The Proposed Rule & Pharmacies...Or Your Thoughts

Good morning and Happy Friday Everyone!

I read a great article this morning from New Jersey's Star Ledger and have placed a call to the author, Robert Cohen, for permission to reprint the article in its entirety. For the time being, you can find it at the following link:

http://www.nj.com/starledger/stories/index.ssf?/base/business-0/1182660232165940.xml&coll=1

To briefly sum it up, the article discusses the impact that CMS's Proposed Rule is going to have on Pharmacies and, further to this, generic drug manufacturers. CMS has admitted that 90% of the savings of the Rule will come from Pharmacists and the other 10% from generic drug manufacturers.

The major worries of the Pharmacy industry pertain to the notion that the Rule will have the largest impact on druggists in low income areas --- where Medicaid is most prevalent. Pharmacy organizations fear that this will drive some of its members out of business and there is also the thought that it could end up costing the Government and States MORE in some instances because Pharmacist's will opt out of prescribing lower-cost generic drugs and opt in favor of brand name drugs for the increased reimbursment.

So how about we have a healthy Proposed Rule discussion on this dreary Friday morning in the Northeast... We can hit on this topic or you can go on a tangent --- that's the beauty of the Pharma Compliance Blog.

Eagerly awaiting July 2nd,

CIS Moderator

Blog Topic of The Week: A GP Community Member Seeking 340B Information - Inpatient vs. Outpatient?

A GP Community Member writes:

We participate in the 340B program but do not voluntarily offer our products at 340B pricing for inpatient use. However, we have been noticing an increasing level of 340B purchases on drugs normally used in an inpatient setting. Thus, we are interested to know what experiences others have had and what information may be available to determine what hospitals consider inpatient usage verses outpatient.

Please share your thoughts to this, completely anonymously if you wish, by clicking on "POST YOUR THOUGHTS HERE" at the bottom of this post.

If you'd like to post a topic, please email me at stevenmoore@cis-partners.com

Billy Tauzin: "No one should have to play Russian Roulette with their health."

Washington, D.C. (June 25, 2007) —Concerned about a growing number of fake and counterfeit drugs entering America, the Pharmaceutical Research and Manufacturers of America (PhRMA), along with several patient and advocacy groups, today released key findings from a PhRMA-sponsored survey that reveals some common characteristics and behaviors of Americans who are importing medicines from foreign countries.

The PhRMA survey found that a significant number of American adults have recently purchased medicines from a foreign country. Half of those surveyed are buying their drugs in another country because they lack a doctor’s prescription. What’s more, the survey found that antibiotics and pain relief medicines are, in most cases, the typical medications American consumers seek from other countries.

“This study further confirms what the Food and Drug Administration has been saying all along – millions of Americans are circumventing the system and going to other sources to buy their medicine because they do not have a doctor’s prescription for the medicine they want,” said Billy Tauzin, President & CEO of PhRMA. “Alarmingly, this behavior increases an individual’s risk to being exposed to dangerous counterfeit medicines.”

Other key findings include: one in five Americans importing drugs earn more than $100,000 annually; importers are more likely to be under the age of 35; and 85 percent of Americans importing drugs have insurance with prescription drug coverage.

PhRMA was joined by The Partnership for a Drug-Free America, the Center for Pharmacoeconomic Studies at the University of Texas College of Pharmacy and the Men’s Health Network to help raise awareness of the safety issues concerning imported prescription drugs.

Commenting on the survey’s findings, Sean Clark, Executive Vice President with the Partnership for a Drug-Free America said, “We are very concerned about the availability and use of medicines without a doctor’s prescription. Internet savvy teens know it is as easy to obtain an abusable prescription drug from a rogue online pharmacy as it is to go shopping or download a song. Parents need to educate themselves about this behavior and communicate the risks to their children.”

“The study disputes popular belief that Americans mainly purchase life-style drugs from foreign countries, when in fact, the majority of drugs purchased are to treat chronic ailments,” added Marv Shephard, Ph.D., Director, Center for Pharmacoeconomic Studies at the University of Texas College of Pharmacy. “What is troublesome is that many drugs are purchased without a prescription, which may mean patients are not under the care of a licensed health care provider.”

Concerned about the risks importation poses to American patients, Scott Williams, a Director with the Men’s Health Network, said, “The importation of prescription drugs exposes many Americans to the dangers and deception of counterfeit products. The risks far outweigh the supposed cost savings for American consumers.”

