Pharmacy Benefit Manager (PBM)
California Legislature Turns Focus on High Drug Pricing
Sammy Chang, Health Policy Researcher March 21, 2018
Last month, we reviewed how the California Assembly is trying to understand cost drivers of healthcare overall. As California has the highest retail drug spending with prescription drug expenditures outpacing overall healthcare spending, high drug pricing has become a specific concern for the Legislature.[1] For the past few years, the Legislature has used bills[2] (like SB 17 (2017)), resolutions (like SJR 29 (2015)), and informational hearings to better understand and control high drug pricing. For example, the Assembly Health Committee (“Committee”) began a series of hearings to understand prescription drug …
Continue Reading Download PDF
The Source Roundup: March 2018 Edition
Source Fellow March 1, 2018
By: Katie Beyer, Student Fellow Happy March! In this edition of the Source Roundup, we cover four academic articles and reports from January and February. The topics this month include: (1) recent state solutions to reduce prescription drug costs, (2) legal challenges to Maryland and Nevada’s prescription drug laws, (3) how the CVS-Aetna deal could reduce healthcare costs, and 4) economic and demographic trends behind increasing healthcare spending. Recent State Solutions Aimed at Reducing Prescription Drug Costs Medicaid spending on outpatient drugs increased 25%, from $22.4 billion in 2013 to …
Continue Reading Download PDF
A Drug Rebate’s Tale: How a Class Action Lawsuit in the 90s Shaped Drug Pricing
Katie Gudiksen, Senior Health Policy Researcher February 24, 2018
Do you ever wonder why it is so hard to know what a prescription drug actually costs? How did we get a system where prices are obscured, even from insurers, and contracts prevent pharmacists from telling patients when they are paying more than they should be? How did the pharmaceutical industry wind up in a world of rebates and complicated contracts with pharmacy benefit managers that result in a lack of transparency for everyone? Setting the Stage: The Lawsuits that Laid the Groundwork To understand how we got …
Continue Reading Download PDF
Source Shorts: White House Releases Report on Drug Pricing
Katie Gudiksen, Senior Health Policy Researcher February 13, 2018
On Friday, February 9, 2018, the White House released a report from the Council of Economic Advisers (CEA) entitled “Reforming Biopharmaceutical Pricing at Home and Abroad”. The report identifies two seemingly conflicting goals of the current administration: 1) reducing domestic drug prices and 2) spurring economic investment in medical innovation. These goals appear to conflict since lower prices would likely mean lower profits for drug companies, resulting in lower investment in research and development. The report also accuses foreign governments of eroding global returns for investment in pharmaceuticals, stating: “nations …
Continue Reading Download PDF
Do Drugs That Treat the Same Indication Compete with Each Other?
Katie Gudiksen, Senior Health Policy Researcher January 23, 2018
High drug prices and the rate at which they are increasing worry most Americans. A quarter of Americans report difficulties affording their medications. Recognizing the need to control spending on prescription drugs, the Federal Trade Commission (FTC) held a workshop on November 8, 2017 entitled “Understanding Competition in Prescription Drug Markets: Entry and Supply Chain Dynamics.” At the workshop, Acting FTC Chairman Maureen K. Ohlhausen asserted that “competition is key to containing prescription drug costs”[1] and Commissioner of the Food and Drug Administration (FDA) Dr. Scott Gottlieb said that …
Continue Reading Download PDF
Has the Problem of Increasing Drug Prices Really Passed?
Katie Gudiksen, Senior Health Policy Researcher November 22, 2017
The rate of increase in spending on pharmaceuticals is declining, according to a Quintiles-IMS Health report from May of 2017.[1] In 2016, the rate of increase in spending on pharmaceuticals was only 4.8% on a net basis (i.e. including rebates and discounts) – less than half that in 2014 and 2015, although it remains much higher than inflation. Express Scripts, one of the largest Pharmacy Benefit Managers (PBMs) in the U.S., reports that in their employer-based plans, per-person spending on prescription drugs increased just 3.8%, much lower than previous years.[2] …
Continue Reading Download PDF
Governor Brown Signs Groundbreaking Drug Price Transparency Bill
Katie Gudiksen, Senior Health Policy Researcher October 13, 2017
What does the California Drug Transparency Bill (S.B. 17) Actually Do? On Monday, October 9, Governor Jerry Brown signed S.B. 17, the California Drug Transparency Bill into law. Brown and the bill’s supporters said the new California law should prompt action in other states and could be used by Congress as a blueprint to help rein in rising drug costs. The Mercury News called the bill “the nation’s most comprehensive law aimed at shining a light on prescription drug prices.” The law becomes effective on Jan 1, 2018 and seeks …
Continue Reading Download PDF
Drug Money Part 2: A Look at 2017 State Legislative Efforts to Reduce Prescription Drug Prices
Source Fellow August 3, 2017
By: Katie Beyer, Student Fellow INTRODUCTION It is no secret that drug prices have been rising at an alarming rate. In fact, spending on prescription drugs rose 12.4% in 2014 and 9% in 2015.[1] In 2015, the U.S. spent $457 billion on prescription drugs, which accounted for 16.7% of overall healthcare services.[2] In 2016, Americans filled 4.4 billion drug prescriptions, at a total cost of approximately $400 billion.[3] On average, Americans spend $1,370 out of pocket on prescription drugs per year.[4] With an average annual price increase of approximately 10% over …
Continue Reading Download PDF
Academic Articles & Reports Roundup: July 2017
Source Fellow August 1, 2017
By: Katie Beyer, Student Fellow Happy August! In this Roundup of articles from the past month, we cover four articles from July. The topics this month include 1) causes of recent drug price increases and how to reduce them|2) recent trends in health spending by state from 1991-2014|3) analysis of SHOP programs in California and Colorado|and 4) justifying universal health insurance. Causes of Recent Drug Price Increases and How to Reduce them The article Getting to the Root of High Prescription Drug Prices summarizes the major causes of rising prescription drug …
Continue Reading Download PDF