Patient Copayments Not The Solution For Drug Pricing

23 July 1995

Pharmaceutical companies are frustrated by the impasse between them and health care purchasers over the subject of drug pricing. Without the freedom to set the prices they feel their products merit, drug companies fail to see how they can recover the investment in R&D, according to a new report from Datamonitor, From a Product to a Consumer Focus - the Future for Sales & Marketing (available through the Marketletter).

Drug purchasers believe the only way they can control spending is by using pricing formulas which regulate against hugely expensive medical interventions. While one formula which has found favor with some in the industry is the type which incorporates an element of patient copayment, Datamonitor says the use of a pricing formula which allows patient copayment could be seen as a method for addressing the concerns of both the drug companies and the health care providers.

Moreover, it notes, governments and health insurers could cut their expenditure by reducing the proportion of the drugs bill for which they pay, and the additional contribution by patients would allow drug manufacturers to maintain relatively high prices and safeguard profitability. In addition, copayment would encourage more rational thinking by patients over the subject of health care and result in patients behaving like consumers in other industries in having an interest in the cost as well as the quality of medical treatment.

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