. >> john castellani: the drug companies have to put a price on a medicine that reflects the cost ofg them, which is very expensive and takes a long period of time, and the value that it can provide. >> stahl: john castellani is president and c.e.o. of phrma, the drug industry's trade and lobbying group in washington. if you are taking a drug that's no better than another drug already on the market and charging twice as much, and everybody thought the original drug was too much... >> castellani: we don't set the prices on what the patient pays. what a patient pays is determined by his or her insurance. >> stahl: are you saying that the pharmaceutical company's not to blame for how much the patient is paying? you're saying it's the insurance company? >> castellani: i'm saying the insurance model makes the medicine seem artificially expensive for the patient. >> stahl: he's talking about the high co-pay for cancer drugs. if you're on medicare, you pay 20%. 20% of $11,000 a month is a heck of a lot more than 20% of $5,000 a month. >> castellani: but why should it be 20% instead of 5%? >