By Anisha Mukherjee '20
The Complex World of Drug Pricing panel was held on April 16th with a group of panelists who were each affiliated with Columbia University in varying capacities. Panelists inclluded Tracy Bahl '04 (OneOncology), Prof. Neal Masia (Columbia Business School), Dr. Geraldine McGinty '00 (Weill Cornell Medicine), and Prof. Bhaven Sampat (Mailman School of Public Health).
The discussion initially focused on what the typical timeline looks like for a new product launching in the US, as pharmaceutical companies generally must begin thinking about what price their drug might command in Phase II trials. These price forecasts inform the amount of funding a drug will receive for Phase III trials as companies must understand the economics of a product and its potential competition.
From there, the discussion shifted over to pharmacy benefit managers and their evolution from being created to purely manage the pharmacy portion of the health plan to their current iteration where they blur the lines between a PBM, payor, distributor and retailer. The shifting role of the PBM also partially explains the general pricing trends with drugs as we see list prices going up, while net prices going down due to larger rebates.
Patents were another important topic discussed as patents continue to be an important incentive to promote innovation. As patents expire on drugs and generics enter the market, there is significant price erosion leading to a steep decline in revenues for the branded drug manufacturer.
Finally, the panel ended with a conversation around the question of how payers should think about covering curative therapies as the industry inches towards the $1M mark, given that patients tend not to stay with one plan past 1-2 years.
A New Healthcare Initiative
This event is part of an exciting project to organize events that showcase healthcare thinking across Columbia, as the Healthcare and Pharmaceutical Program at Columbia Business School is in a unique position to blend theory and practice and convene conversations around important issues that engender debate and demand clarity.
Here is the full photo album for this event.