Canada’s single payer system doesn’t cover drugs?

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…

“Best price”

What price does Medicaid pay for drugs? The answer is, the “best price”.  What is “best price?” The 1990 Omnibus Reconciliation Act (OBRA) codified that pharmaceutical manufacturers must give Medicaid steep discounts in order to receive coverage by state Medicaid agency.  How big are the discounts?  The answer is the larger of a fixed percentage of the…

The end of dose-based drug pricing?

A Health Affairs post by Dana Goldman and Darius Lakdawalla argues that dose-based pricing for pharmaceuticals is suboptimal.  They make a clear distinction between typical goods, where cost and benefits are roughly proportional to quantity consumed, and pharmaceuticals. Buying two bunches of bananas naturally costs twice as much as one bunch. Twice as many bananas can…

Risk Sharing Agreements in the US

Outcomes-based risk sharing agreements tie reimbursement for medical goods or services to patient outcomes.  Despite the increasing demand from policymakers for value-based payment mechanism, risk-sharing agreements are not that comment.  A paper by Garrison et al. (2015) found that there were only 148 risk sharing agreements (RSAs) worldwide between the late 1990s and 2013 and only 18 of the…

Donuts and drugs

Medicare patients are likely to discontinue their medication in December. Why? Are they busy with the Christmas holidays? Do they have additional expenses for gifts and limited funds for prescription drugs? Perhaps. Another idea advanced by Kaplan and Zhang (2014) is that Medicare’s benefit structure encourages discontinuation. Why is that? Medicare’s Part D drug plan…