Unbiased Analysis of Today's Healthcare Issues
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…
In one of his first acts as California Governor, Gavin Newson has proposed a way to reduce drug price: let California use its size to negotiate directly with pharmaceutical firms. As the N.Y. Times reports: [O]n Monday, Mr. Newsom signed an executive order proposing a plan that would allow California to directly negotiate with drug manufacturers. The…
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…
The 21st Century Cures Act, enacted December 2016, mandated that the FDA consider how to use real-world evidence (RWE) to bring innovative treatments to market faster. To meet this statutory requirement, the FDA has provided guidance outlining its policies for using RWE to support the approval of a new drug indication. What is real-world evidence?…
Many people think that once a treatment is approved, your insurance automatically covers the treatment. However, that is no longer the case. Some health plans may keep certain drugs off of formularies. Others health plans have drugs on formulary but may require step edits (failing another drug first before moving to the novel treatment) and…
Pharmacists are often seen as individuals who just dispense drugs. However, pharmacists are increasingly considered as providers that are part of the broader health care team. My own research has shown that pharmacists are a more cost-effective and safe approach to getting vaccinations compared to primary care providers (see Fontanesi et al. 2009). A Health Affairs Entry…
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 recent report from Assistant Secretary for Planning and Evaluation (ASPE) found that for about 30 physician administered drugs, prices are 8 times as high as those charged in other developed countries. To address the high prices, President Trump unveiled a three-part plan to reduce drug prices. Under the “international pricing index” proposal, U.S. drug…
I ask this question in economic terms. Luxury goods are defined as goods that increase as a share of a person’s (or country’s) budget as income increases; necessity goods are defined as goods that decrease as a share of a person’s (or country’s) budget as income increases. There is actually mixed evidence on the topic…
In 2010, Premera Blue Cross (Premera), a large nonprofit health plan in the Pacific Northwest implemented a value-based formulary design for its beneficiaries. In essence, enrollees could purchase high-value treatments for low copayments and low-value treatments for higher copayments. Can we use this change from more standard to value-base formulary designs to estimate the price elasticity…