Tauzin concluded, “American patients deserve peace of mind that their medicines are safe and effective. Nobody should have to second-guess whether or not their medicines are real or fake. No one should have to play Russian Roulette with their health.”

More information about this survey can be found on http://www.phrma.org/files/Importation Poll Findings.pdf.

We Re-visit the OIG Guidance: Anti-Kickback Statute

Some thought for this early Tuesday AM --- we revisit the OIG's Compliance Program Guidance for Pharmaceutical Manufacturers and the Anti-Kickback Statute...

"Identify any remunerative relationship between itself (or its representatives) and persons or entities in a position to generate federal health care business for the manufacturer directly or indirectly.

Determine whether any ONE purpose of the remuneration may be to induce or reward the referral or recommendation of business payable in whole or in part by a federal health care program

- Does the arrangement or practice have a potential to increase costs to the federal health care programs, beneficiaries or enrollees?

- Does the arrangement or practice have a potential to increase the risk of over utilization or inappropriate utilization?

- Does the arrangement or practice raise patient safety or quality of care concerns?"

Major Pharma Companies Fined for "unfair and deceptive trade practices"

"U.S. District Judge Patti Saris in Boston on Thursday ruled that AstraZeneca, Schering-Plough and Bristol-Myers Squibb engaged in unfair and deceptive trade practices related to the prices of some their medications, Dow Jones/Boston Globe reports (Dow Jones/Boston Globe, 6/22). Saris dismissed similar allegations against Johnson & Johnson. The decision affects patients who paid for certain medications from December 1997 to 2003 (Dow Jones/Newark Star-Ledger, 6/22)."

In a 183-page decision, Saris wrote, "The Medicare statute itself created a perverse incentive by pegging the nationwide reimbursement for billions of drug transactions a year to a price reported by the pharmaceutical industry, thus putting the proverbial pharmaceutical fox in charge of the reimbursement chicken coop. The different pharmaceutical companies unfairly took advantage of the system by setting sky-high prices with no relation to the marketplace."

In fact, the language got even harsher: She wrote, "Unscrupulously taking advantage of the flawed AWP system ... by establishing secret mega-spreads far beyond the standard industry markup was unethical and oppressive," adding that such practices "caused real injuries to the insurers and patients" who paid the inflated prices (Wall Street Journal, 6/22).

This certainly begs the question of how your company is dealing with the use of ASP rather than AWP as established in 2003? How have the changes affected the way in which you run your business and every day activities?

With three large pharmaceutical companies targeted, one wonders if it will not stop here given the 'perverse incentive' that was formerly in place and the harsh language used to describe the activities.

Thoughts?

CMS Timeline Generates AMP Calculation Concerns

We received a great comment/question from an anonymous user yesterday and felt that it was important enough to make today's post.

"Does anyone else see the issue of starting the monthly calculations in September under the new rule, but doing the third quarter calculation (which includes September) under the old rule?! Operationally, in October manufacturers would have to calculate a monthly AMP and quartely AMP under two different methods. This is problematic from a systems perspective and creates additional work. We are trying to get the word to CMS on this issue to at least delay the monthly start under the new rule to October. It would be great if other manufacturers could also see if they could get a comment into CMS on this."

Blog Topic of the Week: CMS Publishes Final Rule Timeline

PhRMA Supports G-8 Call for Additional Government Assistance for Africa

Pharmaceutical Research and Manufacturers of America President and CEO Billy Tauzin issued the following statement after the announcement today at the G-8 summit on the availability of medicines to Africa.

“We welcome the G-8 Summit Declaration on Growth and Responsibility in Africa which makes clear that African countries are dealing with troubling and unique economic and disease burdens that hinder their development. We support the initiatives dedicated to helping the patients of these countries get the care they need.

“As the G-8 points out, responsibility for helping African countries to overcome their challenges lies with all members of the international community – including those with emerging economies, that the G-8 encourages to act “as responsible stakeholders in the international system” by playing a role in the global effort to help Africa’s disadvantaged countries.

