United States: Taking A Scalpel To Global Drug Access And Affordability

Last Updated: November 23 2015
Article by Reynold W. Mooney

This week we're delighted to feature a blog written by one of our US colleagues. In his 'My Take' Reynold W. (Pete) Mooney (Managing Director, Life Sciences and Health Care, Deloitte Touché Tohmatsu Limited) discusses how expanding market access is crucial to providing a sustainable solution to rising healthcare costs.

While infectious disease burden is still a pressing issue around the world, many regions are also facing an explosion of the same chronic and lifestyle diseases that are impacting the developed world. Programs like the US President's Emergency Plan for AIDS Relief (PEPFAR) have enabled great strides against diseases like HIV/AIDS, for example. But sadly, little public money goes toward chronic disease in some parts of the developing world. As a result, more than half of the world's population makes too little to afford many of the drugs they need, and four out of five chronic disease deaths are in low- or middle-income countries.1,2 These attention-grabbing statistics highlight the vast unmet needs in terms of access and affordability that exist around the globe.

Due to several recent egregious examples, the limelight in which the pharmaceutical industry basks has intensified of late, with questions raised about pricing practices. While it is easy to generalize that "the industry is the problem" based on a few data points, this is a dramatic over-simplification of the issue. We are certainly a long way from achieving nirvana – "getting the right drug, to the right patient, at the right price and time, anywhere in the world." But, the reason we have not achieved this is not solely the fault of industry. Rather, it is a very complex, multi-faceted issue that involves all the players in the system.

Expanding market access to meet the growing demand for medicine and medical devices is clearly a critical industry goal and will be a key focus at the Financial Times & Deloitte Global Pharmaceutical and Biotechnology Conference happening later this month in London. The conference brings together leading life sciences executives and other industry stakeholders to assess the current state, discuss trends, and look for ways to improve the situation. This year, the issues of access and need is expected to generate significant discussion.

A key question one of the panels is expected to discuss is, "With a significant proportion of research and development (R&D) focused on complex drugs for orphan indications, oncology products, anti-retrovirals, and the like, how can we ensure unmet medical needs, particularly in the developing world, are met at a price point that makes these vital products affordable?"

Of course, "the world" is not one market. Pharmaceutical companies can face vastly different markets and political climates depending on the specific country in which they are operating:3

The cost of creating new and effective drugs for highly complex diseases is not expected to get any cheaper. For better or worse, drugs are largely created through a free market, capitalist system where shareholders expect a return on their investment. While some governments may argue against this approach, one can make a case that more people have access to more drugs for more diseases than they did one hundred years ago.

This still isn't enough. But, two major issues are complicating the conversation.

For one, while drug companies can be criticized in some quarters for having a profit motive, it is a fact of life that somebody needs to accept the risk and fund the cost of discovering new drugs if we want to continue making progress in improving human health. Currently, the cost of that R&D is buried in the price the patient pays.

Another dimension is the motivation of governments and health systems themselves. Many companies face difficult export regulations and a thicket of national legislation that frequently make it difficult to get drugs to market. Many developing countries have mark-ups on pharmaceutical products that drive up costs. For example, in Tanzania, pharmaceutical manufacturers have to factor in a 2 percent pharmacy board fee, and Brazil imposes an 11.7 percent import tariff.4 In some parts of the world, intellectual property protections are often lax; drug approval processes are often unclear, cumbersome, and bureaucratic; and corruption and problems like product diversion are still issues where the need for product is acute. Government policies and approaches can be a major factor limiting access to medicine.

My goal is not to cast blame or identify a culprit. Rather, I hope to illuminate that access, pricing, and affordability around the world is a multi-faceted issue. It's easy and convenient to demonize the industry. But that is just one view. For an issue this complex, we need a scalpel to really understand the details. After all, at the end of the day the objective should be the same: "getting the right drug, to the right patient, at the right price and time, anywhere in the world." It's a noble objective. But, we are still a long way from achieving it. Ultimately, I believe it's in the collective interest of all parties involved in the system to strive to make this reality.

Footnotes

1 http://apps.who.int/medicinedocs/en/d/Jh2951e/2.1.html

2 http://www.who.int/chp/chronic_disease_report/full_report.pdf

3 http://www.ncbi.nlm.nih.gov/books/NBK202523/

4 http://www.ifpma.org/fileadmin/content/Publication/2013/IFPMA_-_Facts_And_Figures_2012_LowResSinglePage.pdf

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