scholarly journals Outcome-Based Pricing for New Pharmaceuticals via Rebates

2020 ◽  
Author(s):  
Elodie Adida
Keyword(s):  
Prescription Drugs ◽  
Insurance Coverage ◽  
Treatment Success ◽  
The United States ◽  
Healthcare Management ◽  
List Price ◽  
High Price ◽  
Transfer Payment ◽  
Pharmaceutical Firm ◽  
Risk Sensitive

The price of new brand-name prescription drugs has been rising fast in the United States. For example, the Amgen cholesterol drug Repatha had an initial list price of $14,523 per year. Patients, even with insurance coverage, must pay out of pocket a significant portion of this price. The treatment might not be successful, and this possibility reduces risk-sensitive patients’ incentives to purchase the drug. The high price together with the chance of negative treatment outcomes may lead payers to deny coverage for the drug. Outcome-based pricing has been proposed as a way to reallocate the risks and improve both payer resource allocation and patient access to drugs. According to an outcome-based rebate contract between Amgen and Harvard Pilgrim Healthcare, if a patient on Repatha suffers a heart attack or a stroke, both patient and insurer are refunded the cost of the drug. We use a stylized model to analyze the effect of outcome-based pricing via rebates. Our model captures the interaction between heterogenous, price-sensitive, risk-sensitive patients who decide whether to purchase the drug; a payer deciding whether to provide coverage for the drug; and a price-setting pharmaceutical firm seeking to maximize expected profits. We find that, in many cases, a pharmaceutical firm and payer cannot simultaneously benefit from outcome-based pricing, and who will benefit is determined by the probability of treatment success. Outcome-based pricing thus appears unlikely to solve the issues of high drug prices and high payer expenditures. However, supplementing outcome-based pricing with a transfer payment from firm to payer can make payer and firm (but not necessarily the patients) better off than under uniform pricing when the drug has a low chance of success. This paper was accepted by Stefan Scholtes, healthcare management.

Who Benefits When Prescription Drug Manufacturers Offer Copay Coupons?

2019 ◽  
Vol 65 (8) ◽  
pp. 3758-3775 ◽  
Author(s):  
Gregory J. King ◽  
Xiuli Chao ◽  
Izak Duenyas
Keyword(s):  
Prescription Drug ◽  
Prescription Drugs ◽  
Operations Management ◽  
Insurance Industry ◽  
Empirical Work ◽  
The United States ◽  
Policy Implications ◽  
Insurance Companies ◽  
High Price ◽  
Multiple Drug

The rising cost of prescription drugs is a concern in the United States. To manage drug costs, insurance companies induce patients to choose less-expensive medications by making them pay higher copayments for more-expensive drugs, especially when multiple drug options are available to treat a condition. However, drug manufacturers have responded by offering copay coupons—coupons intended to be used by those already with prescription drug coverage. Recent empirical work has shown that such coupons significantly increase insurer costs without much benefit to patients, who incur lower out-of-pocket expenses with coupons but may eventually see higher costs passed to them. As a result, there is pressure from the insurance industry and consumer advocacy groups to ban copay coupons. In this paper we analyze how copay coupons affect patients, insurance companies, and drug manufacturers, while addressing the question of whether insurance companies would in fact always benefit from a copay coupon ban. We find that copay coupons tend to benefit drug manufacturers with large profit margins relative to other manufacturers, while generally, but not always, benefiting patients; insurer costs tend to increase with coupons from high-price drug manufacturers and decrease with coupons from low-price manufacturers. Although often helping drug manufacturers and increasing insurer costs, we also identify situations in which copay coupons benefit both patients and insurers. Thus, a blanket ban on copay coupons would not necessarily benefit insurance companies. In addition to the policy implications of our work, we make concrete managerial recommendations to insurers. We discuss how they should set formulary selection policies taking into account the fact that drug manufacturers may offer coupons; and we suggest how they can benefit from subsidizing coupons from drug manufacturers with low-price drugs, or from having drug manufacturers compete on price, to receive a favorable formulary position (i.e., copay). This paper was accepted by Yossi Aviv, operations management.

