Addressing Pharmaceutical Costs: The Need for Greater Transparency and Improved Accessibility

While pharmaceutical research continues to yield groundbreaking advancements and potential cures, significant barriers to access remain. Despite an annual expenditure of over $800 billion on pharmaceuticals, a substantial number of Americans are unable to obtain the essential medicines they require.

“It is unacceptable that between a quarter and a third of adults are forced to skip or ration their medications due to high costs,” stated Jay Rughani, a partner at Andreessen Horowitz. “This trend is placing increasing pressure on demand, employers, payers, and governments as they struggle to find ways to make these medications affordable.”

Rughani provided these insights while moderating a panel on drug costs during MedCity News’ Bullseye conference in Chicago. The panel featured Tanvi Patel, VP and GM at Amazon Pharmacy; AJ Loiacono, CEO of Judi Health; and Annie Collins, Chief Commercial Officer at Aradigm Health.

Patel identified several friction points that impede medication accessibility. For instance, in Seattle—Amazon’s headquarters—downtown areas are often “pharmacy deserts,” where patients may have to travel ten miles and dedicate an hour just to collect a prescription. This inconvenience frequently leads to non-adherence. Additionally, a lack of price transparency remains a major hurdle, as consumers often do not know the cost of their medication until they reach the pharmacy counter.

Loiacono suggested that the lack of transparency is often systemic. When pricing remains opaque, consumers frequently overpay. He described the current landscape as a tug-of-war between drug manufacturers and payers. He noted that the U.S. government is the largest payer, yet it faces varying pricing structures across the 340B program, Medicare, Medicaid, the Department of Defense, and the Veterans Administration.

Much like Amazon’s efforts to increase transparency in retail, the company is working to improve visibility in pharmaceutical pricing. Patel explained that when consumers have more choices, companies are incentivized to offer better pricing and improved experiences. Some patients are already seeing increased choice through direct-to-patient channels, such as Eli Lilly’s LillyDirect, which utilizes dispensing options like Amazon to facilitate transactions.

Amazon also participates in TrumpRx, a platform established by the Trump administration that lists prices for certain generic and branded medications. However, Patel noted that TrumpRx focuses on cash prices, even though fewer than 10% of Americans pay for their prescriptions in cash.

Collins observed that complexity exists throughout the entire system, even within the most expensive treatments. Aradigm manages a benefits platform for cell and gene therapies—treatments with curative potential. Collins noted that price transparency and consumer choice are often absent in this sector because cell and gene therapies are typically covered under medical benefits rather than pharmacy benefits.

In some instances, a physician’s choice of therapy can be unexpected. Collins cited Casgevy, a Vertex Pharmaceuticals gene therapy for sickle cell disease, which competes with Gentix Biotherapeutics’ Lyfgenia. Despite Casgevy demonstrating superior clinical outcomes and a cost that is $900,000 lower, many doctors continue to select Lyfgenia. Collins attributed this to doctors opting for the therapies they were originally trained to administer during clinical trials.

With approximately 2,000 cell and gene therapies currently in development, many of which target diseases with no existing treatments, Collins questioned the sustainability of list prices reaching into the millions of dollars. She urged pharmaceutical companies to engage in pricing discussions before products launch, rather than after.

Photo: grThirteen, Getty Images

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