Review | How much of our money do pharma companies deserve for their services?

A few years ago, there was a profound cartoon neatly encapsulating the state of our world. Toro edited it because he considered “value” funnier: “It’s more of a corporatese kind of speak… It sounds like what you would say as part of your deck pitch in a sales meeting or something.” Victor Roy, a practising physician and sociologist and the author of a new book, ‘Capitalizing a Cure: How Finance Controls the Price and Value of Medicines’, might agree wholeheartedly. He recounts being in a policy meeting in Washington, D.C. in 2015 and hearing a public health official say: “These drugs are of high value… They could cost up to $1.4 million and they would still be cost-effective!” Pharmaceutical companies have traditionally cited research and development expenses and the costs of the “risks” involved in biomedical innovation as the major reasons for high drug prices. Roy writes that in the wake of such critiques, the pharmaceutical sector in recent years “has advanced a second rationale: that prices reflect the ‘value’ they bring to health systems and society.” This idea of ‘value’ is that the price of a drug reflects not just the traditional costs of production plus profit margins but also the savings it can bring to society “by averting downstream disease”. Gilead spent a total of $0.88 billion on sofosbuvir research, but just in the first two years of launch, “sofosbuvir-based medicines brought Gilead nearly $46 billion in revenue.” What could be more abominable is that many in the U.S. and around the world – including public health experts, medical practitioners, journalists, and policymakers – have taken this state of affairs to be “natural”.