Business Insight All that pricing and other issues It is very difficult for me, as a doctor and medicine developer, to hear feedback from my patients about the drug prices. Obviously, when we develop and investigate new medication in clinical trials, nobody discusses pricing of the future successful drug. We focus on safety and effectiveness, and it takes 100% of our time. Due diligence during the clinical trials is overwhelmingly extensive and it is just how it should be. We do not want drugs that are not safe and not effective. That said, I must admit that the sticker price of some medication is depressing. It is also depressing that many insurance companies do not want to pay for them. First, insurance companies are very far behind medical science. So, they do not know that some newer medication may work better and faster and, in the long run, be more cost-effective. Secondly, insurance companies take several years to place newer drugs on a formulary and make it covered. presented by Arlington Dermatology What is the reason for all of it? Why are the pharmaceutical companies pricing the new drugs so high? The answer is very simple: because they can. There is no fee schedule or any other rule that would limit or cap the new drug pricing. In Canada or Europe, or Japan, healthcare is social and covered nationally for all. Thus, the national healthcare institutions control the new drug pricing. If the pharmaceutical company comes up with the very high price, the same healthcare safety agency simply does not approve the drug. They negotiate until the price can be reasonable enough to be covered by the social system. Pharmaceutical companies often explain that developing the new drug is very expensive and they must recover that cost. It is true. It is expensive. But there is a lot of waste in that process as well. Often, it seems like nobody really controls the cost of studies either. We see it every day especially when studies are managed by the 3rd party clinical research organizations. These CROS, as they call them, often hire personnel who have no knowledge of clinical aspects of the disease whatsoever. Our time is wasted on explaining over and over why things must be done a certain way. Sometimes, our research patients are better educated about their disease than people who run the study. This kind of a problem, the problem of incompetence and simply greed, can be seen in many other industries. Medical field is more sensitive to discuss because it is about your health, but high pricing is often random and not justified, and not at all a true reason of inflation. A very good example can be found in Home Depot or Menards. Have you visited them lately? The store will say that it is inflation. Well, if there is no competition, the producers can do whatever they want with pricing of materials. Certainly, nobody will tell them not to price it 5 times higher than before. And why, there is no competition? Tariffs did the job. Normally, exported from other countries, some of the building materials are only domestic because prices of transporting them and paying tariffs exceed the possible return of the cost. When tariffs were put in several years ago, we could have and should have expected just that. Our clinic experiences exactly the same concept with medical supplies. It is not easy. So, what to do about it? I guess the boring answer is vote. Vote and be voiceful with your local representation. The more voices are loud and clear, the better the message will be heard. Michael Bukhalo, MD Arlington Dermatology 5301 Keystone Court Rolling Meadows, IL 60008 Tel. 847 392 5440 | www.arlingtondermatology.net Business Insight All that pricing and other issues It is very difficult for me , as a doctor and medicine developer , to hear feedback from my patients about the drug prices . Obviously , when we develop and investigate new medication in clinical trials , nobody discusses pricing of the future successful drug . We focus on safety and effectiveness , and it takes 100 % of our time . Due diligence during the clinical trials is overwhelmingly extensive and it is just how it should be . We do not want drugs that are not safe and not effective . That said , I must admit that the sticker price of some medication is depressing . It is also depressing that many insurance companies do not want to pay for them . First , insurance companies are very far behind medical science . So , they do not know that some newer medication may work better and faster and , in the long run , be more cost - effective . Secondly , insurance companies take several years to place newer drugs on a formulary and make it covered . presented by Arlington Dermatology What is the reason for all of it ? Why are the pharmaceutical companies pricing the new drugs so high ? The answer is very simple : because they can . There is no fee schedule or any other rule that would limit or cap the new drug pricing . In Canada or Europe , or Japan , healthcare is social and covered nationally for all . Thus , the national healthcare institutions control the new drug pricing . If the pharmaceutical company comes up with the very high price , the same healthcare safety agency simply does not approve the drug . They negotiate until the price can be reasonable enough to be covered by the social system . Pharmaceutical companies often explain that developing the new drug is very expensive and they must recover that cost . It is true . It is expensive . But there is a lot of waste in that process as well . Often , it seems like nobody really controls the cost of studies either . We see it every day especially when studies are managed by the 3rd party clinical research organizations . These CROS , as they call them , often hire personnel who have no knowledge of clinical aspects of the disease whatsoever . Our time is wasted on explaining over and over why things must be done a certain way . Sometimes , our research patients are better educated about their disease than people who run the study . This kind of a problem , the problem of incompetence and simply greed , can be seen in many other industries . Medical field is more sensitive to discuss because it is about your health , but high pricing is often random and not justified , and not at all a true reason of inflation . A very good example can be found in Home Depot or Menards . Have you visited them lately ? The store will say that it is inflation . Well , if there is no competition , the producers can do whatever they want with pricing of materials . Certainly , nobody will tell them not to price it 5 times higher than before . And why , there is no competition ? Tariffs did the job . Normally , exported from other countries , some of the building materials are only domestic because prices of transporting them and paying tariffs exceed the possible return of the cost . When tariffs were put in several years ago , we could have and should have expected just that . Our clinic experiences exactly the same concept with medical supplies . It is not easy . So , what to do about it ? I guess the boring answer is vote . Vote and be voiceful with your local representation . The more voices are loud and clear , the better the message will be heard . Michael Bukhalo , MD Arlington Dermatology 5301 Keystone Court Rolling Meadows , IL 60008 Tel . 847 392 5440 | www.arlingtondermatology.net