As the new drugs for cancer and other severe medical conditions reach the market, the prices are also drastically increased with no transparency of pricing revealed. This in turn sets drugmakers under fire around the globe with the pressure to lower prices of drugs.

The debate on drug pricing is becoming a familiar topic in the US, and it is spreading across the world as the Dutch government hosts a forum for World Health Organisation (WHO) member states to advocate “fair pricing”.

In Europe, some German firms have chosen to not sell the drugs instead of accepting price deduction, whereas Britain introduced new budget control on expensive products last month. Meanwhile China and Japan - the two largest non-Western markets for pharmaceuticals - are also cutting costs, though the costly new drugs remain out of reach for poorer countries.

"It's great that we have these treatments but we need to find a way to make them more affordable," said Andrew Rintoul, the WHO health economist organising the drug-pricing forum.

Lack of price transparency a big concern

Even though Thomas Cueni, newly appointed director-general of the International Federation of Pharmaceutical Manufacturers and Associations, denied the claim that drug expenditure is breaking the system, Rintoul said the lack of price transparency is still a major concern for policy experts.

In public sectors, the officials call for greater disclosure on pharmaceutical companies’ R&D and production costs in order to ease the negotiation more effectively. Nevertheless, companies are often reluctant to justify the detailing factors behind the price hikes.

"The industry has to stand up and argue its value proposition," said Cueni, who showed his concern about the WHO meeting.

While there are some off patent generic drugs that are more affordable to help with the current situation, they may run out of supply when prices are at unsustainable low levels. Hence, some experts suggest fixing minimum prices to ensure the circulation of vital products on the market.

WHO launches new approach to use biosimilar drugs

Meanwhile, to address the issue of limited access and unaffordability of drugs in poorer countries, the WHO has announced a pilot project this year to explore the potential of using biosimilar drugs, especially for expensive biotech cancer drugs. The UN agency also announced similar approaches to find a biosimilar insulin option for patients.

From September onwards, WHO will accept applications from drugmakers who can produce generic cancer drugs, including rituximab and trastuzumab that are listed as WHO essential medicines, in order to expand worldwide distribution.

“Innovator biotherapeutic products are often too expensive for many countries, so biosimilars are a good opportunity to expand access and support countries to regulate and use these medicines,” said Marie-Paule Kieny, WHO assistant director-general.

Conflicts of interest from doctors’ perspective

While the use of biosimilars or generic drugs is taken into consideration, a recent study led by Ian Larkin, an assistant professor of strategy at the University of California, Los Angeles Anderson School of Management, shows conflicts of interest from the perspective of doctors when ordering drugs from the pharmaceutical sales representatives.

According to the results, doctors who worked at hospitals where sales representatives were time limited or restricted were more inclined to order fewer promoted brand-name drugs and used more generic drugs instead. However, the sales representatives who were less refrained from accessing the hospitals or providing meals and gifts showed significantly varied results.

In fact, some doctors are found to be earning more by working with drug and device companies to order more brand-name drugs although they may not be potentially effective or huge medical breakthrough. While the conflicts of interest in medicine have been common, it has brought attention to how they affect drug prescriptions by physicians.

Thus, Larkin said that it is important to have a policy that governs pharmaceutical marketing yet at the same time, think it through carefully and involve the medical community to execute the policy more efficiently. MIMS

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