SPRINGFIELD, Mass. (WWLP) – More new drug approvals indicate innovation in the healthcare industry.
Developing new drugs is very expensive, which drives health insurance costs higher, but Senator James Welch told 22News it’s not the only thing. “Two of the major cost drivers on health insurance in the state, one is implementation of the Affordable Care Act and the second is the price of pharmaceutical drugs,” he said.
The FDA approved 45 new drugs in 2015, one of them, a new cystic fibrosis treatment, costs $259,000 a year.
A panel of legislators and healthcare professionals met in Springfield Tuesday to assess the costs and value of pharmaceutical drugs.
Competition in the marketplace does help reduce the cost of medication, but developing a new drug is still incredibly expensive. On average it takes nearly 10-years and costs $2.6 billion to develop a new drug.
Peter Reinhart worked in the bio-pharmaceutical industry for more than 20 years. He told 22News it takes years to gain FDA approval. “That, in part, explains why when you do have a therapeutic product that actually makes it onto the market, it ends up being expensive, because you’re looking at the end product of 14-years of work on just that program, and nine others like it that failed,” he said.
The Joint Committee on Health Care Financing in Massachusetts is considering a bill to promote transparency and cost control of pharmaceutical drug prices.
Amy Whitcomb Slemmer, the Executive Director of Health Care for All, a Boston consumer advocacy group that helped draft the bill, said right now, there’s little ability for consumers to understand whether they’re paying a fair price for their copay at the pharmacy.
She told 22News this bill would help change that. “They’ll be some expectation that the public would understand, how much money was invested in a drug versus how much money was spent on advertising,” she said.