If so, congrats! You’ve entered the Australian drug market. The committee will then make a recommendation to the country’s national health care system of whether to buy the drug - and, if the recommendation is to buy it, the committee will suggest what price the health plan ought to pay.Īustralia’s Pharmaceutical Benefits Advisory Committee is not easy to impress: It has rejected about half of the anti-cancer drug applications it received in the past decade because their benefits didn’t seem worth the price.īut if you do succeed - and Australia deems your drug worthy to cover - then you’ll have to decide whether the committee has offered a high enough price. You’ll have to submit an application to the Pharmaceutical Benefits Advisory Committee, where you’ll attempt to prove that your drug is more effective than whatever else is on the market right now. So let’s say you want to sell your drug in Australia. These decisions are often related, as regulators evaluate whether your new drug is enough of an improvement on whatever is already on the market to warrant a higher price. These regulatory bodies generally evaluate two things: whether the country wants to buy your drug and, if so, how much they’ll pay for it. You’re going to want to start setting up some meetings with agencies that make decisions about drug coverage and prices. Let’s say you’re a pharmaceutical executive and you’ve discovered a new drug. Right now America’s high drug prices mean that investing in pharmaceuticals can generate a whole bunch of profits - and that drugs can be too expensive for Americans to afford. “As you decrease the potential profits I’m going to make from pancreatic cures, I’m going to shift more of my investment over to apps or just keep the money in the bank and earn the money I make there,” Garthwaite says. Think about a venture capitalist who is deciding whether to invest $10 million in a social media app or a cure for pancreatic cancer. There’s this analogy that Craig Garthwaite, a professor at Kellogg School of Management who studies drug prices, gave me that helped make this clear. And less investment in drugs would mean less research toward new and innovative cures. Lowering drug profits would make pharmaceuticals a less desirable industry for investors. What’s harder to see is that if we did lower drug prices, we would be making a trade-off. And the problems that causes are easy to see, from the high copays at the drugstore to the people who can’t afford lifesaving medications. The United States allows drugmakers to set their own prices for a given product - and allows every drug that's proven to be safe come onto market. They’ll pore over reams of evidence about drugs’ risks and benefits. These agencies will typically make decisions about whether these new drugs represent any improvement over the old drugs - whether they’re even worth bringing onto the market in the first place. Other countries will task a government agency to meet with pharmaceutical companies and haggle over an appropriate price. The United States is exceptional in that it does not regulate or negotiate the prices of new prescription drugs when they come onto market. What’s different about Humira in the United States is the regulatory system we’ve set up around our pharmaceutical industry. Humira is the exact same drug whether it’s sold in the United States, in Switzerland, or anywhere else. How does this happen? Why does Humira cost so much more here than it does in other countries? If you’re seeing a doctor in Switzerland, the drug runs around $822.īut if you’re seeing a doctor in the United States, your Humira prescription will, on average, run you $2,669. There, your Humira prescription will cost, on average, $1,362. Let’s say your doctor appointment is happening in the United Kingdom. In 2015, patients all around the world spent $14 billion on Humira prescriptions - that’s roughly the size of Jamaica's entire economy. Humira is an especially popular medication right now. The prescription is for Humira, an injectable medication used to treat a lot of common conditions like arthritis and psoriasis.
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