Cancer history, health insurance coverage, and cost-related medication nonadherence and medication cost-coping strategies in the United States.

2018 ◽  
Vol 36 (30_suppl) ◽  
pp. 68-68
Author(s):  
Jingxuan Zhao ◽  
Zhiyuan Zheng ◽  
Xuesong Han ◽  
Amy J. Davidoff ◽  
Matthew P. Banegas ◽  
...  
Keyword(s):  
Health Insurance ◽  
Cancer Survivors ◽  
Coping Strategies ◽  
Health Care Providers ◽  
Prescription Drugs ◽  
Insurance Coverage ◽  
Health Insurance Coverage ◽  
The United States ◽  
Care Providers ◽  
Cancer History

68 Background: Policy makers, health care providers and patients are increasingly concerned about rising costs for prescription drugs and cost-related medication non-adherence (CRN). This study aims to evaluate the relationship between cancer history and CRN as well as cost-coping strategies, by health insurance coverage. Methods: We used the National Health Interview Survey data from 2013-2016 to identify adults age 18-64 with (n = 3 599) and without (n = 56 909) a cancer history. Cost-related changes in medication use included a) CRN (skipping, taking less or delaying medication because of cost), and b) cost-coping strategies (requesting lower cost medication or using alternative therapies to save money). Separate multivariable logistic regressions were used to calculate the adjusted percentages of CRN and cost-coping strategies associated with cancer history, stratified by health insurance. Results: Cancer survivors reported higher percentages of CRN (14.5% vs. 12.1%, P < .001) and were slightly more likely to report using cost-coping strategies (24.4% vs. 22.8%, P = .060) compared with adults without a cancer history. The magnitude of differences in CRN by cancer history varied by insurance type (any private 10.2% vs. 8.6%, P = .034; public only 17.9% vs. 14.2%, P = .010; uninsured 41.0% vs. 33.2%, P = .064). Among the privately insured, the difference in CRN by cancer history was greatest among those enrolled in high deductible health plans (HDHP) without health saving accounts (HSA) (16.9% vs. 10.9%, P = .002). Regardless of cancer history, CRN and use of cost-coping strategies were highest for those uninsured, enrolled in HDHP and without HSA, and without prescription drugs coverage under their health plan (all P < .001). Conclusions: Cancer survivors are prone to CRN and more likely to use cost-coping strategies to minimize financial hardship. Expanding options for health insurance coverage and use of HSA, and prescription drug coverage may be effective strategies to address CRN.

scholarly journals Prescribing of antibiotics and other drugs to children from birth to age 5 in the United States: an observational study

2021 ◽  
Author(s):  
Stephen M Kissler ◽  
Bill Wang ◽  
Ateev Mehrotra ◽  
Michael Barnett ◽  
Yonatan M Grad
Keyword(s):  
United States ◽  
Observational Study ◽  
Prescription Drugs ◽  
Respiratory Infections ◽  
Antibiotic Prescription ◽  
Insurance Coverage ◽  
Antibiotic Use ◽  
The United States ◽  
Cumulative Number ◽  
The Us

Objectives. To inform efforts to reduce pediatric antibiotic use, we measured cumulative pediatric prescriptions for antibiotics and non-antibiotics and how this varies across geography and patient subgroups. Design. Observational study. Setting. United States, 2008-2018. Participants. 207,814 children under age 5 born in the United States between 2008 and 2013 with private medical insurance coverage. Interventions. None. Main outcome measures. Study outcomes included (1) the cumulative number of prescriptions received per child by age 5, (2) the proportion of these prescriptions that were attributable to respiratory infections, (3) the proportion of children who received at least one prescription by age 5, and (4) the fraction of total prescriptions received by the top 20% of prescription recipients. Results. Children received a mean of 8.21 (95% confidence interval [CI] (8.19, 8.22)) prescriptions for antibiotics and 9.81 (95% CI 9.80, 9.82) prescriptions for non-antibiotics by age five. Most antibiotic prescriptions (64%, 95% CI 63, 65) and many non-antibiotic prescriptions (25%, 95% CI 24, 26) were associated with outpatient visits for respiratory infections. By age 5, 93.8% (95% CI 93.4, 94.2) of children had received at least one antibiotic prescription while 88.3% (95% CI 87.9, 88.7) had received at least one prescription for a non-antibiotic. The top 20% of antibiotic prescription recipients accounted for 50.6% of all antibiotic prescriptions, and the top 20% of non-antibiotic prescription recipients accounted for 64.2% of all non-antibiotic prescriptions. Relative to other regions, the South featured higher prescribing rates and earlier time to first prescription. Conclusions. Children in the US receive a substantial number of antibiotics and other prescription drugs early in their lives, largely related to respiratory infections.

