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  #221  
Old 01-03-2018, 05:36 PM
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YetAnotherCareerChanger YetAnotherCareerChanger is offline
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Originally Posted by George Frankly View Post
Inpatient events (lots of surgery, and quite a bit of acute care), radiation therapy, and imaging rack up a lot of cost, so drugs are 'only' about half.

We have some proprietary stuff, sure. We're also heavily invested in the CMMI Oncology Care Model, which you can google. It features both cost and quality components. The basic framework is that they measure savings (which is complicated enough). If you generate savings under their rules (big if!), then how well you do on about a dozen quality metrics determines how much of the savings gets paid to you. So, to succeed, you have to both reduce cost and take good care of your patients.

We have done capitated deals, but we cannot cap drugs, because there is too much risk. We've done some deals based solely on quality metrics. We did... I think 2-3 deals that are solely total cost deals. Most of what we've done, and what we're negotiating now, have both components.
That's really interesting, I've worked on the carrier side of these arrangements but mostly with primary care situations. I don't work in Health anymore but that was a lot of fun doing the calculations for new rates & risk sharing agreements.

Thanks for the CMMI reference, I'll try to read it on the bus tomorrow!
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  #222  
Old 05-23-2018, 11:53 AM
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Drug to treat chronic leukemia triples in price, after research indicates it can be used at lower doses. So patients may now take less of the drug, but it'll cost the same as before.

CMS spent $978M on Imbruvica in 2016 (most recent data I have), just to level set.

Last edited by George Frankly; 05-23-2018 at 12:05 PM.. Reason: Read some things wrong, sorry!
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  #223  
Old 05-24-2018, 03:45 PM
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This thread is quite long, so this is probably not a new thought, but I don't understand why pharma can't be regulated the same way insurance is.

If the government is going to be poking around in healthcare for the greater good anyway, why not just enforce price transparency on pharma? Along with FDA approvals also force them to submit a filing justifying the initial AWP, with all price increases after that being subject to rate review.

Raises the burden of price change on pharma, which should drive greater price stability and predictability (assuming price changes would be put on a renewal schedule) while also generating some nice new government jobs for the review load, probably employing a handful more actuaries to help with filings on the pharma side, and most importantly keeping costs contained. With pharma costs contained then that helps with the long-term viability of Medicare and would also have all sorts of positive echo effects economically.

Literally the only downside is that it would require somebody powerful to stand up to Big Pharma, and the only downside of that is that it will never happen.
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  #224  
Old 05-24-2018, 03:49 PM
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I don't understand why pharma can't be regulated the same way insurance is.
You answered your own question a few sentences later:

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Literally the only downside is that it would require somebody powerful to stand up to Big Pharma, and the only downside of that is that it will never happen.
It would be a good idea though. Maybe automatic approval for prices that are within 5% of last year's prices and/or under a certain cost threshold. (Like if the standard prescribed dosage results in a cost that works out to less than $30 per day then you don't have to bother filing; it's just automatically approved.)
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  #225  
Old 05-24-2018, 05:15 PM
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Standing up to pharma, yes.

Also, you use the word 'regulated.' That's a four-letter word too a good number of Americans.
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  #226  
Old 05-25-2018, 09:04 AM
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Originally Posted by Evolus1 View Post
This thread is quite long, so this is probably not a new thought, but I don't understand why pharma can't be regulated the same way insurance is.

If the government is going to be poking around in healthcare for the greater good anyway, why not just enforce price transparency on pharma? Along with FDA approvals also force them to submit a filing justifying the initial AWP, with all price increases after that being subject to rate review.

Raises the burden of price change on pharma, which should drive greater price stability and predictability (assuming price changes would be put on a renewal schedule) while also generating some nice new government jobs for the review load, probably employing a handful more actuaries to help with filings on the pharma side, and most importantly keeping costs contained. With pharma costs contained then that helps with the long-term viability of Medicare and would also have all sorts of positive echo effects economically.

Literally the only downside is that it would require somebody powerful to stand up to Big Pharma, and the only downside of that is that it will never happen.
The biggest problem with drug pricing is the monopoly power of the drug manufacturers. If you want to solve high drug costs, look to limit monopoly power. Requiring pricing approval is one method. We can look to utility companies to see if that kind of review is actually effective in controlling prices. I suspect that the additional regulatory costs would significantly increase the cost of most drugs while causing a slight decrease in some of the dramatic price changes we see in cases like this.
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  #227  
Old 05-25-2018, 10:10 AM
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I suspect that the additional regulatory costs would significantly increase the cost of most drugs while causing a slight decrease in some of the dramatic price changes we see in cases like this.
I think it would be trivial to ensure this isn't the case.

First, this should only apply to brand, not generic. Once you make that distinction you've removed almost all inexpensive drugs from your pool, and regulatory costs should have a negligible impact on the drugs that are left.

We're talking about cases where the margin is hillariously close to 100% on a sizable nominal gross value, so reductions in price could swamp regulatory cost on almost everything.
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  #228  
Old 05-25-2018, 01:19 PM
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The biggest problem with drug pricing is the monopoly power of the drug manufacturers. If you want to solve high drug costs, look to limit monopoly power. Requiring pricing approval is one method. We can look to utility companies to see if that kind of review is actually effective in controlling prices. I suspect that the additional regulatory costs would significantly increase the cost of most drugs while causing a slight decrease in some of the dramatic price changes we see in cases like this.
The problem is that if you get rid of the monopoly then you get rid of the incentive for drug companies to develop new drugs.

For this particular problem, I'd rather preserve the monopoly and then allow a handsome but not extortionate profit.
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  #229  
Old 05-30-2018, 11:32 AM
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Originally Posted by WhosOnFirst View Post
The biggest problem with drug pricing is the monopoly power of the drug manufacturers. If you want to solve high drug costs, look to limit monopoly power. Requiring pricing approval is one method. We can look to utility companies to see if that kind of review is actually effective in controlling prices. I suspect that the additional regulatory costs would significantly increase the cost of most drugs while causing a slight decrease in some of the dramatic price changes we see in cases like this.
Just lower the time frame on patents for drugs. 20 years is far too long.
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  #230  
Old 05-30-2018, 11:32 AM
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The problem is that if you get rid of the monopoly then you get rid of the incentive for drug companies to develop new drugs.

For this particular problem, I'd rather preserve the monopoly and then allow a handsome but not extortionate profit.
How many more do we need?
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