Drug company execs complain they're so misunderstood

A cloud revenue management company survey asked pharma execs about drug pricing and how it's communicated to the public. Oh, the whining. Can technology help?
Written by Chris Matyszczyk, Contributing Writer

Pharma execs wish you understood their pain.

Image: A.Khoruzhenko

I don't understand why some drivers refuse to wave a "thank you" when you let them through on a narrow road.

So I'm hardly likely to understand the subtle nuances of America's exorbitant health care costs, and specifically its pricing of drugs.

I was moved, however, by a survey that suggested my confusion isn't solitary.

Cloud revenue management company Model N -- cheery slogan: "Revenue Management Solutions to Maximize Every Revenue Moment" -- asked 100 pharma executives to reveal how they'd like their own lives to be improved.

The results increased my heart rate.

You see, a hearty 86% of respondents offered that there's a "disconnect" between drug companies and real human beings as to the perceptions of drug pricing.

I instinctively imagine that pharma companies' perception revolves around the joy of pricing an exclusive drug so high that they can gorge on the profits. I imagine real people's perception revolves around the anger of drugs being priced so high that it can bankrupt them.

Please, I grew up in a country where you knew that, if you fell ill, you had a National Health Service that would look after you. So health policy governed entirely according to the money gods has always seemed disturbing to me.

Current President Donald Trump insists he's going to lower drug prices with the cursory wave of an executive order. This survey suggests it may not be so simple.

Seventy-six percent of these pharma execs insist the public -- and, presumably, the president -- doesn't understand the glorious complexity that lurks behind the payment for drugs and how those drugs get to those who need them.

This survey suggests drug company execs are worried about revenue. Forty-one percent angst about government regulations. A similar 41% worry about pricing and rebates. 46% insist that the pandemic has made it more difficult to get drugs to market. I'm guessing they may not produce Remdesivir.

Naturally, I asked Model N how its revenue moment-enhancing capabilities could help make this painful situation any better.

The company told me: "Technology can assist by providing solutions that allow manufacturers to better manage their contracting, rebates, chargebacks, discounts, and more. In this industry, there is a big difference between gross revenue and net revenue due to the complexity."

But how did such complexity happen? Might some people worry it's deliberately built in to make the whole system opaque -- and absurdly profitable for a few? Might some never be able to forget Martin Shkreli and his blissfully overt methods?

Model N's VP and GM of Life Sciences, Melonie Warfel, believes technology can also have "a potential effect in terms of illuminating the conversation around drug pricing and how organizations can message and communicate around these issues." 

I worry. I'm not sure any technology can make real people understand why they're paying so much more for drugs than do Canadians.

Still, Model N insists its technology can help the public understand what's going on.

Warfel told me: "The complexity behind how a drug goes from the manufacturer to the patient is not well known by the public and the perception is that high prices are tied to the manufacturer. By having technology in place that provides visibility into this for manufacturers' products, it allows them to respond to the public when issues around high drug prices come up."

I asked Model N for more detail as to why US drug prices are so high. There wasn't a single, simple answer.

There was a finger pointed at the number of players involved -- the manufacturer, wholesalers, pharmacies, and pharmacy benefit managers. There was a muttering about Medicare not being able to negotiate prices. There was a suggestion that because pharma companies can advertise to consumers, the cost is built into the pricing.

One element, though, resonated: "In the US we allow manufactures to set their price. We don't have price controls in place. In other countries, governments regulate how much a product can cost."

I'm naive enough to believe that a healthier country ends up being a wealthier country.

In this case, however, it seems technology can only improve the mechanics, not the principles of engagement.

As long as drug companies can set their own prices, they will. And they'll still feel misunderstood.

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