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Mylan’s EpiPen continues making news, prompting patients to compare drug prices. They look at the prices in Canada, our closest neighbor, and they wonder why the prices here are two to three times higher for the same product. It is both dramatic and unsettling.  The pharmaceutical industry answer is “it’s complicated.”

Yes, it is complicated.  For example, we’ve heard the argument about how Canada is single payer system and the U.S. is not.  It’s true and it contributes to higher prices.  But drug pricing doesn’t have to be this hard.  Here are three concrete steps that the pharmaceutical industry could take right now to improve things.

Take the Pledge

Allergan’s CEO, Brent Saunders has pledged that his company will not engage in price gouging or predatory pricing. [1]  He also pledged that Allergan will set prices based on product value.  All pharmaceutical companies should take the pledge.

Be Transparent

The pharmaceutical industry has lots of excuses why it can’t be transparent about how prices are set.  Chief among them is that pricing is a “trade secret.”  Rational people don’t expect companies to disclose true secrets. But there are ways to increase transparency.  For example,a company could state that it sets prices to recover development costs and provide a certain maximum margin.  External company auditors could make sure the company “walks the talk.”  This is just one example. I’m sure  other smart people out there can find more.

Stop Treating Patients, Physicians, Regulators and Critics Impersonally

Pharma’s pricing crisis, in many ways, is a self-inflicted wound.  By refusing to have constructive conversations about this important topic, the industry has treated patients, physicians, regulators, and critics impersonally.  Whether intentional or not, it is demeaning and counter-productive.  It’s time that the industry stepped out of the shadows and started having honest and thoughtful conversations on drug prices with everyone who is impacted.

The pharmaceutical industry often bemoans its negative image.  It is at a crossroads and if the industry starts with these three steps, I believe it can repair the damage and start being viewed in a positive light. The time to start is now.



 [1] See Seth Whitelaw, Pharma Pricing & One Bold CEO, Whitelaw Compliance Group Blog (Sep. 6, 2016) at