“PhRMA member companies take seriously the need to assist African countries; to that end, they have established and participated in a number of initiatives to provide medicine to the poor, with particular emphasis on first and second line medicines that treat HIV/AIDS. For example, the Accelerating Access Initiative is a partnership between seven pharmaceutical research companies and five United Nations entities (UNAIDS, the World Health Organization, World Bank, UNICEF and the United Nations Population Fund). Since 2000, AAI has combined pharmaceutical industry knowledge with the experience of its partners to create practical, long-term solutions that help to improve access to HIV health care in resource-limited countries. The success of AAI demonstrates the importance of similar programs. By the end of September 2006, more than 738,000 people living with HIV/AIDS in developing countries were receiving treatment with at least one antiretroviral medicine provided by the AAI companies.

“To sustain efforts like AAI, however, all stakeholders – including emerging economies – need to bear their fair share of the economic burden of creating, developing and making available new, potentially life-saving medicines. Recent decisions by the governments of two middle income countries to issue compulsory licenses for pharmaceuticals are inconsistent with the G-8’s petition for countries with emerging economies to accept their responsibilities as global players and help to alleviate the burden of disease in Africa.

“We urge all stakeholders in the international community – from private enterprise to national governments – to work together to contribute to a strengthened and stable Africa.”

From CMS: Plans Suspend PFFS Marketing

Plans adopt strict guidelines in response to deceptive marketing practices

The Centers for Medicare and Medicaid Services (CMS) announced today that in response to concerns about marketing practices, seven health care sponsors have signed an agreement to suspend voluntarily the marketing of Private-Fee-For-Service (PFFS) plans. This suspension for a given plan will be lifted only when CMS certifies that the plan has the systems and management controls in place to meet all of the conditions specified in the 2008 Call Letter and the May 25, 2007 guidance issued by CMS. The signatories include: United Healthcare, Humana, Wellcare, Universal American Financial Corporation (Pyramid), Coventry, Sterling, and Blue Cross/Blue Shield of Tennessee.

“While we note that most health insurance agents are helpful and responsible in describing and explaining choices to beneficiaries, there are a few bad actors that need to be removed from the system for good,” said Leslie V. Norwalk, Esq., Acting Administrator of CMS. “This voluntary agreement demonstrates that CMS and the plans are stepping up to ensure that deceptive marketing practices end immediately, and that beneficiaries understand what they are purchasing.”

“Through a variety of methods, including our ‘secret shopper’ program that uses trained individuals to attend marketing events and report back on the insurance agents’ activities, and the eyes and ears of our thousands of partners throughout the nation, CMS is proactive in protecting beneficiaries from rogue agents. Although the 2700 agent complaints we logged from December 2006 to April 2007 represent less than one half of one percent of the 1.3 million members enrolled in individual PFFS plans, we can always do better,” added Norwalk.

The agreement is effective five business days from today and will continue to apply to individual plans until they have demonstrated to CMS that they have the systems and management controls in place to ensure that they can meet all the CMS requirements. CMS review will begin as soon as plans indicate they are ready. Plans signing the agreement will be actively monitored to ensure they do not engage in marketing while the voluntary suspension is in place. Violations will be subject to a full range of available penalties, which can include suspension of enrollment, suspension of payment for new enrollees, civil-monetary penalties, and termination of the plan’s involvement in the Medicare program. The full range of updated conditions will be in effect for all sponsors of PFFS plans beginning October 1, 2007, and violations of those conditions will be subject to the same types of penalties.

Primary provisions that the plans signing the agreement must meet to have the suspension lifted (and that all PFFS must meet beginning October 1, 2007) are summarized below:

- All materials, including but not limited to advertisements, enrollment materials, and materials used at sales presentations by employees or contracted representatives of a health insurance company will include the model disclaimer language provided by CMS in its May 25, 2007 guidance.

- All representatives selling the product to beneficiaries on behalf of the plan sponsor will pass a written test that demonstrates their thorough familiarity with both the Medicare program and the product they are selling.

- A provider outreach and education program will be in place to ensure that providers have reasonable access to the plan terms and conditions of payment, and that provider relations staff are readily accessible to assist providers with questions concerning the plan.

- Outbound education and verification calls will be made to all beneficiaries requesting enrollment to ensure that they understand the plan rules.

- Lists of planned marketing and sales events provided to CMS will include events sponsored by delegated brokers and agents as well as those sponsored by the plan.

When asked by CMS, plan sponsors will provide a complete list of all representatives marketing a PFFS product and authorize CMS to make that list available to State Insurance Departments on request.

