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Biotech industry Can’t Sidestep Cost-Effectiveness Anymore

Posted on 04 April 2012

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Back in the old days of biotech industry, the business was pretty straightforward.

You’d craft your scientific idea, aim a new drug at patients in need, charm investors to give you some money, run bang-up clinical trials, win FDA approval. Do all that, and you’re good as gold. Charge insurers whatever the market will bear, and count the money.

That model worked for a long time, but there’s another hoop everyone needs to jump through now, and I’m not sure everyone in the industry has fully come to terms with it. No matter what happens with President Obama’s healthcare reform in the Supreme Court or Congress, there are forces now that limit what society will pay for new drugs.

We don’t have actual price controls in the law, but the pressure to wring costs out of the $2.6 trillion U.S. healthcare system is intense and will only grow as the baby boomers get older. Drugmakers can’t duck and hide from this issue anymore.

By Luke Timmerman

Read the full article at Xconomy

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