Affiliation:
1. The Wharton School, University of Pennsylvania, Philadelphia, Pennsylvania, USA
Abstract
Abstract
This paper examines the issue of prices, relative to value, for cancer drugs. The analysis focuses on the effects on manufacturer pricing incentives of insurance coverage, specifically, the effectiveness of patient cost sharing, incentives created by reimbursement rules for physician-dispensed drugs, and payer ability and incentives to negotiate discounts. For pharmacy-dispensed cancer drugs, both Medicare Part D prescription drug plans (PDPs) and private payers' pharmacy benefit managers are increasingly placing these drugs on specialty tiers that offer no leverage for negotiating discounts and imply often unaffordable cost sharing for patients who lack catastrophic coverage. Simulation analysis of financial risks faced by PDPs confirms their incentives to place costly drugs on specialty tiers if more preferred formulary placement would increase use, possibly because of adverse selection risk. Faced with largely price-insensitive consumers and payers, manufacturers would rationally charge high prices. This situation is exacerbated for physician-dispensed cancer drugs, where Medicare's average selling price plus 6% reimbursement rule favors high-priced drugs. Because U.S. payers do not require evidence on prices relative to value, U.S. data are unavailable to test whether prices are higher, relative to value, for cancer drugs than for other drugs. Evidence from the Canadian Common Drug Review on cost-utility values suggests that cancer drugs are relatively high priced, although conclusions are tentative because of very small samples and non-U.S. data. Making such outcomes-adjusted prices available in the U.S. would be helpful to physicians, payers, and patients and indirectly constrain pricing to align with value.
Publisher
Oxford University Press (OUP)
Reference7 articles.
1. How should we pay the piper when he's calling the tune? On the long-term affordability of cancer care in the US;Ramsey;J Clin Oncol,2007
2. Does reimbursement influence chemotherapy treatment for cancer patients?;Jacobson;Health Aff (Millwood),2006
3. The tier 4 phenomenon: Shifting the high cost of drugs to consumers.”;Walsh;AARP Strategic Analysis & Intelligence Briefing Report,2009
Cited by
49 articles.
订阅此论文施引文献
订阅此论文施引文献,注册后可以免费订阅5篇论文的施引文献,订阅后可以查看论文全部施引文献