Prescription Drug Costs: Trends and Tradeoffs in the Pipeline from Lab to Market

September 18, 2015


Innovative drugs have brought about significant progress in treating costly and complex conditions. While there is agreement among many stakeholders that some of these breakthrough drugs have had a positive impact on Americans’ health and life expectancy, increasing prices have also caused some confusion about the methods by which drug prices are determined. The goal of this briefing was to discuss recent prescription drug price trends, as well as demystify the pricing process. It identified contributors to the rising prices of many drugs, including shareholder interests and R&D costs, in addition to explaining possible future pricing-related challenges for manufacturers, providers, and consumers.

If you were unable to attend the briefing, here are some key takeaways:

Richard Evans, General Manager, SSR Health LLC
One fifth of U.S. drug spending is done by households that spend the same amount on housing as they do on out-of-pocket prescription drug costs, Dr. Richard Evans stated. If patients continue to be required to pay higher prices for their medications, many won’t take them, he added.

Michael Gray, Vice President and Chief Strategy Officer of The Resource Group, Ascension Health
Drug companies are increasing prices for long-standing, brand-name pharmaceuticals and generics, Michael Gray said. For example, Miacalcin, which has been on the market for 29 years, experienced a 3,033 percent increase in price between 2014 and 2015. These increases threaten patients’ access to high-quality, effective care, he concluded.

Lori Reilly, Executive Vice-President for Policy & Research, Pharmaceutical Research and Manufacturers of America (PhRMA)
Approximately 90 percent of drugs that enter FDA clinical trials are never approved, Lori Reilly explained. In fact, over 123 attempts were made in order to get four new Alzheimer’s drugs to the market, she pointed out. She said the R&D costs of both the successes and the failures need to be accounted for when pricing products.

Len Nichols, Director, George Mason University Center for Health Policy Research and Ethics (CHPRE)
Both competition and innovation are critical to the pharmaceutical industry, but patent and exclusivity protections make it more difficult for new competitors to enter the market, ultimately favoring innovation, Len Nichols said. He suggested using public capital to pay for stage 2 and 3 clinical trials, thereby lowering the amount of investment a pharmaceutical company has to make, and in turn lowering the price required to recoup initial R&D costs, as a policy answer to this problem.

Ed Howard of the Alliance for Health Reform moderated the panel discussion.

Follow the Briefing on Twitter: #DrugCosts

Contact: (202)789-2300 or

The event was sponsored by the nonpartisan Alliance for Health Reform, with support from Ascension Health.
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Full Transcript (Adobe Acrobat PDF)

Speaker Presentations

Richard Evans Presentation (Adobe Acrobat PDF)
Michael Gray Presentation (Adobe Acrobat PDF)
Len Nichols Presentation (Adobe Acrobat PDF)


Event Details

Agenda (Adobe Acrobat PDF)
Speaker Biographies (Adobe Acrobat PDF)

Event Resources