Fitch: US Drug Pricing Pushback Highlights Need for Innovation

NEW YORK & CHICAGO--(BUSINESS WIRE)-- As the drug pricing debate continues in the US, demonstrating the value of prescription drugs proactively is important for the pharmaceutical industry as a means to defend profitability, according to Fitch Ratings.

There are some initiatives already in place to influence drug pricing that almost exclusively involve private payers or are self-imposed strategies of the pharmaceutical industry. A series of new proposals would likely be largely credit negative and increase pressure on companies to come up with innovative therapies.

Private payers, including pharmacy benefit managers and health insurers, are becoming more influential as they consolidate and attempt to moderate the growth in drug spending for clients. They already utilize a number of tools to influence drug utilization and spending. However, some newer approaches involve transferring some of the financial risk to payers and drug manufacturers by tying reimbursement of a product to a fixed number of estimated patients or to its clinical performance, respectively.

Additional information is available on www.fitchratings.com.

The above article originally appeared as a post on the Fitch Wire credit market commentary page. The original article, which may include hyperlinks to companies and current ratings, can be accessed at www.fitchratings.com. All opinions expressed are those of Fitch Ratings.

Drug Pricing Pushback Highlights Need for Innovation

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=883247

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Source: Fitch Ratings

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