health
Is cheaper better if it kills cancer cures?
In a mad scramble for the midterm elections, Washington is proposing every scheme imaginable to lower the cost of prescription drugs. But how prices are lowered matters, especially when voters are not advised of the fine print. Misguided drug-pricing schemes can kill tomorrow’s cures.
TL;DR
- The Inflation Reduction Act's Maximum Fair Price mechanism may hinder drug development by using past prices as negotiation starting points.
- This pricing framework could disincentivize the creation of new drugs, particularly those with superior efficacy like advanced cancer treatments.
- The law allows earlier price negotiations for small-molecule drugs compared to biologics, reducing time for post-approval studies and investment returns.
- Venture capital is reportedly shifting away from oncology due to concerns about government price anchoring.
- The article advocates for value-based pricing models, such as USC's GRACE model, to better reflect a drug's true worth to patients.