed much more exhaustively.  Value-based payment reform has also been posited. From the 21st Century Cures Act to payment reform to calls for pharmaceutical price setting mechanisms, policymakers have put specialty drugs and health care on the agenda.

On October first these issues will be in the spotlight and discussed by legislators, thought leaders, and health policy experts when we join The Hill in hosting The Future of Specialty DrugsClick here for more information and to register.