Patient Access Metrics Matter

Martin Shkreli explains how drug pricing and healthcare access is more complex than media portrays, focusing on actual patient impact versus headline prices.

Key Points About Drug Pricing Impact

• Price increases don't necessarily reduce patient access

  • Insurance companies cover drugs regardless of price if medically necessary
  • Cost of not covering drug (patient death/complications) exceeds drug cost
  • Example: Daraprim still covered by all insurers despite price increase

• Healthcare Cost Distribution

  • 90% of costs come from physicians/healthcare workers
  • Only 10% comes from pharmaceutical costs
  • Focus on drug prices misses larger cost drivers

Insurance Company Decision Making

• Small volume drugs (<0.1% of budget) get minimal scrutiny

  • Automated approval processes handle these
  • Focus more on high-volume drug policies
  • Example: Getting patients to switch from insulin to metformin

• Coverage Decisions Based On:

  • Total cost impact to insurance company
  • Alternative treatment costs
  • Patient outcomes and complications
  • Volume of prescriptions

Drug Development Economics

• Research & Development

  • Need significant profit potential to justify investment risk
  • Many drugs fail in development
  • Success must offset costs of failures

• Pricing Strategy Considerations

  • Alternative treatment costs
  • Patient population size
  • Development costs
  • Market dynamics
  • Insurance company policies

Healthcare Industry Dynamics

• Utility Theory of Price

  • Price based on value to user
  • Consider alternative treatment costs
  • Factor in complications/death costs

• Industry Knowledge Gap

  • Public lacks understanding of healthcare economics
  • Media focuses on price rather than access
  • Complex reimbursement systems obscure true costs

The key metric should be patient access to medication, not the price alone. Price increases that don't impact actual patient access may be justified by development costs and healthcare economics.