Video: Understanding America’s Prescription Drug Market
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Healthcare Mar 1, 2024

Video: Understanding America’s Prescription Drug Market

A healthcare economist answers questions about pharmaceutical innovation, costs, and more.

A customer uses a prescription drug copay coupon.

Lisa Röper

Based on insights from

Amanda Starc

Back when she used to teach undergraduates, associate professor of strategy Amanda Starc would ask which innovations they would keep if forced to choose: those we’ve made in healthcare over the past 70 years, or those we’ve made in other areas.

“Of course they’d stare down at their phones,” she said. “They’d be like, ‘I want this.’” Healthcare innovation? Not quite so exciting.

But then Starc would put things into perspective. When Dwight Eisenhower suffered a heart attack in 1955, doctors had few effective medications or treatments to offer. So the President of the United States spent seven weeks waiting to recover in the hospital, secret service agents stationed nearby, essentially just hoping for the best.

Today, says Starc, the same heart attack would probably be treated as an outpatient procedure. “We’d put in a drug-eluting stent, we’d make sure you were on some beta blockers, and we’d send you on your way,” she says. “That difference seems quite big, right?”

Her point is that, despite the eye-watering costs associated with healthcare in America, we are still getting a lot of value for our money. Which isn’t to say that we couldn’t be getting even more value—or that, between list prices and net prices and out-of-pocket payments, we even know what we’re paying sometimes.

In a recent The Insightful Leader Live webinar, Starc provided an overview of the American prescription-drug market, explaining why it can be so complicated to get our arms around—even for experts.

She also took audience questions, ask-me-anything style. Wondering why it costs you thousands out of pocket for chemo infusions that can be made in a lab for $2.00? Or perhaps you’re curious why we might be paying too little
for some generics?

Check out the entire webinar below. You can also read more from Starc about how to build a better prescription drug market here.

Featured Faculty

Associate Professor of Strategy

About the Writer

Jessica Love is editor in chief of Kellogg Insight.

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