Drugmakers have responded to shrinking sales volume by raising drug prices, and insurers, governments and other payers have borne the costs. But the strategy is unsustainable as more insurers migrate from a co-payment to a co-insurance model that charges subscribers a percentage instead of a fixed rate, Matthew Herper writes. The result is that drugmakers will increasingly focus on high-priced niche drugs "because these drugs are already so expensive and patients, doctors, and insurers all have some sense of how to deal with the costs through drug company patient assistant programs and other means," he writes.

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