Stories about: drug pricing

The ever-changing, interwoven regulatory and drug-pricing landscape

Tangled roots
Drug approval is increasingly intertwined with pricing questions.

At last month’s BioPharm America conference, what I originally thought would be a run-of-the-mill panel wound up being a frank discussion about regulatory and pricing challenges that pharma and biotech companies are facing today. I hadn’t realized these two challenges are intertwined so closely.

The regulatory and pricing paths for new drugs in the United States have become increasingly difficult to navigate. Due to outside policy pressures, the FDA is scrutinizing drugs more than in the past, requiring much more data. Even when a drug is approved, there is no guarantee that payers will cover its full cost, as they are starting to consider the drug’s overall value—improving quality of life and decreasing costs—along with its effectiveness.

Meanwhile, in many European single-payer countries, pharmaceutical companies are being told how to price their drugs before they are considered for approval by the regulatory agencies. The likely effect is less return on investment on new drugs, which could in turn decrease the pace of innovation.

Vaughn Kailian, managing director of MPM Capital, a health care venture capital investment firm, led an eye-opening conversation around these topics.

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