Why Our Problem With Drug Pricing Goes Way Beyond Shkreli

I’d like you to know about an exciting development in my life.  I recently became CEO of VIVIO Health, a company focused on solving one of the biggest problems facing our country today, the out-of-control costs of specialty drugs.  

Over the past few months, many of us have heard of the abuses surrounding Martin Shkreli (who is in the news again after a judge set a 2017 trial date for his securities fraud case) and separately, Valeant Pharmaceuticals, which was recently under fire for drug price increases. What we haven’t heard is that these sensationalized cases are truly insignificant when compared to the enormity of the problem facing America.  Only a few years ago, specialty drugs comprised a reasonable sounding 10% of our overall drug spend.  Last year, it bloated to 38% and by 2018, it will be an astounding 50%, which is an increase of $70 million … a day.  

The reason we pay many multiples more than other countries for the same drug is because we have a rigged system in which America is the only globally unregulated market. Worse, we have actually created laws to protect large healthcare monopolies. So, we as Americans have the worst of all worlds: neither a single payer system with explicit price controls nor a free and fair market.

Consider the hepatitis C drug Harvoni, which sells for about $95,000 in the United States for the required 12-week course. The same therapy costs less than $1,000 in India, and to add insult to injury, this price is for products that are officially licensed by Gilead the manufacturer of Harvoni.

Furthermore, the argument that this is a result of us having to subsidize drug R&D costs for developing countries is a farce. In developed countries such as France, Harvoni is available for about half the price we pay in the US. 

Unfortunately, the same dynamic extends beyond specialty products into other commonly-used drugs. The price for a 30-day supply of Crestor is about $200 at most US drugstores, but the price in India is only $6 for a product which in both cases was manufactured in Puerto Rico by AstraZeneca. Shockingly, $6 is less than what Americans pay for a generic therapeutic alternative such as atorvastatin.

VIVIO Health is tackling this large and complex problem because we represent the vast majority of Americans who pay far more than they should for healthcare. I dream of a better country for my three children and I know you do the same for yours.

I have been asked whether I feel like Don Quixote. No question, reforming how healthcare is purchased in America is a daunting task, but our team has clarity on enough of the puzzle pieces to make a difference. Reform is an achievable goal with many precedents in other industries such as travel, stock brokerage and retail.

The VIVIO Health solution reimagines the way we buy, use and measure specialty drug therapies. Our solution starts with the outcome and works backwards collecting data at every step. We’ve reversed the current purchasing model that starts with profitability for intermediaries and suppliers and instead prioritize the best alternatives for both patients and employers who foot the bills. The data we collect coupled with external data allows us to answer perplexing questions surrounding cost, efficacy and choice.

VIVIO Health has assembled a great team of people who are dedicated to breathing life into our vision of a saner healthcare system. We foresee a day, with everyone’s participation, when America saves billions on healthcare costs.  We need your support and are asking you to join us in saying NO to legacy and YES to a better system. 

Sources:

• GoodRx US drug prices July 2016
• France pegs Gilead hepatitis C drug at "lowest price in Europe"
• Express Scripts 2015 Drug Trend Report, March 2016
• Barclays U.S. Health Care Distribution & Technology, Specialty Market Model 2016 Update, January 6, 2016
• Natco gets DCGI approval to launch generic hepatitis-C drug Harvoni in India