From the desk of David Whitrap
Hello everyone. As you sip your morning cup of coffee, just remember that personal finance gurus really, really wish you would’ve brewed it yourself at home. This week, let’s take a look at:
- ICER in the News: An NPR profile about ICER’s growth into an important watchdog; and ICER’s president explains why the QALY continues to be an important tool that can help all patients achieve high-value care.
- Pharmaceutical News: How the pharmaceutical lobby became so successful batting away any sort of US price regulation; an examination of which potential policies would be needed to target the multiple types of dysfunction in the pharmaceutical market; Senator Harris unveils a drug-pricing solution that sounds a lot like the International Price Index; a rare pro-vaccine statement from President Trump; and a good lesson on why it’s probably just best to avoid cross-industry analogies when discussing the price of prescription drugs.
ICER in the News
This week on its nationally syndicated program “Here & Now,” NPR aired a profile about ICER’s growing influence in the US health system. As part of the segment, ICER’s president Dr. Steve Pearson explains how he views our role:
“Ultimately, we want to be able to figure out what a fair price is so that we can get better access and make [prescription drugs] affordable and sustainable for the long-term, while making sure that we reward [drug manufacturers that] really bring good innovation into our system.”
Some organizations have recently vilified the Quality-Adjusted Life Year (QALY) — erroneously — as a tool that’s used to choose which patients gain access to a particular drug. However, this is a clear misunderstanding and/or misrepresentation of the QALY. As ICER’s Dr. Pearson explains in a commentary recently published in the Journal of Law, Medicine & Ethics, cost-effectiveness analysis is used to compare treatments within conditions, NOT people within treatments. He goes on to discuss the true objectives of ICER’s work, and why cost-effectiveness analyses are increasingly important in our current health system:
“Cost-effectiveness analyses based on the QALY — or a similar measure — is useful for a very important reason: the current drug pricing and insurance system is broken and hurts patients every day. An objective look at how well drugs improve both quality and length of life leads to a more honest discussion about whether the prices set by drug makers are fair. It sets a clear target for price negotiation; when negotiation leads to fair prices, innovative treatments that make a real difference in patients’ lives get their due reward, patients and insurers save money when it could be put to better use elsewhere, and patients reap the ultimate benefits of broader access to more affordable health care.”
Why the Coming Debate Over
the QALY and Disability Will be Different
(Journal of Law, Medicine & Ethics)
In a special feature spanning more than a dozen interviews with an array of Washington insiders, STAT’s Nick Florko and Lev Facher explain why — despite all the politicians’ fiery rhetoric against high drug prices — the pharmaceutical industry’s time-honored lobbying and advocacy strategies have kept both lawmakers and the Trump administration from landing any of their prescription-drug punches.
But if lawmakers can ever look beyond K Street, what drug price policies would actually do the most good? Austin Frakt, writing for the New York Times, explains the various types of dysfunction within the pharmaceutical market, and why each type of problem probably requires its own solution.
There Is No Single, Best Policy
for Drug Prices
(The New York Times)
So let’s take a closer look at some of the current proposals. Congressional Budget Office staffers estimated Wednesday that a compromise Senate package to cap drug price hikes would save money for both the government and Medicare beneficiaries. A full CBO score is expected Friday, and a vote on the package is still possible before Congress leaves for its recess in early August.
CBO projects Senate drug-pricing proposal
will save money
Democratic presidential candidate Kamala Harris unveiled a plan on Tuesday to crack down on pharmaceutical companies which overcharge for prescription drugs, making her the latest 2020 White House candidate to seize on the issue. Similar to the International Price Index supported by President Trump, the centerpiece of Senator Harris’ plan is a restriction on drug makers from charging more in the US than the average price paid in comparable countries around the world.
As the FDA grapples with rising pressure to approve new medicines more quickly, a new analysis finds the agency disagreed with its expert advisory panels about one-fifth of the time.
President Trump is readying an executive order that would direct HHS to overhaul the development of flu vaccine and encourage more Americans to get vaccinated. The move represents a significant reversal from a president who spent years attacking the safety of vaccines prior to taking office.
And finally this week, NPR explored the various analogies people use to try to explain high drug prices. Turns out, no other market operates anything like the US pharmaceutical market, so if you try to make a cross-industry comparison to better explain what’s really going on, do so at your own risk.