Should we move from patents to prizes?

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…

The Status of Outcomes-Based Contracts

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…

My take on American Patients First

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,…

Patient-Centered Formularies: Steps In The Right Direction, But Challenges Remain

That is the title of my latest blog post in Health Affairs with co-author Mark Linthicum.  The premise is as follows: CVS recently announced its new Transform Rheumatoid Arthritis Care initiative, which aims to reshape coverage of rheumatoid arthritis care through “value-based management strategies including outcomes based contracts and a new indication-based formulary for autoimmune…

Outcomes-based pricing for Cardiovascular Disease

An interest Health Affairs blog post on outcomes-based pricing from Daniel M. Blumenthal Samuel Nussbaum Neil J. Weissman and Mark Linthicum. Insurers are increasingly tying health service payments to clinical outcomes to improve care value and quality. Outcomes-based pricing—setting treatment reimbursements to reflect their prospectively determined value to patients and the health care system—is a promising alternative payment…