Unbiased Analysis of Today's Healthcare Issues
The 340B program requires pharmaceutical firms to give large discounts to hospitals and clinics that serve high volumes of low-income patients. This sounds like a good idea at first: give money to people who can’t afford their medicines. However, when one reads the sentence above closely, it becomes clear that patients don’t receive these discounts:…
Darius Lakdawalla has an very interesting review article in the Journal of Economic Literature on the Economics of the pharmacuetical industry. Do read the whole thing, but below I have listed some highlights. A model of firm R&D decisions Lakdawalla uses a simple model based on Nordhaus (1969) to derive some important implications about pharmaceutical…
The U.S. has a decentralized health care system. This means that depending on your health plan, you may have more or less generous coverage. But how does coverage vary across plans? A recent paper by Chambers et al. (2018) looks specifically at coverage of specialty drugs. Using the Tufts Medical Center’s Specialty Drug Evidence and Coverage…
In the news, we hear a lot about the high cost of pharmaceuticals. Just this week, there are rumors that Donald Trump will give a “major address on drug prices“. HHS Secretary Alex Azar recently stated that “Bold action is on the way’ for drug prices.” At the same time drug rebates are coming under…
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…
If we’re talking about Medicare’s Part D expansion to cover prescription drugs, the answer is yes according to a paper by Dunn and Shapiro (2018). We examine the impact of Medicare Part D on mortality for the population over the age of 65. We identify the effects of the reform using variation in drug coverage…
According the Centers for Medicare and Medicaid Services’ Office of the Actuary (OACT), in 2016 the U.S. spent $328.6 billion on prescription drugs, or 10% of all health care spending. We also see that prescription drug spending increased 1.3% to $328.6 billion in 2016, slower than the 8.9% growth in 2015. These trends towards more…
In his 2018 State of the Union address, President Trump said that “fixing the injustice of high drug prices” will be one of the top priorities of his administration in the coming year. Lower drug prices could directly benefit consumers without insurance or those with high-deductible health plans; commercially insured individuals could hope to see…
Typically, we look at how changes in cost sharing affect patient demand. However, rules regarding patient cost sharing also influence life sciences firms’ decisions about what price they should use for their products. A paper by Herr and Suppliet (2017) looks at the effect of changing cost-sharing rules in Germany in their latest paper. The…
How frequently are pharmaceuticals used off label? Perhaps more than you think. Although these figures are a bit dated, Tabarrok (2000) details the extent of off-label prescribing in the U.S. as follows: According to a study by the U.S. General Accounting Office, 56 percent of cancer patients have been given non-FDA-approved prescriptions, and 33 percent…