Don’t get me wrong. The patient always comes first, second and third to me. That is precisely why you need to price this product properly. If you go slim, your penetration in the US and most secondary markets will be reduced. Americans don’t understand this side of the business and are quite frankly bipolar in their approach towards drug pricing. They all have a significant piece of there savings invested in drug stocks and healthcare industry assets and want big returns, but they want us to be charitable organizations at the same time.
You need to assume that in the US you will give 20% of your drug away free and another 20% significantly discounted for people with no and poor insurance coverage. Those are not make believe numbers, those are the base case estimates used. You will also be selling your government business away at a sizable discount, and giving disproportionate share hospitals an even bigger discount. Powerful PBMs/insurers will demand a rebate too. When you wrap it all together in the US your true net price is roughly 40% below WAC. Bare in mind as well, that your business in Slovakia, Greece, etc. operates at a loss when all is factored in because, those business units don’t have to factor in to the development and R&D expenses.
If you want to reach more patients, you need to price high for the well insured in the US. Places like Canada and Britain, well they get away just needing to cover their market costs and as single source payers, they don’t need to factor in free and subsidized drug. All the resources you need to create in the US to deliver your drug for those support programs as well as to navigate through the web of red tape the Evil Empire puts in place to deflate physicians and deny appropriate care cost massive dollars as well.
That price is in the name of maximal reach while still delivering the profit promise that US investors want when it is their 401k, but don’t want when they have to pay $500 per month premiums with an ever increasing deductibles with the possibility of a large copay. In most states that don’t have big powerful insurers like Minnesota and Massachusetts, the company will want to have a copay assistance program in place as well. Interestingly those states don’t allow it and have people fooled into questioning the ethics while they restrict their citizens access. Deduct that from the price you read about in the Boston Globe as well. But call my industry the enemy, meanwhile the hospital/institutions will likely bill $500-600k and actually recover about a 20% average margin as this will be a “buy and bill” product most likely. Of the 11%of healthcare costs associated with drugs, drug companies only take home about 6%. The rest goes to the providers, middlemen, and Evil Empire. Almost none of whom took any risk or any part in the development.
