Watch this short video,
from the Wall Street Journal.You may think, well, that’s all very complex, sure, but can’t drug companies just charge … Whatever they want?
Using that logic though, why isn’t Novartis charging $20 million for Zolgensma instead of $2 million? Most would agree it would be unconscionable for health insurance to deny access to the drug, so Novartis should be able to charge $20 million. Or $200 million. But they don’t.
Why not? Sometimes it’s competition that curtails prices. In this case, Novartis has no competition in this market. Today, insurance plans cover the drug; they pay Novartis’ price… But if Novartis charged more than the drug was worth, payors would balk and decide not to cover the drug. The public would be on their side. There would be outrage, and it would be directed at Novartis, not plans that say “you know what, $20 million is too much.”