sustainability

4 Reasons The Wall Street Journal Was Wrong on Orphan Drug Sustainability

In Market Access by Chris HackettLeave a Comment

EDIT: The Wall Street Journal article was based on a survey handled by Leerink rather than the WSJ itself. That said, given the inferences in the post and WSJ’s publication of the survey, the points below still stand.

Recently, a Wall Street Journal blog post discussed a survey among 34 “payers” that claimed to establish that high Orphan Drug pricing can be sustained. Whether or not the prices are sustainable is far beyond my pay grade, and indeed there may not be an answer (yet). However, we have been talking to several payers over the last few months, and we were very surprised by the blog’s findings considering we have heard a resounding concern on their side.

In fact, so passionate are some of the payers about sustainability, that they are willing to debate capital markets and industry at next year’s World Orphan Drug Congress.

So where is the discrepancy here? Well, I would be remiss not to mention that this article was based on a survey that we don’t have access yet to the full results of. But based solely on the article there are clearly a few attempts at steering the discussion. Here are four big ones:

  1. We don’t know who in the 34 “payer organizations” were interviewed, or which 34 companies were on that list. The higher level members of the organizations we spoke to, and often even the media advisers, were very quick to suggest that sustainability was a clear concern of theirs. Without real knowledge of who specifically was interviewed, we have no way of knowing whether or not they interviewed a few insurance salespeople or VP of Specialty Pharmacy. Obviously, one of those would be more inclined to give a more accurate answer.
  2. Their claim that prices are “not fazing some insurers” is not reinforced by their data as shown. Their data states that the payers stated “coverage or access policies are unlikely to change to a large degree over the next several years”. This is a very different statement from “we are unfazed by drug prices”. Indeed, payers have admitted that due to regulations and other issues, there is very little chance of access policies changing. However, that doesn’t equate to a lack of concern. Make no mistake that payers are very concerned about pricing and sustainability of this industry, particularly as the number of orphan drugs increases and diseases are being “orphanized”. In fact, the article itself says later that “72% of the payers surveyed are moderately to severely concerned about the increased cost of orphan drugs”. “Not fazed” indeed.
  3. Not expecting policies to change does not mean they don’t wish they would. Most of the end of the article emphasizes how little payers believe the landscape will change over X amount of years. I have also heard these sentiments. But it is not by choice – many payers simply recognize that the discussion has not yet entered a mature phase, and until it does, there can be no real changes. The article is putting words in the mouths of the companies that filled out this survey that they may not have actually said.
  4. Sticker shock is pharma’s fault, not the payers. “Sticker shock” is when a high price is so egregious that it immediately turns you away, even before you may understand the value of the product. However,  based on the way the industry works it is on the pharmaceutical companies to articulate this value, not on the payers to discern it. If there is sticker shock taking place, it could very well be due to pharmacy throwing out prices and expecting everyone else to jump. Likewise, stating that being unable to discern the specific amount of pharmacy costs attributes to sticker shock is quite a leap, and seems like an attempt to further discredit the payers’s side of this argument.

So there you have it. I think it is pretty clear that the article is meant to steer the discussion away from the sustainability aspect and have us all pretend that everything is alright. Whether or not the industry is sustainable or not is something that needs to be talked about, regardless of which side you are on. Ultimately, wouldn’t pharma rather be safe than sorry? Perhaps the authors of the survey would be interested in debating at the World Orphan Drug Congress, as they seem to have already made up their minds.

Have any points or rebuttals? Tweet me @chrishackettCP

[Image: Wrong Way – Flickr. Image was modified from original size to 840 x 420]

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