Unbiased Analysis of Today's Healthcare Issues

Brexit = upheaval for drug makers

Written By: Jason Shafrin - Jun• 27•16

Will the European Medicines Agency (EMA) need to re-located after Brexit? According to a Reuters story, the answer is yes.

The EMA is a London-based organization that approves treatments for all EU countries. As the UK leaves the EU, however, EMA is expected to have to relocate. 600 individuals work for EMA.

More important is how Brexit would affect patients.

Although Britain could continue to take part in the EMA system if it remains in the European Economic Area, like Norway, many of those supporting its exit from the EU oppose that option.

As a result, British patients could move to the back of the queue for new medicines as companies prioritize the larger EU market, and some medicines could be left in regulatory limbo.

Where will EMA go?  Healthcare officials in Sweden, Denmark, Italy and Germany have expressed interest in hosting EMA, but EMA’s future destiation–or if any move at all will be needed–is still influx.

Doctors with Borders

Written By: Jason Shafrin - Jun• 26•16

Although I believe that a lot of the pundits claims of economic downturns due to the Brexit are overblown, there are clearly many uncertainties to resolve.  The Telegraph reports on how Brexit will affect doctors working in the UK.

As a result of the country’s decision to leave the EU, health regulators may have to change the way information about medics is shared across European borders when concerns are raised about doctors or nurses.

At present, there are European directives on sharing disciplinary records and fitness to practise hearings.

Niall Dickson, chief executive of the General Medical Council, said: “Withdrawing from Europe will have implications for the way that we regulate doctors but we understand that the vote to leave the EU will have no impact on the registration status of any doctor already on the register.

“We will now explore how doctors from the EU will be granted access to the UK medical register and how any concerns about those doctors will be shared between us and other countries.

“We will also seek to understand the implications for UK doctors wishing to work in the EU once the UK is no longer a member state.”

Will the cost of health care rise in the UK due to an inability to hire less expensive foreign physicians and health workers. Perhaps, but my guess is that the effect is fairly modest, especially after immigration rules within the UK have been ironed out.


Written By: Jason Shafrin - Jun• 24•16

Prioritizing vaccine development

Written By: Jason Shafrin - Jun• 22•16

For which diseases should vaccines be developed?  Although ideally the answer is “all of them”, given that there are limited resources in the world, which diseases should be prioritized?  The Institute of Medicine’s Strategic Multi-Attribute Ranking Tool for Vaccines (SMART Vaccines) tool is one effort to make such prioritization explicit based on fixed attributes.   The attributes are the following.

Health Considerations
  • Premature Deaths Averted per Year
  • Incident Cases Prevented per Year
  • QALYs Gained or DALYs Averted
Economic Considerations
  • Net Direct Costs (Savings) of Vaccine Use per Year
  • Workforce Productivity Gained per Year
  • One-Time Costs
  • Cost-Effectiveness ($/QALY or $/DALY)
Demographic Considerations
  • Benefits Infants and Children
  • Benefits Women
  • Benefits Socioeconomically Disadvantaged
  • Benefits Military Personnel
  • Benefits Other Priority Population
Public Concerns
  • Availability of Alternative Public Health Measures
  • Potential Complications Due to Vaccines
  • Disease Raises Fear and Stigma in the Public
  • Serious Pandemic Potential
Scientific and Business Considerations
  • Likelihood of Financial Profitability for the Manufacturer
  • Demonstrates New Production Platforms
  • Existing or Adaptable Manufacturing Techniques
  • Potential Litigation Barriers Beyond Usual
  • Interests from NGOs and Philanthropic Organizations
Programmatic Considerations
  • Potential to Improve Delivery Methods
  • Fits into Existing Immunization Schedules
  • Reduces Challenges Relating to Cold-Chain Requirements
Intangible Values
  • Eradication or Elimination of the Disease
  • Vaccine Raises Public Health Awareness
Policy Considerations
  • Interest for National Security, Preparedness, and Response
  • Advances Nation’s Foreign Policy Goals
User-Defined Attributes
  • Up to Seven Attributes

Users can prioritize which attributes are the most important.  Do you agree with this list?  Which attributes would be most important to you if you were a policymaker?

