Unbiased Analysis of Today's Healthcare Issues
Below are some excerpts from seminal papers examining how changes in reimbursement or market size affect pharmaceutical innovation. Acemoglu and Lin (2004): Our estimates suggest that a 1 percent increase in the size of the potential market for a drug category leads to a 6 percent increase in the total number of new drugs entering the…
That is the question that Lakdawalla et al. (2017) attempt to answer in the latest edition of the American Journal of Managed Care (AJMC). The long-run average cost (LAC) of a pharmaceutical includes not only initial branded drug price, but also subsequent prices increases and decreases, especially those that occur after a treatment’s patent has expired…
As research in new cancer treatments has grown, scientists may have run into a serious roadblock: there many not be enough patients to fill the needed clinical trials. As the New York Times reports: There are too many experimental cancer drugs in too many clinical trials, and not enough patients to test them on. The logjam…
Clinical trials for cancer treatments aim to demonstrate whether one treatment is better than another. What is of most interest to patients, providers and payers, however, is which treatment works best in the real-world, not in a randomized controlled trial. Further, clinical trials often use progression free survival to measure treatment outcomes rather than overall…
The obvious answer seems to be ‘yes’. Why would pharmaceutical companies spend billions of dollars on drug detailing (i.e., visits by pharmaceutical representatives to physicians to explain drug benefits) and drug samples if they don’t work? When I say billions, I mean billions: A new study by Datta and Dave (2017), however, finds that drug…
Let’s say a you fill a 30-day prescription and the list price of the drug is $100. Let’s say that you pay a $10 copay and your insurer pays $90. What share of this $100, does the drug company receive. Most people would guess pretty close to $100, but a recent report by Aaron Vandervelde and…
I have an article up at the Washington Post‘s In Theory blog titled How we should pay for cures, according to economics. Imagine a major medical breakthrough: a cure for Alzheimer’s. Imagine that cure not only would improve the cognitive abilities of the more than 5 million Americans living with Alzheimer’s but also would give these patients…
Currently, pharmaceutical treatments that are used in the U.S. need to gain an approval from the FDA. The FDA’s approval is contingent on a demonstration of efficacy and safety in a randomized controlled trial (RCT). However, precision medicine makes the standard FDA approval problematic. As described in Breckenridge et al. (2016), in the precision medicine…
How do Euroepan countries reimburse for pharmaceuticals? A paper by Pauwels et al. (2014) provides an nice summary. I review that article today. With the exception of Germany, most countries had a national and/or regional drug budget. Germany is also unique in that only Germany and the UK allow for free pricing, whereas other countries…
Dana Goldman–my colleague at PHE and a professor at USC–offers three suggestions on how to prevent generic products from increasing their prices drastically as occurred in the EpiPen saga. In Stat News, he makes three recommendations: First, Congress should mandate that the Federal Trade Commission report on the availability of all such drugs and devices…