“We want to underscore that Corrective Action Plans already in place will remain in effect until full compliance is attained and investigations underway involving fraud or criminal activity will continue to their appropriate conclusion,” added Norwalk. “In addition, once marketing resumes, CMS will actively monitor performance. Any violations of the requirements set forth in CMS guidance will be subject to immediate remedial action in accordance with standard procedures.”

CSDD Study Analyzes Post-Marketing Studies

A recent Analysis by the Tufts Center for the Study of Drug Development (CSSD)livened up the congressional debate regarding Post Marketing Studies. The original article (link at bottom) found at PharmaExec.com states that:

"Only 32 percent of respondents said post-marketing clinical studies ''significantly or very significantly'' added to their knowledge of a product's safety and quality, while the majority of both clinical and non-clinical study sponsors (68 percent and 79 percent, respectively) said post-marketing studies ''contributed either marginally or not at all'' to their understanding of the product."

This begs the question: Which % is most important? Is it the 68% that found basically no 'new news' via their post marketing study? Or is it the 32% that found additional side effects that needed to be addressed?

Given the recent events with Glaxo's Avandia, it may be far easier to argue on the side of the 32%. That's nearly 1/3 of all post marketing clinical studies that are finding potential issues. If, indeed, patient safety is priority number one --- these are very convincing statistics.

Imagine if you read that 1/3 of all automobiles had side effects in post marketing studies. Would that raise your eyebrows?

Of course the real crux of the matter is the time and costs associated with these studies. The article cited the following example: "45 percent of these studies were delayed, and 56 percent of the delayed studies needed ''at least a year beyond their expected completion date'' to finish."

Furthermore, the article indicates, "Genentech's Avastin (bevacizumab) had to go through 20 post-marketing studies to win approval for use in colorectal cancer patients. At $5.3 million a pop for clinical studies and $610,000 per non-clinical study, that's a steep price for one new application for a single drug."

This is certainly steep for a single drug and seemingly gives an advantage to the companies that have more money in their bucket for this type of activity. However, it's hard to argue the benefits to society at large. It would seem that there has to be some compromise on both sides in ensuring that these steps work.

Thoughts?

Article By Oriana Schwidt. Full article can be found at: http://www.pharmexec.com/pharmexec/article/articleDetail.jsp?id=432939&ref=25

Blog Topic of the Week: OIG Recommendations Regarding Federal Upper Limit

This week, the OIG published a report that addressed the DRA of 2005's impact on the Medicaid Federal Upper Limit Program. We have reprinted the "Recommendations" below, but this report in its entirety can be found on the Pharma Compliance Exchange or by contacting Brian O'Rourke at brianorourke@cis-partners.com.

RECOMMENDATIONS
The findings of this report again illustrate why changes to the previous calculation method were needed, as this method (based on published prices) led to inflated Medicaid payments for many high-dollar generic drugs. However, we have concerns that, at least initially, the new formula mandated by the DRA (based on lowest AMPs) may result in some Federal upper limit amounts that are below pharmacy acquisition costs. This could occur because for certain drugs the lowest AMPs may not reflect prices generally available in the marketplace.

As part of the proposed Federal upper limit regulation, CMS announced plans to identify potential reimbursement issues by removing the lowest AMP if it appears to be an outlier. The proposed regulation defines an outlier as a lowest AMP that is more than 70 percent below the second-lowest AMP. We support CMS’s attempts to proactively resolve potential problems with the new formula. However, our analysis (applying a more limited 60-percent threshold) indicates that using the second-lowest AMP may not alleviate all reimbursement issues.

In addition to CMS’s efforts, drug manufacturers and pharmacies also have important roles in helping to ensure that the new Federal upper limit amounts are appropriate. Manufacturers of generic drugs should make certain that the AMPs they are reporting to CMS are accurate. In turn, pharmacies should inform CMS if the new Federal upper limit amounts are lower than the prices at which they can purchase certain drugs.
We recognize that for various reasons (e.g., definitional changes in AMP, market forces, etc.), the relative relationship between the Federal upper limit amounts and other price points presented in this report may change once the new method of calculation is implemented. However, new Federal upper limit amounts should be monitored closely to help ensure that reimbursement changes do not lead to access problems for Medicaid beneficiaries. Specifically, we recommend that:

CMS should take steps to identify when a new Federal upper limit amount may not be representative of a drug’s acquisition cost to pharmacies. These steps could include:

• issuing a final regulation that would remove the lowest AMP from the Federal upper limit calculation when it is significantly lower than the volume-weighted AMP (rather than the second-lowest AMP) for a drug,
• contacting manufacturers to verify reported data in situations for which the lowest AMP appears to be significantly lower than other AMPs for a drug,
• examining Medicaid utilization data to ensure that the product on which the Federal upper limit is based is actually utilized in the marketplace, and
• providing an opportunity for pharmacies to alert the States and CMS when they can demonstrate an inability to purchase a drug at prices at or below the new Federal upper limit amount.

