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Alternative Models Of Differential Pricing For Medicines

Moderator: Tomas J. Philipson
David Meeker M.D. Una Ryan Patricia M. Danzon Hannah E. Kettler: August 12, 2004; Running Time: 55:35

About the Lecture

About the Lecture

Each speaker on this panel proposes a unique approach to the problem of making medicines universally affordable. Dr. David Meeker works in the area of rare diseases. Genzyme’s hormone replacement therapy for Gaucher disease, which affects roughly 30 thousand globally, costs $150k to $200k per year. For patients in nations with poor health care systems, Genzyme discounts the medicine steeply. “Don’t say free drugs,” says Meeker. “We’ll help individual patients as best we can but we’re going to work on developing a health care system in that country that will eventually be able to take over.”

At Avant Immunotherapeutics, Una Ryan’s company tackles new vaccines for travelers, bio-defense, global health and food safety uses. “We’re trying to making vaccines people will actually take: safe, effective, oral, single dose, rapid protection and no refrigeration.” There are enormous development costs involved, which are hard for a small company to shoulder, she says. Perhaps “all developed nations should pay their fair share for pharma R&D…and for developing countries’ drugs,” indexing drug prices to each nation’s GDP.

Patricia Danzon suggests that drug manufacturers sell “products to wholesalers at uniform prices worldwide, then negotiate confidential rebates with final purchasers... This way, the lower prices offered to lower income countries won’t spill over to higher income countries.” Hannah Kettler describes the Gates Foundation’s efforts to invest funds in public-private partnerships to reduce pharmaceutical RD costs. The foundation is also trying to build a fund to cover the costs of vaccinating in developing countries. Our expectation, she says, “is that if we pay the higher prices now, supply will expand and over time the price of vaccines will come down.”

Lecture Details

Location: Wong Auditorium

About the Speakers

Moderator: Tomas J. Philipson

Senior Economic Advisor to the Administrator, Centers for Medicare & Medicaid Services

Tomas J. Philipson is on leave as a professor in the Irving B. Harris Graduate School of Public Policy Studies and a faculty member in the Department of Economics and the Law School at the University of Chicago. He previously served in as the Senior Economic Advisor to the Commissioner of The Food and Drug Administration during 2003/04. Philipson was born and raised in Sweden where he obtained his undergraduate degree in mathematics at Uppsala University. He received his Ph.D. in economics from the University of Pennsylvania and thereafter joined the University as a post-doctoral fellow in 1989, the faculty in 1990, and received tenure in 1998. He was a visiting faculty member at Yale University in the academic year 1994-95, and a visiting fellow at The World Bank in the winter of 2003. Philipson's research expertise is in health economics. He is a Co-Editor of the journal RAND Forums in Health Economics of Berkeley Electronic Press. His research has been published widely in many leading academic journals of economics.

David Meeker M.D.

President, LSD Therapeutics, Genzyme Corporation

Una Ryan

President & CEO, AVANT Immunotherapeutics, Inc. Chair, Massachusetts Biotechnology Council Director, Biotechnology Industry Organization

Patricia M. Danzon

Chair, Health Care Systems Department Celia Z. Moh Professor Professor of Health Care Systems and Insurance and Risk Management The Wharton School of Management, University of Pennsylvania