Bill Gates thinks that the US drug pricing strategy is 'better than most'

Bloomberg Television

Big Pharma just got a major endorsement.

In an interview this week with Bloomberg, Bill Gates said that for all the criticism the industry has gotten over the past year regarding its drug pricing strategies - in which the costs of some existing medicines have had drastic increases over the past few years - it's still better off than some alternatives.

"Despite some extreme cases that have been properly labeled as inappropriate, I think that the current system is better than most other systems one can imagine," he said.

Gates interacts with a number of drug companies through the Bill & Melinda Gates Foundation, which works in part to treat and prevent infectious diseases in developing countries.

"The drug companies are turning out miracles, and we need their R&D budgets to stay strong," he said, pointing to the hepatitis C cures that have come out in the past few years. The drugs have drawn negative attention because of their high costs. But, as Gates pointed out, there's been more competition since, which has led to lower prices. Essentially, charging high prices on cures, like the ones for hepatitis C, lead to larger budgets that could turn out other revolutionary drugs farther down the line.

"For things like Alzheimer's, they can reduce medical costs so dramatically and improve the human condition," he said.

Even so, there's still a lot of push-back against high drug prices, especially on existing medications that increase in price. In an interview with NBC's Tom Brokaw, Vice President Joe Biden spoke out against pharma prices, saying, "The pharmaceutical industry owes us an explanation." Biden gave an example of a drug, which he didn't name, that came out in 2002 with a price around $27,000 a year and today costs $130,000 a year.

"I'm going to seek publicly to hear the explanation," he said.

Watch the full Gates interview here.