Praise & Press

Praise for The Great American Drug Deal

"Magnificent. Compelling. Authoritative. Every member of Congress, staffer, and researcher interested in understanding the nexus of biomedical innovation, pricing, and affordability should read The Great American Drug Deal. Kolchinsky will amaze you with his knowledge of the industry and surprise you with his unshrinking prescriptions for reform. Clear and accessible, this is the history, science, and finance class that can help American voters steer the healthcare debate."

Amitabh Chandra, PhD

Ethel Zimmerman Wiener Professor, Harvard Kennedy School of Government; Henry and Allison McCance Family Professor of Business Administration, Harvard Business School

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“This book is not only a superb piece of scholarship, but a veritable tutorial on the background (1980-2020) of US drug pricing policies and practices, as well as those of the payers/health insurance industry. The book comes across as a common-sense, temperate manifesto on how biopharma enterprises can not only shape the future debate on drug pricing and health insurance/policy but also offers thoughtful remedies and perspectives. Kolchinsky's command of the material is superb. I liked the book’s style - serious while at the same time digestible and almost colloquial in places. Notions such as a ‘Public Domain Day’ and ‘Price-Jacking’ were beautiful, delicious. So too was the book’s repetitive illustration of the ‘generic drug mountain.’ Excellent."

John Hawkins

Author, Conscience and Courage: How Visionary CEO Henri Termeer Built a Biotech Giant and Pioneered the Rare Disease Industry

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“We are living in one of the most exciting periods of scientific innovation and drug discovery in history. Peter Kolchinsky steps past the headlines and simple rhetoric to take on directly the most challenging questions we face as a society in balancing the trade-offs between incentivizing and enabling the discovery of breakthrough medicines, and the responsibility we have in ensuring this is done in a sustainable way. This analysis elevates the discussion and offers new important thinking and actionable solutions that would benefit all stakeholders.”

Michel Vounatsos

Chief Executive Officer, Biogen

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"What are we getting for what we spend in health care, and why? Read this book, which explains the workings of the pharmaceutical industry in plain language, dispelling myth after myth with facts, figures, and case studies. This long overdue review of industry workings, from brand and generic pricing, to what consumers pay for different products and services, to a greater understanding of what's truly just a cost versus what's an investment in the health of our country, including our business competitiveness internationally, was a joy to read. As a former practicing physician with a 20 year business career in health systems, health insurance payers, and the pharmaceutical industry, I found this to be refreshingly balanced and right on target with respect to looking at the facts as opposed to the hype. So, enjoy the read, and you'll never listen to debates on health care the same ever again."

Ira Klein

MD, MBA, FACP

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The Great American Drug Deal In the Press

Forbes, “A Biotech VC’s Prescription for What Ails Pharma”, Frank David, Jan. 26, 2020

“Many partisans may choose not to read Kolchinsky’s book — but that would be a mistake. Yes, of course, his perspective is “biased” by his career as a biotech investor. And no, this isn’t an academic treatise or wonky white paper, sourced with hundreds of references that exhaustively support every point and rebut every possible counter-argument. But whether you agree or disagree with his positions, in whole or in part, there’s value in seriously considering the well-reasoned and generally even-handed perspective of someone who’s “been there, done that” in the drug industry. The Great American Drug Deal deserves a wide audience among policy-makers who are wrestling with how to ensure we get the innovation in prescription medicines that we need and want, at prices that we can afford.”

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Timmerman Report, “False Heroes: Pharmacy Benefit Managers and the Patients They Prey On”, excerpt from The Great American Drug Deal, Jan. 23, 2020

“Pharmacy Benefit Managers, or PBMs, are the companies who negotiate with drug companies on behalf of payers (and some PBMs are actually owned by insurance companies, so one can think of them as just agents of payers), and – importantly – retain a portion of the rebates that pass through them. In effect, PBMs profit from the very high list prices they purport to heroically negotiate down. A biopharmaceutical company offering a lower list price without a rebate would threaten the PBM business model, so PBMs discourage the tactic by not rewarding it. Instead they encourage drug companies to keep publicly known list prices high and give an ever-bigger confidential rebate to the PBM, from which the PBMs siphon off their own rent before passing on the lower net price to the payer while boasting, “Behold what I have negotiated for you!”

Let’s take a closer look at the numbers to see how all this works (or doesn’t)...”

