The drug industry has been frequently criticized for only bringing marginal medical improvements to the market. It is ironic that lifesaving drugs like Gilead Sciences Inc.'s Sovaldi (sofosbuvir) for hepatitis C and Novartis AG's Gleevec (imatanib) for the treatment of chronic myelogenous leukemia (CML) have recently been drawing heavy pricing criticism. That’s because payers feel trapped by the demand for broad coverage while they are struggling with the budget impact that would be the result of such a coverage policy. Some US state Medicaid programs have been criticized over restricting Sovaldi to patients at a later stage of liver disease. These examples illustrate that lifesaving drugs can pose a large problem for payers, as their value creates a very high demand that is ill-disputed and difficult to contain.
The expected emergence of new and expensive treatment technologies in the economically constrained environment is creating a potential “perfect storm”...
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