Data Processing Improvements for Estimates of Health Insurance Coverage in the Current Population Survey Annual Social and Economic Supplement

2021 ◽  
pp. 107755872110008
Author(s):  
Edward R. Berchick ◽  
Heide Jackson
Keyword(s):  
Health Insurance ◽  
Data Processing ◽  
Current Population Survey ◽  
Population Survey ◽  
Insurance Coverage ◽  
Processing System ◽  
Health Insurance Coverage ◽  
The United States ◽  
Health Insurance Data ◽  
Current Population

Estimates of health insurance coverage in the United States rely on household-based surveys, and these surveys seek to improve data quality amid a changing health insurance landscape. We examine postcollection processing improvements to health insurance data in the Current Population Survey Annual Social and Economic Supplement (CPS ASEC), one of the leading sources of coverage estimates. The implementation of updated data extraction and imputation procedures in the CPS ASEC marks the second stage of a two-stage improvement and the beginning of a new time series for health insurance estimates. To evaluate these changes, we compared estimates from two files that introduce the updated processing system with two files that use the legacy system. We find that updates resulted in higher rates of health insurance coverage and lower rates of dual coverage, among other differences. These results indicate that the updated data processing improves coverage estimates and addresses previously noted limitations of the CPS ASEC.

scholarly journals Evaluation of Blood Stool Test Utilization for Colorectal Cancer Screening in Georgia, USA

Healthcare ◽  
2021 ◽  
Vol 9 (5) ◽  
pp. 569
Author(s):  
Benjamin E. Ansa ◽  
Nicollette Lewis ◽  
Zachary Hoffman ◽  
Biplab Datta ◽  
J. Aaron Johnson
Keyword(s):  
Colorectal Cancer ◽  
Insurance Coverage ◽  
The United States ◽  
Sociodemographic Factors ◽  
Behavioral Risk ◽  
Early Screening ◽  
Annual Percent Change ◽  
Crc Screening ◽  
Behavioral Risk Factor Surveillance ◽  
And Control

Colorectal cancer (CRC) is the third most prevalent cancer and the second most common cause of cancer-related deaths in the United States (USA). Early screening has been demonstrated to improve clinical outcomes for CRC. Assessing patterns in CRC screening utilization is important for guiding policy and implementing programs for CRC prevention and control. This study examines the trends and sociodemographic factors associated with blood stool test utilization (BSTU) for CRC screening in Georgia, USA. The Behavioral Risk Factor Surveillance System (BRFSS) data were analyzed for Average Annual Percent Change (AAPC) in BSTU between 1997 and 2014 among adults aged 50+ who have had a blood stool test within the past two years, and logistic regression analysis of the 2016 data was performed to identify the associated sociodemographic factors. In Georgia, an overall decrease was observed in BSTU, from 27.8% in 1997 to 16.1% in 2014 (AAPC = −2.6, p = 0.023). The decrease in BSTU was less pronounced in Georgia than nationally (from 26.1% in 1997 to 12.8% in 2014 (AAPC = −4.5, p < 0.001)). BSTU was significantly associated with black race/ethnicity (Black vs. White (aOR = 1.43, p = 0.015)), older age (≥70 vs. 50–59 (aOR = 1.62, p = 0.006)), having insurance coverage (no vs. yes (aOR = 0.37 p = 0.005)), and lower income (≥USD 50,000 vs. <USD 25,000 (aOR = 0.70 p = 0.050)). These findings reveal a decrease over time in BSTU in Georgia, with existing differences between sociodemographic groups. Understanding these patterns helps in directing tailored programs for promoting CRC screening, especially among disadvantaged populations.

