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Archive for the 'Pharmaceuticals' Category

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Why are pharmaceuticals so expensive?  One reasons is that there is a lot of research that goes into developing a drug.  Most of that research results in drugs that don’t work.  One example is the search for Alzheimer’s treatment.  As Bloomberg reports: Drug companies have long focused on a different protein called amyloid that clumps in […]

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Brexit = upheaval for drug makers

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 […]

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ICER and drug prices

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 […]

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

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 […]

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Money back guarantee

With increasing pressure on the price of health care services, a number of firms are seeking innovative pricing strategies.  Stat reports: Stryker, a medical device company, developed its SurgiCount system to accurately track these sponges. This March, it announced it is backing the product with a $5 million guarantee. If the system is used as […]

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Do physicians know whether patients are adherent?

Doctors have access to life saving medication for a number of illnesses.  However, the medication only works when patients take the drugs.  Are physicians able to determine which patients are adherent to their medication?  According to an article in JAMA Cardiology, the answer is ‘no’ for cardiology patients. Forty (61%) patients reported rarely or never […]

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Part B drug reimbursement

In the past Medicare has reimbursed physicians that administer Part B drugs–typically injectable medications administered in a physician’s office–at 6% of the drug’s cost.  The 6% aims to cover the cost of purchasing and storing the drug as well as administering it.  Because physician reimbursement is proportional to the cost of the drug, physicians have […]

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Are drug prices higher or lower in the U.S.

The high price of prescription drugs in the U.S. has received a lot of press in recent years.  However, are drug prices really higher in the U.S. than other countries?  Tomas Philipson makes an interesting point regarding U.S. drug prices: It is well known that free-market prices of branded drugs still on patent are higher in […]

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Value Framework Guidelines

In recent years, a number of organizations have developed value frameworks to assess new treatments.  These organizations include the Institute for Clinical and Economic Review (ICER), Memorial Sloan Kettering Memorial Cancer Center (Drug Abacus), American Society for Clinical Oncologists (ASCO),  National Comprehensive Cancer Network (NCCN), European Society of Medical Oncology (Magnitude of Clinical Benefit Scale). […]

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How does cost sharing affect drug utilization?

Any economist knows that if you raise the price of a good, demand goes down.  Thus, one should not be surprised to find numerous studies that show that increased cost sharing decreases drug utilization.  But how does drug utilzation decrease?  Is it along the extensive margin (i.e., the decision to initiate the drug) or along the intensive margin […]

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