Unbiased Analysis of Today's Healthcare Issues
Any economist knows that if you raise the price of a good, demand goes down. Thus, one should not be surprised to find numerous studies that show that increased cost sharing decreases drug utilization. But how does drug utilzation decrease? Is it along the extensive margin (i.e., the decision to initiate the drug) or along the intensive margin…
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…
The Duke-Margolis Center for Health Policy has a great overview of some of the issues related to off-label prescribing. Below is a summary of some key points from this article. What is off-label prescribing? Off-label prescribing and use can take many forms, such as use of an approved drug for an unapproved clinical indication, use at…
Typically, economists believe that subsidizing goods or services increases utilization and the total amount of funds spent on a good. The RAND Health Insurance Experiment (HIE) proved that lowering cost sharing increases total spending on medical goods. Although reducing cost sharing on all medical care is likely to increase total healthcare spending, subsidizing highly effective therapies can actually…
In 2006, the Medicare program was expanded to include prescription drug coverage through the Part D program. Previous studies have found that Medicare Part D improved prescription drug coverage rates among seniors (Levy and Weir,2010), increased medication utilization (Duggan and Morton, 2010), decreased out-of-pocket spending (Engelhardt and Gruber, 2011; Ketcham and Simon, 2008), and reduced medication…
The FDA is planning to put additional scrutiny on the use and approval of opioids in order to prevent opioid abuse and addiction. Here is their plan: Re-examine the risk-benefit paradigm for opioids and ensure that the agency considers their wider public health effects Convene an expert advisory committee before approving any new drug application for an…
Yes it is true. Wang et al. (2015) report: Unlike physician and hospital services, which are universal in Canada, coverage for prescription drugs dispensed outside hospitals falls outside the Canada Health Act and provincial governments only provide public drug programs for some population groups,primarily seniors and social assistance recipients…Canada is still the only country that…
Previously, I described a paper on risk sharing agreements in the US. The National Pharmaceutical Council has a nice video from one of the authors that also summarizes the findings.
NCCN recently released a new approach to measure the value of cancer medicines. The approach–known as Evidence Blocks–evaluates medications on 5 dimensions: Efficacy of regimens, Safety of regimens, Quality and quantity of evidence for regimens, Consistency of evidence for regimens, and Affordability of regimens. Each criteria is ranked on a 1 to 5 block scale.…
What is the 340B program? A May 2015 MedPAC report has a nice summary: The 340B Drug Pricing Program allows certain hospitals and other health care providers (“covered entities”) to obtain discounted prices on “covered outpatient drugs” (prescription drugs and biologics other than vaccines) from drug manufacturers. Manufacturers must offer 340B discounts to covered entities…