What a drug-cost transparency bill in California wouldn't reveal

To the editor: As your editorial notes, there are "legitimate concerns" with AB 463, a bill intended to boost transparency on drug pricing that was recently introduced in California. The legislation's requirements would result in an inaccurate and misleading portrayal of the cost of developing new treatments while failing to provide patients with any additional information about their out-of-pocket costs for medicines. ("Bill on drug pricing would help state in figuring healthcare costs," editorial, April 26)

AB 463 only focuses on the medicines that make it to market, while completely ignoring the 90% that fail during testing, a costly yet vital part of discovering new treatments. Additionally, the legislation does not take into account the tremendous value these medicines provide to patients, California's healthcare system and the state's economy.


Real transparency legislation would instead focus on giving patients greater information about the costs insurers impose to see a doctor or to get a prescription — information that is severely lacking in the current insurance marketplace.

John J. Castellani, Washington

The writer is president and chief executive of Pharmaceutical Research and Manufacturers of America.


To the editor: The answer to the question of why drugs cost so much is obvious: There is no free market for new drugs because there is no competition.

A monopoly on a drug lasts until a competitor slightly modifies the molecule, patents it and sells it under a new name. For the few initial years, the original drug manufacturer can charge as much as it wants. Why should the price not be as high as a company can get it?

The victims are the sick people who cannot afford high prices, the insurance companies and the government healthcare organizations (which means the rest of us).

Somehow, drug prices need to be controlled. Drug manufacturing could be considered as a "utility" since this market is not competitive. Since one cannot choose one's gas, water or electricity company, those prices are regulated.

Pharmacological research could also be recognized as a field of public interest, perhaps as an added mission of the National Institutes of Health, a federal agency that has been extraordinarily successful in all other aspects of medical research.

AB 463, which aims at collecting information, is a welcome first step at addressing this problem.

John Schlag, MD, Beverly Hills

The writer is a distinguished professor emeritus at UCLA's School of Medicine.

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