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Why is Drug Pricing So Complicated?

19 July 2019

In 2017 the US spent an estimated 450 billion dollars on prescription drugs, about 12% of the total healthcare spending. With public and political uproar surrounding the life sciences industry pricing practices, we ask “why is drug pricing so complicated?”. In this episode, we’ll discuss drug pricing and, more specifically, explore the question of why prices are so high. The panel will discuss why drug pricing is so complicated and why proposed efforts to drive down costs may have unintended and undesired effects.


Mike discussed a recent episode of the Verdict podcast in which they discussed a recent study regarding a machine learning algorithm that is able to predict heart attacks and death from heart disease with 90% accuracy, overtaking human practitioners.


Mindy discussed an article in Health Affairs entitled “The Administration’s Drug Rebate Reforms: Four Implementation Questions That Will Influence Whether Drug Costs Fall”. The article focused on the impact that the Blueprint has on Medicare Part D plans, disruption of Part D enrollment, how CMS ensures point of care discounts and whether Medicaid recipients will receive any benefit.


Ryan highlighted a Rueters article about the higher likelihood of physicians recommending cancer screenings during morning appointment times.


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