Name: Allergan CEO: Here's How Drugs Are Priced
Uploaded: 2015-11-11
Duration: 3 min 23 s
Description: Brent Saunders sits down with Fortune's Susie Gharib to explain.

Let's talk a little bit about drug prices. As you know, there's a lot of concern in Washington and on the presidential campaign trail about the sky rocketing prices that consumers have to pay for life saving drugs. What's your take on the pricing environment right now for drugs? You know, what's interesting is in the United States for Mainstream companies doing mainstream types of activity. There is a lot of negotiation over direct pricing. I think a, there, there's this fallacy that we can just set a price and that's the price. Even in a Medicare Part D plan most of those are administered by commercial health insurers [ UNKNOWN ], I mean a United or, or humanity They negotiate those prices. They have committees that evaluate whether to put the drug on formulary, what the pharmacol economic benefit is, and then they manage the price in the form of rebates and the like. There is a very competitive environment around pricing today. That being said I think we can always use more transparency in pricing. And I think that we have to always balance access and need and price. And that's something that we have to work with, not just ourselves, but the health insurance industry and others to do. I mean, one of the solutions that's being talked about is maybe linking the price To patient outcomes and the quality of the drug's performance. What do you think of something like that? I think that's actually a really interesting idea and I think we're starting to see some pilots where we're testing that. And I think that could lead to a possible good policy and / or framework. For drug pricing. What's interesting though in drug pricing is as an industry a few companies have solved a disease, Hepatitis C, with a cure. Something that was unimaginable just a few years ago. And we're still having that debate on pricing even when it comes to a cure, and I think the reason is it's personal. And there's no question that those Hepatitis C drugs are miraculous, but they're also very expensive. Some of them are $ 1, 000 a pill, and that is what is appalling for not only the politicians in Washington but for the consumers that have to pay them. But that's the issue right? So, one of the companies that did that went out and spent. $ 12 billion plus another few billion dollars to get to that cure. And they're charging roughly the same price for that cure as what the old therapies use to cost. And so, what other industry do you have where you have a major innovation after a company made a massive investment and on any pharmacoeconomic scale or benefit The price of curing Hepatitis today is a good debt for health insurance companies. The problem is the health insurance companies don't want to pay for it and so the patient gets stuck on the short end of the stick, and that's what's so unacceptable. As you know Congress and now even the Justice Department are doing investigations about the high prices of prescription drugs. What changes if any do think is going to come out of that. I don't think a lot. I I think the most important change that will come out of this is attention. And it's good I think for the pricing issue to get attention. There are have there have been bad actors who have really exploited loopholes or situations in the pricing environment and I'm hopeful that this will put A real stop to that. [ BLANK_AUDIO ]

Brent Saunders sits down with Fortune's Susie Gharib to explain.