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Stephen Ubl took over reins of the Pharmaceutical Research and Manufacturers of America last September just as public outrage over high drug prices was hitting its peak. A nimble inside-the-Beltway operative, Ubl came to PhRMA from the Advanced Medical Technology Association, the medical-device makers' trade group, where he won a two-year reprieve from the Affordable Care Act's device tax. He recently sat down for an interview with Modern Healthcare editor Merrill Goozner. This is an edited transcript.
Modern Healthcare: Your industry is under attack by political candidates from left to right over high drug prices. Do you think you are being unfairly attacked?
Stephen Ubl: Unfortunately, a lot of the campaign rhetoric is born of the mistaken view that drug prices are fueling overall cost growth. (That) is myopic because it focuses on list prices, not on net prices. It doesn't focus on the value of the products. We're trying to educate policymakers on both the marketplace dynamic, which I think is misunderstood, as well as the value the products bring to patient care and healthcare systems.
MH: Yet over the past couple of years, drug spending has grown at a double-digit rate, while the hospital sector and the physician sector are growing about at the rate of the rest of the economy. What accounts for this higher spending on drugs, if not the higher prices?
Ubl: Brand net price increases last year were about of 2.8%. CMS' own actuaries look out from now until 2020 and see drug prices moderating and drug costs growing closer to medical inflation. But the broader point is drug prices are the wrong target. We should really be looking at the cost of chronic disease.
We all know that 80%...