Unbiased Analysis of Today's Healthcare Issues
How do you measure the value of new drugs? An organization known as the Institute for Clinical and Economic Review relies almost exclusively on Quality-Adjusted Life Years (QALY)-based framework. While that is a good start, many new treatments may have impacts beyond directly on health including on educational outcomes, productivity, caregiver burden. Further, society is…
Louisiana has already begun adopting a “Netflix” pricing model to pay for Hepatitis C treatments. Rather than pay per treatment, Louisiana would pay a flat rate per month to access as many Hepatitis C treatments as they need. The benefit of this is (i) states have predictable budgets and (ii) manufacturers have predicable revenues. This…
What will Trump’s “favored nation” policy do to drug prices and innovation? How will 340B reforms affect the price hospitals charge for drugs? Myself and my colleague Jim Baumgardner weigh in with our thoughts in an article in FormularyWatch. “US drug prices will certainly fall. However, prices outside the US will rise,” Jason Shafrin, PhD,…
A typical answer is that the cost of R&D is very high. However, an interesting book by–César Hidalgo titled Why Information Grows–offers a more conceptual rationale. Medicinal pills embody little information, as their active compound is usually a small and relative simple molecule. Yet medicinal pills can be extremely useful and valuable. Why? To understand…
How did Medicaid expansion affect prescription drug use? At first glance, one would think that prescriptions increased; more insurance lowers patient out-of-pocket cost so we would expect more prescriptions. Medicaid insurance may crowd out other forms of insurance; if those other forms of insurance covered more drugs, then perhaps utilization would go down. A study…
Seven CEOs from large pharmaceutical firms were brought before Congress today. And they got an earful from both Demogratic and Republican Congressmen. The executives were critique for selling too many opioids. They were critiqued for legal manuevers to extend brand name drugs’ patent life. But most of all, they were critiqued for high drug prices.…
Although the high cost of pharmaceuticals is often in the news, these costs are offset by improved health benefits. However, it may not be clear the extent to which new pharmaceutical products lead to improved health at the national level. A paper by Lichtenberg (2018) aims to examine this question looking at the introduction of…
According to a recent study in Health Affairs by Hernandez et al. (2019), the answer is ‘no’. The authors use pricing data from First Databank and pharmacy claims from UPMC Health Plan between 2008-2016 to track trends in drug prices over time. They found that the costs of oral brand name drugs increased 9.2% per year…
While the high price of branded drugs often gets a lot of attention in the public, few realize that after patent expiration, prices often plunge dramatically and high quality treatments are available for extremely affordable prices. Granlund and Bergman (2018) estimate the size of this price reduction using data from Sweden. In the long term,…
A number of people talk about Medicaid “best price”…but what is it really? StatNews provides a concise overview: The Medicaid best price law, enacted in 1990, requires drug manufacturers to charge the Medicaid program the lowest or “best” price they negotiate with any other buyer and send a rebate check to every state Medicaid department so…