Universality, Quality & Economics: Finding a Balance in Ontario and British Columbia

1994 ◽  
Vol 20 (1-2) ◽  
pp. 203-229
Author(s):  
John D. Blum
Keyword(s):  
Health Reform ◽  
New Ventures ◽  
The United States ◽  
High Price ◽  
Social Programs ◽  
Policy Makers ◽  
High Expectations ◽  
The Us ◽  
Acceptable Model ◽  
National Economies

National economies worldwide are in disarray, evidenced by escalating debts and growing deficits. As countries struggle with their faltering economies they are hard pressed to fulfill commitments of social programs made in more prosperous times, much less take on new government initiatives. The current experiences in health reform in the United States present an interesting example of the dilemmas governments now face when they embark on new ventures. While great political pressures have been launched and high expectations abound, the reality of American health reform quickly reveals that expanded access will come at a high price that won't be offset easily by conventional cost containment or market forces.In the search for an acceptable model for health reform, it was popular for policy makers and academics to turn their attentions to the health systems of other nations. Recommendations were made that the US should adopt a German or Canadian solution for our health problems.

scholarly journals The convergence of racial and income disparities in health insurance coverage in the United States

2021 ◽  
Vol 20 (1) ◽  
Author(s):  
De-Chih Lee ◽  
Hailun Liang ◽  
Leiyu Shi
Keyword(s):  
Health Insurance ◽  
Low Income ◽  
Insurance Coverage ◽  
Health Insurance Coverage ◽  
The United States ◽  
Combined Effect ◽  
Medical Expenditure ◽  
The Us ◽  
Race Ethnicity ◽  
Vulnerability Measure

Abstract Objective This study applied the vulnerability framework and examined the combined effect of race and income on health insurance coverage in the US. Data source The household component of the US Medical Expenditure Panel Survey (MEPS-HC) of 2017 was used for the study. Study design Logistic regression models were used to estimate the associations between insurance coverage status and vulnerability measure, comparing insured with uninsured or insured for part of the year, insured for part of the year only, and uninsured only, respectively. Data collection/extraction methods We constructed a vulnerability measure that reflects the convergence of predisposing (race/ethnicity), enabling (income), and need (self-perceived health status) attributes of risk. Principal findings While income was a significant predictor of health insurance coverage (a difference of 6.1–7.2% between high- and low-income Americans), race/ethnicity was independently associated with lack of insurance. The combined effect of income and race on insurance coverage was devastating as low-income minorities with bad health had 68% less odds of being insured than high-income Whites with good health. Conclusion Results of the study could assist policymakers in targeting limited resources on subpopulations likely most in need of assistance for insurance coverage. Policymakers should target insurance coverage for the most vulnerable subpopulation, i.e., those who have low income and poor health as well as are racial/ethnic minorities.

Fake Pharmaceuticals: How They and Relevant Legislation or Lack Thereof Contribute to Consistently High and Increasing Drug Prices

2003 ◽  
Vol 29 (4) ◽  
pp. 525-542
Author(s):  
Merri C. Moken
Keyword(s):  
United States ◽  
Prescription Drugs ◽  
The United States ◽  
Pharmaceutical Products ◽  
New Drugs ◽  
Pharmaceutical Companies ◽  
Brand Name ◽  
Potential Factors ◽  
Counterfeit Pharmaceuticals ◽  
New Applications

The use of pharmaceutical products in the United States has increased more than the use of any other health resource from 1960 to 1990. In excess of 9,600 drugs were on the market in 1984, and the Food and Drug Administration (“FDA”) approves approximately 30 new drugs and countless new applications for alterations of already existing drugs each year. In 2001, the $300 billion pharmaceutical industry sold $154 billion worth of prescription drugs in the United States alone, nearly doubling its $78.9 billion in sales in 1997. With such a rapid increase in market domination and expenditures, the U.S. government and many hospitals have focused their attention on the sales and pricing practices of pharmaceutical companies, as well as other potential factors contributing to these escalating prices. One such cause of the steadily increasing prices of brand name pharmaceuticals is the sale of fake or counterfeit pharmaceuticals (also called “look-alike” drugs).

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