I could try to summarize it, but you’re probably better off just clicking over the Adam Fein’s latest post at Drug Channels today. Adam take a deep dive into the incentives around pricing under the IRA, concluding that the law is likely to further encourage payers to push for high-list, high-net products. This is a big deal.
The underlying reality here is how different parts of the health care system are reimbursed under the new Part D benefit: health plans will be on the hook for more of the cost of therapies when there isn’t a big disparity between list and net prices. There’s a lot of math, but Adam’s explanations are clear.
One of the weird upshots, per Adam: “For a product with a maximum fair price (MFP) equal to its current net price, the manufacturer’s net revenues will rise, while plan costs will go up!”
That suggests that payers will want to try to disincentivize use of the very medicines where the government is working to drive down prices. Others have sounded the alarm on the possibility of health plan utilization-management shenanigans in the past, but CMS has specifically declined to require payers to do anything but put price-controlled medicines on formulary.
It will be fascinating to see whether and how plans try to limit access to those price-controlled drugs … and whether the government calls them on it.
My erstwhile colleagues at Real Chemistry, along with Michigan’s Mark Fendrick, who runs the V-BID Center, have a worthwhile new paper out on out-of-pocket spending. The piece is interesting because it doesn’t take OOP spending as a monolith but rather breaks such spending down into 31 different subcategories.
Some forms of OOP spending are clear and obvious: paying out of pocket at the pharmacy is a no-brainer example. But there are other, more subtle expenses that patients are faced with, from the costs of caregiving to the cost of education to the cost of parking or meals.
Their review of the literature found that those 31 subcategories weren’t always well-measured (if they were measured at all), suggesting that we’re really not having the conversations we need to have about the true burden of OOP spending.
“As OOP health care spending continues to increase and policymakers consider efforts to minimize financial barriers to care, it is imperative that the full scope of OOP costs faced by patients and unpaid caregivers is documented and understood to support effective interventions to reduce financial burden and increase access to needed care, especially among historically marginalized groups that face disproportionately higher OOP costs and additional challenges to accessing health care.”
As OOP health care spending continues to increase and policymakers consider efforts to minimize financial barriers to care, it is imperative that the full scope of OOP costs faced by patients and unpaid caregivers is documented and understood to support effective interventions to reduce financial burden and increase access to needed care, especially among historically marginalized groups that face disproportionately higher OOP costs and additional challenges to accessing health care.
This KFF tracking poll is not particularly useful, particularly for those interested in pharmaceutical policy. But it reflects a broader reality in society now, which is that every poll question is now filtered through a respondent’s politics. I don’t think that Republicans are actually substantially more worried about food prices than Democrats. It’s just that one party is bombarded with messages about inflation at a much higher rate.
Actually, the KFF poll is useful in one way: it’s an illustration of the fact that most Americans don’t have the slightest idea what’s going on in health policy. Hardly anyone knows that Obamacare prevents discrimination from those with pre-existing conditions or that the rate of marketplace sign-ups is increasing. Maybe that’s not a terrible thing to be ignorant about, all things considered. But it’s a reminder that just because I care about something doesn’t mean that anyone else does.
Mark your calendars: March 7, 10 a.m. ET. That’s when a judge will hear arguments on four different IRA cases (from BMS, J&J, Novo, and Novartis). The hearing will follow the outline that the four companies were pushing; the judge rejected a request from the government to break up the hearings. I don’t know that there’s much to read into this, other than the judge in this case has heard enough and is ready to get the show on the road.
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