Despite the general consensus among consumers and politicians that drugs in the U.S. are priced too high, Mr. Kolassa says he has nothing to apologize for.
“One of the problems we have in healthcare is that nobody wants to pay for the actual value,” Mr. Kolassa told Bloomberg at Medical Marketing Economics, a consulting firm he helped found, of which Valeant Pharmaceuticals International was a client. “I wish drugs would fall out of the sky free. Don’t we all.”
Mr. Kolassa sold his interest in MME last year to focus more on music, but it was that he previously proposed the idea that a drug’s price should reflect its value to society. According to Bloomberg, the “Kolassa theory” suggests that drug companies should charge a premium for products that will not only benefit the patient, but the economy as well, by keeping people out of hospitals and enabling them to live productive lives. A drug’s price should also include a profit margin that can finance discoveries of other medications.
“If you are asking me if I am ashamed of what I am doing, not at all, I am damn proud of it,” said Mr. Kolassa, according to the report. “I would rather have these apparently costly drugs and keep people alive than not have them.”
In his 2009 book The Strategic Pricing of Pharmaceuticals,” Mr. Kolassa wrote of drug-price elasticity: “It is theoretically possible to set a price that is too high. We have yet to identify such a situation in the U.S. market.”
Instances such as Martin Shkreli’s decision to hike up a drug acquired by Turing Pharmaceuticals have proved him wrong. Mr. Kolassa called that maneuver “egregious,” and said there are limits to raising prices, as evidenced by “drug flippers,” or companies that acquire drugs just to jack up the prices. However, most companies function as they should and price their drugs appropriately, Mr. Kolassa said.
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