Merck CEO Kenneth Frazier said drug affordability in America is a “real problem” and he is willing to work with the government to find a solution.
“We want to work with the administration and Congress, both parties, to ensure that patients can have meaningful access to drugs – and affordability is a real problem,” Frazier told FOX Business’ Maria Bartiromo on Tuesday. “The question is, how do we solve the affordability problem for today’s patients without creating a problem in terms of developing the new drugs for Alzheimer’s and other things that tomorrow’s patients need from this industry.”
The Trump administration has proposed a payment model to lower drug costs for patients based on prices paid in other countries. However, in Frazier’s opinion, there are other ways to go about it without destroying the entire health care system and stymieing innovation.
“What would work in this country in my opinion are market based solutions,” he said. “Greater availability, for example, of generic drugs, including biosimilar would lower the cost of drugs tremendously. Changing the value-based systems for payment to ensure we’re only paying for whatever in health care is actually providing value – those are the kind of solutions.”
What’s more, Frazier said new policies on drug rebates is essential.
“About $150 billion in rebates and discounts are being paid into the supply chain,” he said. “We need to change the incentives in the supply chain so that more of that money gets passed on to patients at the actual pharmacy counter.”
President Trump has railed against drug companies and high prescription drug prices. As a result a number of pharmaceutical companies have taken steps to address costs.
In July, Pfizer announced that it would delay scheduled price increases, and Novartis said it would freeze drug prices for the rest of the year.
However at the start of 2019, more than three dozen drugmakers raised the prices of medicines in the U.S., according to Rx Savings Solutions.
Pfizer said despite a list price increases on 41 medications effective January 15th, it plans to maintain the current list of prices for about 90 percent of its medicines.