Do specialty drugs provide good value?

Specialty drugs have greatly improved quality and duration of life for many patients.  Specialty drugs have been developed for a variety of illnesses, such as cancer, hepatitis C, rheumatoid arthritis, and multiple sclerosis.  However, these drugs are typically very expensive.  Are they worth the cost? A paper by Chambers et al. (2014) find the following: …specialty drugs offered…

Pharmaceutical Cost Offsets

Does increasing use of prescription drugs decrease cost?  There is evidence on both sides of the aisle.  However, a recnet paper by Deb, Trevedi and Zimmer (2014) does find evidence of cost offsets using a sophisticated copula-based bivariated dynamic hurdle model.  This model, models drug and non-drugs spending and for each dimensions models the probability…

Longer trials or larger sample size?

Developing drugs is expensive. Some estimates have estimated that the cost of bringing a drug to market is $1 billion. In addition, payers are now reimbursing based on the perceived value of a treatment. That is, treatments that provide more health benefits receive higher reimbursements. In this world of value-based pricing (VBP), pharmaceutical companies have…

What is Reference Pricing?

To reduce utilization of pharmaceutical products, many countries have opted to use reference pricing. Reference pricing is a system where patient coinsurance payments depend not only on the price of the drug but also the price of alternatives therapies.  As the name indicates, reference pricing sets patient coinsurance rates as the difference between the drug’s…

First biosimilar hits the market

Making a generic version of a single molecule drug is fairly straightforward.  Making a replica of a biologic treatment, however, is not.  Nevertheless, Congress signed into law the Biologics Price Competition and Innovation Act of 2009 (BPCI Act) to create a fast-track approval process for biological products that are demonstrated to be highly similar an FDA-approved biological product.  These products…

How the FDA evaluates Cancer Drugs

The Food and Drug Administration (FDA) reviews and approves all drugs. But what criteria does the FDA use to evaluate new drugs? Namely that they are effective (i.e., improve health outcomes) and safe (i.e., have limited adverse health events). In a 2007 guidance document from the FDA’s Center for Drug Evaluation and Research (CDER) and…

Too much competition?

Rarely due consumers think that too much competition is a problem.  According to the Centers for Medicare and Medicaid Services (CMS), however, this is a major issue for consumers when they choose Part D prescription drug health plans.  Avalere reports that: Proposed revisions to the meaningful differences policy will restrict the market’s top sponsors from…

Quotation of the Day: Pricing of Biosimilars

Bilsimilars are biologic medical products whose active drug substance is made by a living organism or derived from a living organism by means of recombinant DNA or controlled gene expression methods. Biologic drugs can be patented, but once the patents expire, biosimilars can enter the market. Are biosimilars> priced similarly to generics? According to Ana…