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January 28, 2020; 94 (4) Article

Qualitative study on the price of drugs for multiple sclerosis

Gaming the system

Daniel M. Hartung, Lindsey Alley, Kirbee A. Johnston, Dennis N. Bourdette
First published November 25, 2019, DOI: https://doi.org/10.1212/WNL.0000000000008653
Daniel M. Hartung
From the Oregon State University/Oregon Health & Science University College of Pharmacy (D.H., K.J.) and Oregon Institute of Occupational Health Sciences (L.A.), Oregon Health & Science University (D.B.), Portland.
PharmD, MPH
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Lindsey Alley
From the Oregon State University/Oregon Health & Science University College of Pharmacy (D.H., K.J.) and Oregon Institute of Occupational Health Sciences (L.A.), Oregon Health & Science University (D.B.), Portland.
MS
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Kirbee A. Johnston
From the Oregon State University/Oregon Health & Science University College of Pharmacy (D.H., K.J.) and Oregon Institute of Occupational Health Sciences (L.A.), Oregon Health & Science University (D.B.), Portland.
MPH
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Dennis N. Bourdette
From the Oregon State University/Oregon Health & Science University College of Pharmacy (D.H., K.J.) and Oregon Institute of Occupational Health Sciences (L.A.), Oregon Health & Science University (D.B.), Portland.
MD, FAAN
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Qualitative study on the price of drugs for multiple sclerosis
Gaming the system
Daniel M. Hartung, Lindsey Alley, Kirbee A. Johnston, Dennis N. Bourdette
Neurology Jan 2020, 94 (4) e368-e375; DOI: 10.1212/WNL.0000000000008653

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Abstract

Objective To describe pricing decisions, justifications, and attitudes among current and former biotech industry executives for companies that manufacture multiple sclerosis disease-modifying therapies.

Methods Four leaders in biotech who have been directly involved in multiple sclerosis disease-modifying therapy pricing or marketing volunteered to participate in 30-minute semistructured interviews conducted via telephone. An expert in qualitative methods moderated and analyzed the interviews alongside the principal investigator. Brief, preinterview online surveys were also administered to provide additional context and insight for discussion. Interviews were audio-recorded and professionally transcribed.

Results Participants consistently stated that initial price decisions were dictated by the price of existing competitors in the market. Revenue maximization and corporate growth were drivers of price escalations in the absence of continued market penetration. Lower revenue predictions outside the United States also informed pricing strategies. The growing complexity and clout of drug distribution and supply channels were also cited as contributing factors. Although decisions to raise prices were motivated by the need to attract investment for future innovation, recouping drug-specific research and development costs as a justification was not strongly endorsed as having a significant influence on pricing decisions.

Conclusions Contrary to prevailing narratives that underscore drug development costs, findings from our interviews suggest that the existing price ecosystem, overall corporate growth, international pricing disparities, and supply chain–related distortions may play a more central role in drug pricing decision.

Glossary

DMT=
disease-modifying therapy;
MS=
multiple sclerosis;
PBM=
pharmacy benefit manager;
PPT=
participant

Footnotes

  • Go to Neurology.org/N for full disclosures. Funding information and disclosures deemed relevant by the authors, if any, are provided at the end of the article.

  • Podcast: NPub.org/5phis8

  • Received March 11, 2019.
  • Accepted in final form July 18, 2019.
  • © 2019 American Academy of Neurology
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  • Reader response: Qualitative study on the price of drugs for multiple sclerosis: Gaming the system
    • Aaron Lord, Chief of Neurology/Assistant Professor of Neurology and Neurosurgery, NYU Langone-Brooklyn/NYU School of Medicine
    Submitted November 26, 2019
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