John Oliver on Retirement Plans

Written By: Jason Shafrin - Jun• 21•16



ICER and drug prices

Written By: Jason Shafrin - Jun• 20•16

The Institute for Clinical and Economic Research aims to measure the value of drugs and aims to reduce the price of treatments that they deem to be low-value.  Is this simply an academic exercises, or are payers paying attention?  An article in CNBC sheds some light on the topic:

Asked about that analysis, Miller said: “We used the ICER report in our negotiations. Did we receive the ICER price? The answer is no, we didn’t.”

The ‘Miller’ above refers to Dr. Steve Miller, senior vice president and chief medical officer of Express Scripts.

It should not come as a surprise that insurance companies and pharmacy benefit managers are using all evidence at their disposal to try to drive down the price of prescription drugs.

Does defensive medicine work?

Written By: Jason Shafrin - Jun• 19•16

According to a paper by Jena, Schoemaker, Bhattacharya, and Seabury (2015), the answer is yes.

Across specialties, greater average spending by physicians was associated with reduced risk of incurring a malpractice claim. For example, among internists, the probability of experiencing an alleged malpractice incident in the following year ranged from 1.5% (95% confidence interval 1.2% to 1.7%) in the bottom spending fifth ($19 725 (£12 800; €17 400) per hospital admission) to 0.3% (0.2% to 0.5%) in the top fifth ($39 379 per hospital admission). In six of the specialties, a greater use of resources was associated with statistically significantly lower subsequent rates of alleged malpractice incidents.

Policymakers and health policy wonks aim to reduce the practice of defensive medicine; this study, however, indicates that defensive medicine may be incentive compatible for physicians.


Friday Links

Written By: Jason Shafrin - Jun• 16•16

HWR at Health Affairs

Written By: Jason Shafrin - Jun• 16•16

Christopher Fleming has posted A Pot Luck Health Wonk Review at Health Affairs Blog.   Check it out!

Medicaid Managed Care and Drug Utilization for Patients with Serious Mental Illness

Written By: Jason Shafrin - Jun• 15•16

How will Medicaid expansions affect patient access to pharamceuticals? This question is particularly relevant for patients with serious mental illness. The answer is complicated by the increasing presence of Medicaid managed care plans.

Increasingly, states have turned to contracts with Medicaid managed care plans in order to better control costs and reduce budgetary uncertainty. However, in many states, prescription drug spending is “carved out” (ie, not included) in the managed care benefit. Under a carve-out arrangement, prescription drug benefits are managed on an FFS [fee-for-service] basis, which excludes them from the set of services for which a managed care plan has oversight and direct financial liability. Conceptually, this suggests that carveout reduces both the ability of and incentives for managed care plans to coordinate pharmaceutical use with spending on other health services, potentially leading to “cost spillovers” elsewhere in the system.

How does Medicaid managed care affect drug utilization? A paper by Schwartz et al. (2016) uses Medicaid State Drug Utilization Data to measure drug use among patients with SMI. They use annual enrollment reports to measure the share of each state enrolled in Medicaid managed care plans between 1999-2011. The authors use the Medicaid Analytic Extract (MAX) Prescription Drug Tables to determine of the patient had a prescription drug carve out. The combined data produced a sample of 310 state-year observations. The authors find that:

managed care penetration increased from 54.5% nationally in 1999 to 74.9% nationally in 2011…We found cross-sectional, negative associations between the managed care penetration rate and each measure of SMI prescription utilization, although not all estimates were statistically significant (Table). In particular, a 10 percentage point increase in Medicaid beneficiaries enrolled in managed care was associated with 0.87 fewer SMI prescriptions per beneficiary with SMI…Similarly, a 10 percentage point increase in managed care penetration was associated with $103 lower SMI drug spending per beneficiary using the broad definition.

The results, however, were closer to 0 and not statistically significant when state fixed effects and state fixed effects interacted with a linear time trend were included in the model.