Objective: To describe pricing decisions, justifications, and attitudes among current and former biotech industry executives for companies that manufacture multiple sclerosis disease-modifying therapies.
Methods: Four leaders in biotech who have been directly involved in multiple sclerosis disease-modifying therapy pricing or marketing volunteered to participate in 30-minute semistructured interviews conducted via telephone. An expert in qualitative methods moderated and analyzed the interviews alongside the principal investigator. Brief, preinterview online surveys were also administered to provide additional context and insight for discussion. Interviews were audio-recorded and professionally transcribed.
Results: Participants consistently stated that initial price decisions were dictated by the price of existing competitors in the market. Revenue maximization and corporate growth were drivers of price escalations in the absence of continued market penetration. Lower revenue predictions outside the United States also informed pricing strategies. The growing complexity and clout of drug distribution and supply channels were also cited as contributing factors. Although decisions to raise prices were motivated by the need to attract investment for future innovation, recouping drug-specific research and development costs as a justification was not strongly endorsed as having a significant influence on pricing decisions.
Conclusions: Contrary to prevailing narratives that underscore drug development costs, findings from our interviews suggest that the existing price ecosystem, overall corporate growth, international pricing disparities, and supply chain-related distortions may play a more central role in drug pricing decision.
© 2019 American Academy of Neurology.