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The ongoing furor over the price of prescription pharmaceuticals has become so intense that even an august, establishment group like the National Academy of Sciences, Engineering, and Medicine (NAS) cannot help but weigh in. Its report, “Making Medicines Affordable: A National Imperative,” released Thursday, is encouraging, as it is from an eminent group long on scientists and short on politicos, hinting at a rare, nonpartisan objectivity befitting the Academies.

The report is a valuable addition to the public debate. The 17-person panel that wrote it reached consensus on many, though not all, of its recommendations. But if there is a culprit lurking beneath the surface of these many policy recommendations, it is the biopharmaceutical industry. The report includes calls to demand more financial transparency from drug manufacturers as if they were utilities, to outlaw so-called “pay for delay” patent settlements, and to limit the benefits of the Orphan Drug Act.


The panel gets more things right than wrong. However, in failing to emphasize strongly the importance of continuing adequate financial incentives for biomedical innovation and the safeguarding of intellectual property, the report ignores a central tenet of medicine itself — do no harm. Moreover, the call for direct price negotiations by the government on behalf of Medicare Part D for outpatient drugs largely ignores the risk that this scheme will exacerbate rationing through the expansion of restrictive formularies.

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  • This is one of the more balanced articles I’ve read about the drug pricing issue and raises several good points. But it also perpetuates several myths that the pharma industry wants to believe. One of these is the Sovaldi myth. That Gilead took these enormous risks and spent incredible amounts of money on the development of this drug. Sure the paid $11B for Parmasett. This was after the latter company’s development of the antiviral had been funded with mostly taxpayer dollars through various NIH mechanisms. Then Gilead did the clinical development of Sovaldi and with the $84k price tag made their entire investment back in a couple of years and then some. In spite of the fact that others have entered the market the price of these drugs still cannot be considered “cheap”. As far as the “incentives ” for pharma companies to do “innovative research” they could do a lot better at this if they started spending even a small percentage of what they currently put into share buybacks (which serve to pump up their share prices and enrich executives) into innovation.

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