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BioPharm International, “Drug Prices: Revisiting the Social Contract”, Agnes Shanley, Jan. 20, 2020

“January 20, 2020 saw the publication of The Great American Drug Deal: A New Prescription for Innovation and Affordable Medicines, written by PhD virologist Peter Kolchinsky, founding partner and portfolio manager at RA Capital. Addressing issues that affect all stakeholders (i.e., healthcare systems, providers, patients, payers, and developers), the book outlines approaches that could make drugs more accessible while rewarding innovators for persevering with the cost and challenges of drug development….

[His] new book aims to clarify misunderstandings about innovation and to start discussion and debate about the role that insurance companies and other payers, patients, healthcare systems, and drug developers and manufacturers should play in reducing drug prices. Kolchinsky believes that innovation should be clearly separated from mere patent extension and that industry funding be limited to the first 10-15 years after a new drug is developed. ‘If we don’t sacrifice the excessively long revenue tails some companies have figured out how to append to old drugs, society will simply squash all revenues down with indiscriminate price controls,’ he says.”

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Forbes, “The 2020 Spring Semester Entrepreneurship In Biotechnology Reading List”, David Sable, Jan. 15, 2020

“Here’s the extra reading I’m recommending to my students this semester:

1) The Great American Drug Deal, by Peter Kolchinsky. I’m jumping the gun on this one, since it won’t be formally released until January 20th, but this is an absolutely essential examination of drug pricing in the United States. Building off of Peter’s excellent Medium series on what he terms the Biotech Social Contract, he examines how historically patients, through their insurance premiums, subsidized and financed the cost of innovation in pharmaceutical and biotech drug development, to be rewarded later by an ever-growing resource of cheap and readily available generic drugs. More recently, however, misplaced and misaligned incentives have distorted this system and created the worst of all worlds: high costs, little to no incentives for efficiency, and patients increasingly losing access to the very drugs that they have helped finance by paying premium pricing. Peter was a class speaker in 2013 and even I took notes. If my students read just one book on this list it should be this one.”

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PharmTech, “Public Opinion: Can Pharma Chart A New Course?” Agnes Shanley, Jan. 15, 2020

“Kolchinsky says he wrote The Great American Drug Deal in response to misunderstandings about drug pricing and innovation costs. “Companies that we are working with and funding to develop new drugs never intended for those drugs to be unaffordable to anyone. They want patients to benefit from their inventions,” he says. But these small innovators would be hurt by sweeping price controls, he says. 

One problem is that, when the public and Congress look at the drug industry, they see a single, abusive business model when there are really two distinct models, Kolchinsky says. One model drives innovation and needs to be preserved, while the other takes advantage of society and must be reformed. In the first, companies develop new drugs with the hope of marketing them for a period of 10–15 years before they go generic. In the second, they extend the lives of older drugs with new patents, often by making minor upgrades, some of which do not add much value, or simply by exploiting regulatory loopholes so that they can keep harvesting branded revenues. Efforts to reform the industry should largely be focused on the second model, Kolchinsky says, and aim to prevent unjustified patent extensions rather than to impose direct price controls on all drugs.”

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BioWorld, “Targeting High Drug Prices, EQRx Launches with a $200M Series A”, Michael Fitzhugh, Jan. 12, 2020

“Other challenges could be more complex, as outlined by RA Capital’s managing partner, Peter Kolchinsky, in his forthcoming book, The Great American Drug Deal. In exploring the complexities and potential of the fast-follower approach, he writes that while such medicines are sometimes similar enough that a physician might feel a particular patient could be adequately treated with any one of them, the drugs are often different enough that ‘pharmacies can't take the initiative to just substitute one for the other, at least not without calling the doctor to send in a new prescription.’

Even if that problem were solved, fast follower medicines face other tough dynamics. "The differences between therapies in the same drug class may manifest as different side effects or efficacy profiles or interact differently with other drugs a person may be taking," according to Kolchinsky. Furthermore, he writes, "having fast-followers in a class... allows payers to play drugs off one another, offering preferential formulary status and market share in exchange for price concessions," he adds. (Case in point: The battle between Gilead Sciences Inc.'s Harvoni (ledipasvir and sofosbuvir) and Abbvie Inc.'s Viekira Pak (ombitasvir, paritaprevir, ritonavir and dasabuvir).”

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