Major drugmakers push back in U.S. price debate
By Caroline Humer
SAN FRANCISCO (Reuters) - With a backlash brewing over the price of medicines in the United States, drugmakers are pushing back with a new message: Most people don't pay retail.
Top executives from Eli Lilly and Co (LLY.N: Quote), Merck & Co MRK.N and Biogen Inc BIIB.O said in interviews with Reuters this week that the media focus on retail, or "list prices," for branded medications is misplaced.
They stressed that the actual prices paid by prescription benefit managers, insurers and other large purchasers are reduced through negotiated discounts.
A couple of dramatic price hikes in 2015 exposed the whole industry to ongoing scrutiny in Congress and on Wall Street. Turing Pharmaceuticals raised the price of a generic anti-infective drug called Daraprim by 5,000 percent, and the larger Valeant Pharmaceuticals International (VRX.N: Quote) raised the price on a heart drug Isuprel by more than 200 percent.
The largest drugmakers quickly portrayed those cases as outliers. But the industry practice of raising prices each year for treatments used by millions of people is attracting new attention.
Adam Schechter, Merck's president of Global Human Health, said the industry needs to better explain the value of drugs and how they can prevent healthcare costs down the line.
"We have to explain the difference between the list price and the net price," he said in an interview.
Toward that end, two drugmakers at the JP Morgan Healthcare Conference in San Francisco this week shared with Reuters some limited information on actual pricing. Continued...