Will value-based pricing be coming to the U.S.?

The answer may be yes.  One of the big inpediments to value-based pricing of pharmaceuticals was that any discount given to any single organization based on outcomes needed to be reflected in the Medicaid price.  Since outcomes are subject to random noise, there will inevitably be health plans that end up getting a low price due to worse than expected…

After 190 failed tries…

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…

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…

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…

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…

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…

Orphan Drugs

How can policymakers incentivize innovators to invest in new treatments for rare diseases? One solution policymakers invoked was enacting the Orphan Drug Act of 1983 which provided a number of benefits–including lower tax rates–for innovators who created drugs to treat rare diseases. Was it effective? According to a paper by Miller and Lanthier (2016), the…