Perspectives: Ariad’s Actions Spotlight Pharma’s Warped Logic On Drug Pricing

Bloomberg: Ariad May Not Be The Last To Feel The Bern
Typically, the discovery that a product is less useful than initially thought does not cause that product's price to rise by more than 70 percent. But that's basically what has happened to Ariad Pharmaceuticals's blood-cancer medicine Iclusig, partly due to the sometimes-warped logic of pharmaceutical pricing. Vermont Senator Bernie Sanders has questioned Ariad's logic in this case, first in an October 14 tweet calling Ariad greedy, which hit the company's stock price by 14 percent. He followed up on Thursday with a letter demanding information about Iclusig price hikes, causing Ariad's stock to fall even further. (Max Nisen, 10/21)

The New York Times: The Pharma C.E.O. Who Wants To Lower Drug Prices
The pharmaceutical industry has been put on the defensive about rising cost of prescription drugs, with some executives called to testify in Congress about price gouging. In a recent interview, Andrew Witty, the chief executive of GlaxoSmithKline, who is retiring in March, talked about prices, epidemics and other health issues. The interview has been condensed and edited. (Vikas Bajaj, 10/21)

Forbes: Binding Arbitration: A Flawed Approach To Tackling Drug Pricing
Addressing high drug prices has become a key priority for American health policy. Both presidential candidates have discussed it, and congressional hearings on the subject have become fairly normal. The question, then, isn’t whether we’ll do something on drug pricing, but what that something will be. On this front, the Center for American Progress (CAP) deserves some credit. Their recent drug price reform proposal takes a big step beyond the usual talking points about drug prices. The authors of the proposal envision a system of “binding arbitration” to mediate high drug prices. The basic idea is to find an alternative to national drug formularies (how most countries control drug prices) while still pushing down drug prices. (Yevgeniy Feyman, 10/19)

Bloomberg: Novartis Shouldn't Play Its Ace Too Soon
Sometimes disappointing shareholders is the friendliest thing a company can do. Novartis has been sitting on a massive $12.8 billion stake in Roche since 2003. The company earlier this year said it was considering selling the stake -- at a premium or not. But Swiss newspaper Sonntagszeitung reported Monday such a sale is on hold, with Novartis reluctant to sell until it can use the cash on a big acquisition. Otherwise, shareholders might just demand Novartis give the cash to them, in buybacks or a special dividend. (Max Nisen, 10/25)

Mother Jones: This Is Why Your Drug Prescriptions Cost So Damn Much
When the Republican-controlled Congress approved a landmark program in 2003 to help seniors buy prescription drugs, it slapped on an unusual restriction: The federal government was barred from negotiating cheaper prices for those medicines. Instead, the job of holding down costs was outsourced to the insurance companies delivering the subsidized new coverage, known as Medicare Part D. (Stuart Silverstein, 10/21)