In situations where 250 percent of the lowest AMP may not be sufficient to cover pharmacy acquisition costs, CMS should determine the proper course of action (working with Congress, if necessary).

OEI-03-06-00400 DEFICIT REDUCTION ACT OF 2005: IMPACT ON THE MEDICAID FEDERAL UPPER LIMIT PROGRAM iv

Drug Industry: $1.3 trillion by 2020 --- and a New Business Model

CIS Moderator:

A recent study released by PricewaterhouseCoopers stated that the worldwide sales of pharmaceuticals will double by 2020 to $1.3 trillion. This rapid and explosive growth is to be driven by the growth of emerging countries such as Brazil, China, India, Indonesia, Mexico, Russia and Turkey.

IMS Health reported that sales in in 2006 grew 7% to $643 billion. In addition to these emerging markets, the growth will come from epidemics such as obesity and an older, ageing population.

The study also indicated that the 'blockbuster' model of drug development was going to be replaced by smaller scale, more effective pharmaceuticals. This obviously opens the door to new business models that could certainly benefit small to mid-sized pharma companies. Is this the way your company sees things?

According to PwC's Steve Arlingon, the industry is also suffering from a severe lack of innovation: "The industry is investing twice as much in R&D as it was a decade ago to produce two-fifths of the new medicines it then produced."

An interesting thought: Are these new medicines resulting in higher dollar amounts making higher levels of investment justifiable? What's the relationship of R&D investment to growth for your company? Do you see a discrepancy in your company from years ago? Is investment too high --- not enough?

What's also interesting in the study is that the forecast is actually lower than the 7% growth that was seen in 2006. If the industry was to increase by 7% each year from 2007 to 2020, the figure would be more like $1.55 trillion and not the $1.3 trillion cited. Keep in mind, my simple calcluation does not take inflation into account either. Flat sales and 2% inflation would take the number to $831 billion by 2020.

To read the actual article, go to: http://www.reuters.com/article/health-SP/idUSL1271319820070612?pageNumber=1

LONDON, June 13 (Reuters) Reporting by Ben Hirschler; editing by Paul Bolding

Blog Topic of the Week: OIG Weighs in on Quarterly AMP Fluctuations

Hello fellow Bloggers!

The below is a summary of the findings and the OIG's conclusion on their most recent study and analysis of the fluctuations reported in Quarterly AMPs. We encourage everyone to weigh in on this topic by clicking on "POST YOUR THOUGHTS HERE" at the bottom of each page. The entire document can be found at www.cis-pcx.com or by contacting CIS's Brian O'Rourke at brianorourke@cis-partners.com.

FINDINGS
Overall, 39 percent of average manufacturer prices stayed the same between quarters, and an additional 16 percent changed by less than 2 percent. During the period under review, an average of 39 percent of AMPs did not change between quarters, and another 16 percent of AMPs changed by less than 2 percent. Twenty-four percent of AMPs fluctuated by more than 10 percent from quarter to quarter. Of this number, half increased and half decreased.

Average manufacturer prices for single-source drugs changed more frequently than those for other drug types, but most changes were relatively small. An average of 78 percent of AMPs for single-source NDCs changed from quarter to quarter during the period under review. However, of those that changed, slightly more than half fluctuated by 2 percent or less. Only 7 percent of single-source NDCs, on average, had AMPs that changed by more than 10 percent between quarters.
In comparison, the AMPs for 67 percent of innovator multiple-source and 58 percent of noninnovator multiple-source NDCs changed between quarters. However, the size of these changes tended to be larger than the changes for single-source NDCs.

Average manufacturer prices for high-expenditure drugs changed more frequently than those for other drugs, with single-source drugs being especially prone to price increases. AMPs for the top 50 NDCs by total Medicaid reimbursement in each category (single-source, innovator multiple-source, and noninnovator multiple-source) experienced more fluctuation between quarters than all AMPs as a whole. On average, AMPs for 3 percent to 5 percent of the top 50 NDCs in each category stayed the same from quarter to quarter, compared to 22 percent to 42 percent among all NDCs in each category.

