Drug Prices to Drop Regardless of U.S. Vote Outcome, Witty Saysby
Glaxo CEO sees U.S. price pressure driven by accountable care
EMA would ideally remain in London after Brexit, Witty says
Pressure on drug prices in the U.S. will continue regardless of who wins the presidency, the chief executive of the U.K.’s biggest drugmaker said.
GlaxoSmithKline Plc has seen a 2 percent dip in net prices in the U.S. this year, and expects further reductions driven by payer and hospital consolidation, Chief Executive Officer Andrew Witty said Tuesday in an interview with Francine Lacqua on Bloomberg Television. Increasing ties between reimbursement and patient outcomes will also play a role, Witty said.
“A lot of people fixate on the political dimension and what might happen,” Witty said. “It’s also important to remember that the marketplace has itself put in tremendous mechanisms to ensure it gets good value for money.”
Drug prices have been a hot topic for U.S. presidential candidates in this year’s election, with Democrat Hillary Clinton making it a cornerstone of her platform. Manufacturers of drugs ranging from specialized treatments to mass-market generics have come under scrutiny over price increases. Witty took the stance that drug costs would come under pressure when he became Glaxo’s CEO almost a decade ago, and decided to diversify the business into emerging markets and consumer goods like toothpaste -- a move that didn’t sit well with some investors.
In the last two or three years, purchasers have bulked up through deals, and more accountable-care organizations have cropped up to demand value for money, Witty said. In addition, the U.S. Centers for Medicare & Medicaid Services in March proposed a demonstration project that aims to change how Medicare reimburses prescribing doctors and to reduce costs for outpatient medicines. The demonstration emphasizes value-based purchasing strategies such as indication-based pricing, reference pricing and clinical decision support tools.
Drugmakers could see the introduction of more cost-reduction projects in the U.S. like the Medicare one, Witty said.
“They’re going to be key features in the future,” he said. “It’s going to become even more important for companies to demonstrate that they have innovation.”
Glaxo also faces upheaval at home, with the U.K. preparing for an exit from the European Union after a referendum in June. The European Medicines Agency, the bloc’s drugs regulator, should remain in London, Witty said.
“There will be tremendous disruption from its physical movement,” Witty said. “This is a regulator who is keeping an eye on the health and safety of hundreds of millions of Europeans. You don’t want them with their eye off the ball.”