Expert View: Price strategies: responding to public criticism and Section 602

In our weekly expert view piece Robert Blank, senior consultant at Alliance Life Sciences examines the role of social media in pharmaceutical pricing practices.

While the pharma industry has come under fire for price gouging and high profit margins, it appears that public criticism, as voiced in social media, is beginning to make the biggest impact. In fact, it played a key role in the passage of Section 602 of the Bipartisan Budget Act of 2015, imposing the same inflation penalties for generics as those placed on branded drugs.

It’s important to note that, because generics have historically been a cheaper alternative to branded drugs, it was originally determined that a similar cost-control measure was not necessary. But this has not been the case in practice. In fact, a large proportion of generics have progressed considerably above the rate of inflation in the past several years.