AMPs for the top 50 noninnovator multiple-source NDCs showed the most variability, with more than half changing by at least 10 percent between quarters. At the same time, virtually all (99 percent) of the top 50 single-source NDCs changed by less than 10 percent between quarters. AMPs for the top 50 innovator multiple-source NDCs changed at rates that fell between noninnovator multiple-source and single-source NDCs.

Overall, 42 percent of AMPs for the top 50 noninnovator multiple-source NDCs increased and 54 percent decreased between each quarter during the period under review. In contrast, AMPs associated with the top 50 single-source NDCs increased more than they decreased. An average of 79 percent of AMPs for the top 50 single-source NDCs increased between each quarter, with 41 percent increasing by at least 2 percent.

CONCLUSION
In this review, we found that the majority of AMPs did not fluctuate substantially from quarter to quarter and that roughly equal numbers of AMPs decreased as increased. However, when compared to AMPs for other drug types, AMPs for single-source drugs, especially those with high Medicaid expenditures, were more prone to increases between quarters. Although these increases tended to be relatively small, States may want to take the potential effects of AMP increases during the lag period into account when developing any AMP-based reimbursement formulas.

It is important to note that this analysis focused on quarterly AMP data, because CMS had yet to begin collecting AMPs on a monthly basis at the time of our review. Once AMP data are reported on a monthly basis, we expect the size and the number of fluctuations between reporting periods to be reduced.

PhRMA Weighs in on Growing Worldwide Counterfeit Epidemic

From PhRMA.org:

Washington, D.C. (June 4, 2007) — On the heels of numerous high profile articles highlighting the growing trend of counterfeiting around the world, the Organization for Economic Cooperation and Development (OECD) today released its own detailed report of the illicit counterfeit business. Pharmaceutical Research and Manufacturers of America (PhRMA) President & CEO Billy Tauzin recognized today the importance of these studies and how critical it is to continue to raise awareness of the worldwide counterfeiting problem.

“Now more than ever, policymakers need to take a serious look at the potential ramifications the illicit counterfeit business can have on the health of patients around the world,” Tauzin said. “The OECD report reinforces PhRMA’s concerns about this dangerous trend and the possibility of counterfeit medicines creeping into the U.S. drug supply system, particularly if Congress opens the floodgates to imported medicines from abroad.”

The OECD conducted a thorough examination of the worldwide counterfeit business and concluded that criminal organizations stand to profit hundreds of billions of dollars annually from the sale of counterfeit products, including medicines. OECD also found that consumers are increasingly being exposed to fake products that are unsafe, unhealthy, dangerous and potentially lethal.

Tauzin added, “We are facing a massive global problem that needs to be addressed before more patients’ lives are threatened by this counterfeit epidemic. This will no doubt require a collaborative effort on behalf of governments around the world, industry and other key stakeholders to find effective solutions to combat this dangerous trend.”

The OECD report emphasizes the need for more studies to be done in the future to help give the public and governments around the world a better understanding of the impact the counterfeit business will have on the economy, jobs and the potential effect it could have on the future innovation of life-enhancing products.

Major OIG Update: “Compendium of Unimplemented Office of Inspector General Recommendations”

Copies can be found on the Pharma Compliance Exchange (PCX) at www.cis-pcx.com or by contacting Brian O'Rourke at brianorourke@cis-partners.com.

Pharma pricing 'unsustainable', Elan CEO

The Irish Times Reports:

Elan CEO Kelly Martin has challenged the pharmaceutical industry to overhaul its commercial model by offering groundbreaking new treatments at lower cost, which he said his company is likely to follow for its Alzheimers treatments.

"The psychology of the industry is that, if you are first, the price should be high," The head of the Ireland-based drugs group told The Financial Times .

"The economic structure is unsustainable. The tension will grow and something has to give."

Referring to the company's medicines to treat Alzheimers disease - which set for launch by the turn of the decade - Martin said there is a commercial advantage to building market share by offering lower-priced drugs over many years.

"We would consider using price as one of the parameters for strategically positioning this company for the long term," he said.

"You need low and flexible infrastructure costs but you can charge less if you continue to innovate."

Where does your company stand on pricing?

Would this mentality hurt, help or have no effect on your company?