Unbiased Analysis of Today's Healthcare Issues
Most products–especially commodities–are sold with a single price. You can buy an iPhone for largely the same price throughout the country. In the case of pharmaceuticals, however, there may be a case that prices should vary depending on their use. For instance, there may be a treatment which provides large benefits to patients with disease…
Yesterday I noted that competition is key to driving down prices in health insurance markets. Competition is about expanding the number of suppliers available for a given product. Now let’s think about the demand side. Does reducing the number of purchasers increase or decrease price? One could think that price would fall because buyers would…
An interesting news story from PBS Newshour on pharmacy benefits manager (PBM). Of particular interest is a clip of Alex Azar testifying that “We may need to move toward a system without rebates, where PBMs receive no compensation from the very pharma companies that they are supposed to be negotiating against.”
The government strictly regulates what information that pharmaceutical firms can share with payers. There is good reason for this. We don’t want drug companies making false claims that a drug can treat/cure a disease when there is no evidence to support that claim. Randomized controlled trials are the gold standard of clinical evidence and studies…
The U.S. has a decentralized health care system. This means that depending on your health plan, you may have more or less generous coverage. But how does coverage vary across plans? A recent paper by Chambers et al. (2018) looks specifically at coverage of specialty drugs. Using the Tufts Medical Center’s Specialty Drug Evidence and Coverage…
An interesting article by Charles Silver and David A. Hyman argues that we should do away with patents for pharmaceuticals and move to a prize based system. They write in Vox: A well-designed prize regime would lower drug prices by eliminating drug monopolies, yet it would also create the necessary incentives for innovation, including incentives to…
Outcomes-based contracts are supposed to be the next big thing. When payers are not sure about the real-world benefits or cost of a treatment, outcomes-based contracts and help them diversity risk. For instance, CMS will only pay for the CAR-T product Kymriah when “…these patients respond to Kymriah by the end of the first month…
In broad strokes, the American Patients First plan aims to lower list prices, lower patients’ out-of-pocket costs while maintaining incentives for innovation. In short, this is a sensible strategy, although there are some concerns about how more restrictive formulary designs could restrict consumer choice. American Patients First in brief To maintain manufacturers incentives to innovate,…
In the news, we hear a lot about the high cost of pharmaceuticals. Just this week, there are rumors that Donald Trump will give a “major address on drug prices“. HHS Secretary Alex Azar recently stated that “Bold action is on the way’ for drug prices.” At the same time drug rebates are coming under…
Drugs known as “orphan” drugs are those used to treat rare disease. However, how “rare” is rare disease? In Europe, a rare disease is one affecting 5 or fewer people per 10,000 residents. In the U.S. this figure is less than one in every 1,500 residents. Although each rare disease is–by definition–rare, about 350 million…