How to fight pharma's pricing scandals? Try an ad showing drugs save medical costs

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BIO's new Innovation Saves ad features Bill Remak, who was saved from needing a third liver transplant thanks to viral inhibitor medicines for hep C.

Allergan ($AGN) CEO Brent Saunders wrote Tuesday that developing new meds that save money is part of pharma’s “social contract.” Coincidentally or not, the Biotechnology Innovation Organization (BIO) started touting that savings in an ad campaign released at the same time.

“The cheapest way to treat a disease is to cure it,” BIO President and CEO Jim Greenwood said in announcing the new campaign, the association’s latest attempt to refute drug-pricing critics.

The group’s “Innovation Saves” website features patients and their families talking about lifesaving treatments that also happened to save money for the healthcare system. 

For the drug industry, this sort of argument goes beyond public opinion and politics. Drugmakers have been using similar evidence to persuade payers to cover their products. Novartis ($NVS), for instance, has generated cost-effectiveness data on its heart failure drug Entresto, aiming to prove that using the medication will save the healthcare system money on expensive hospitalizations.

The Swiss drugmaker has struck several results-based payment deals with insurers, pegging rebates on the new med to real-world hospitalization numbers. The cost argument is important, because standard treatments for heart failure are cheap generics.

The first in a series of Innovation Saves ads mentions a patient who might have needed a third liver transplant--a very expensive endeavor--if he hadn’t been treated with drugs that use viral inhibitor technology.

Those would be the new generation of hepatitis C drugs from Gilead Sciences ($GILD), AbbVie ($ABBV), Bristol-Myers Squibb ($BMY) and Merck & Co. ($MRK). Gilead, you’ll recall, priced its first-in-class meds Sovaldi and Harvoni at $84,000 and $94,500 per treatment course, a move that incensed patient advocates and put payers on the defensive as they tried to limit spending.

Gilead has always maintained that the drugs are worth their cost because they cure the disease in most patients--which saves money on future hospitalizations and, yes, liver transplants.

“[A]dvances in biopharmaceutical medicines have lessened the need for hospital stays,” a voice-over on the BIO ad says. “They are reducing the number of surgeries, and for many they are delivering cures.

“So along with saving, extending and improving lives, these remarkable innovations can help save healthcare costs.”

Examples include $173 billion saved in cancer costs, the campaign website contends. There were also 883,000 fewer hospitalizations per year. And a 90% cure rate for hepatitis C. The organization is spending “low- to mid-seven digits” on the ads, or about $1 million to $5 million, Crain’s Chicago reports.

The cost-saving angle is a new twist for BIO’s image campaign, launched earlier this year as drug-pricing criticism continued to mount. Now that back-to-school shopping--and a Mom-based social media eruption--has put EpiPen’s repeated price increases under an unwelcome spotlight, the group has even more reason to make its case.

Meanwhile, Pfizer ($PFE), one of the world’s biggest drugmakers, has been running image ads that highlight a new treatment’s long journey from idea to medicine chest. The TV commercials feature scientists at work, with a voice-over citing impressive numbers on the time and money spent on drug R&D.

And PhRMA has its own campaign working, with a slightly different audience in mind; the pharma trade and lobbying organization is targeting lawmakers. For good reason: Both presidential candidates back new price negotiation powers for Medicare--long anathema to the drug industry--and Democrat Hillary Clinton released a pricing-oriented plan last week with a slate of other measures. Congress would have to enact the proposals, of course, but with public pressure at a new high, even regulation-averse lawmakers may feel compelled to do so.

Whether these industry-backed campaigns will make a difference to an angry public remains to be seen. But as one pricing scandal follows another--and the next drug to come under the spotlight anyone’s guess--expect the ads to continue.

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