By Pascal Soriot, Executive Director and Chief Executive Officer, AstraZeneca
AstraZeneca recognizes that rising prescription drug prices and out-of-pocket costs are challenging for Americans. We agree with policymakers that working together, we must urgently address the fact that many patients struggle with the affordability of their drug therapies.
Indeed, patient access and affordability have been guiding principles for AstraZeneca from the start. We have had one of the longest-standing programs in the industry that provides eligible patients with our medicines at no cost; since 2008 we’ve helped more than 4 million people. We also were the first to include affordability language in our television advertising in 2005.
However, we know we need to do more. One of the solutions I highlighted in my testimony at the Senate Finance Committee hearing on prescription drug prices was the need to focus on value, and specifically, on increasing the use of value-based agreements. Value-based agreements tie payer reimbursement for medicines to patient outcomes. When medications do not deliver on the promise of our clinical data, the price to the healthcare system is lower.
During the hearing, I outlined why we think value-based agreements can help transform the pricing and reimbursement system for drugs. We believe this emerging system should be the future standard, and we have been exploring it for several years through innovative approaches that are also now starting to more directly address patient out-of-pocket affordability.
But, what does value mean? For us value is defined in terms of patients, payers, and the health system as a whole. We think value must be considered holistically to determine answers to such essential questions as, are we improving outcomes? Are we keeping patients out of hospitals? Are we improving quality of life? At the same time, we recognize drug therapies cannot bring value unless patients can access their medicines.
Consider how we are approaching one of our medicines for patients who have had a heart attack. We’ve entered a novel and promising value-based agreement with University of Pittsburgh Medical Center (UPMC) Health Plan where reimbursement for this medicine will be connected to cardiovascular outcomes for patients and costs are lower for UPMC Medicare patients.
The agreement reduces out-of-pocket costs for UPMC Medicare patients to $10 for a 30-day supply, and what UPMC pays for the drug varies based on patient outcomes, so that the drug’s price is tied to its clinical performance.
Value-based agreements are still relatively new, and they should not be positioned as a single fix for a troubled US healthcare system; but they are an important step in aligning our system on value versus cost-per-medicine and lowering costs for patients. Yet more must be done to improve the unsustainable system in the US.
The way the healthcare system is set up today, we negotiate with payers and pharmacy benefit managers – including in Medicare Part D - to ensure patients can access our medicines. This is achieved by offering discounts and rebates. Over the past several years, such discounts have increased, yet patients’ affordability concerns have only risen as they’re not benefiting fully from these discounts. We support moving away from the current system of rebates and giving patients the benefit of discounts in the price they pay at the pharmacy counter. AstraZeneca has been forward-leaning in this regard.
There are no easy answers to the challenges we face in healthcare. Ultimately, if we are to be part of the solution, biopharmaceutical companies like AstraZeneca must have the courage to stand behind the clinical value of our therapies in improving patient outcomes and be willing to help shape a system that lowers patient costs while sustaining scientific innovation.