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This article explains the complex and opaque pricing structure of drugs in the United States; how it exposes patients to higher out-of-pocket payments, including for drugs such as insulin; and policy changes that may offer relief. [ABSTRACT FROM AUTHOR]

The COVID-19 pandemic has revealed the vulnerability of the US generic drug supply chain to foreign production. Many policies have been proposed to mitigate this vulnerability. In this article, we argue that nonprofit drug manufacturers have the potential to make important contributions. [ABSTRACT FROM AUTHOR]

The United States relies primarily on market forces to determine prices for drugs, whereas most other industrialized countries use a variety of approaches to determine drug prices. Branded drug companies have patents and market exclusivity periods in most industrialized countries. During this period, pharmaceutical companies are allowed to set their list price as high as they prefer in the United States owing to the absence of government price control mechanisms that exist in other countries. Insured patients often pay a percentage of the list price, and cost sharing creates some pressure to lower the list price. Pharmacy benefit managers negotiate with drug companies for lower prices by offering the drug company favorable formulary placement and fewer utilization controls. However, these approaches appear to be less effective, compared with other countries' approaches to containing branded drug prices, because prices are substantially higher in the United States. Other industrialized countries employ various forms of rate setting and price regulation, such as external reference pricing, therapeutic valuation, and health technology assessment to determine the appropriate price. [ABSTRACT FROM AUTHOR]

Importance: Although independent charity patient assistance programs improve patient access to costly prescription drugs, recent federal investigations have raised questions about their potential to increase pharmaceutical spending and to violate the federal Anti-Kickback Statute. Little is known about the design of the programs, patient eligibility, or drug coverage.Objective: To examine the eligibility criteria of the independent charity patient assistance programs and the drugs covered by them.Design, Setting, and Participants: Descriptive cross-sectional study of the 6 largest independent charities offering patient assistance programs for patients including, but not limited to, Medicare beneficiaries in 2018. These charities offered 274 different disease-specific patient assistance programs. Drugs were identified for subgroup analysis that had any use reported on the Medicare Part D spending dashboard and any off-patent brand-name drugs that incurred more than $10 000 in Medicare spending per beneficiary in 2016.Exposures: Support by independent charity patient assistance programs.Main Outcomes and Measures: The primary outcomes were the characteristics of patient assistance programs, including assistance type, insurance coverage (vs uninsured), and income eligibility. The secondary outcomes were the cost of the drugs covered by the patient assistance programs and the coverage of expensive off-patent brand-name drugs vs substitutable generic drugs.Results: Among the 6 independent charity foundations included in the analysis, their total revenue in 2017 ranged from $24 million to $532 million, and expenditures on patient assistance programs ranged from $24 million to $353 million, representing on average, 86% of their revenue. Of the 274 patient assistance programs offered by these organizations, 168 (61%) provided only co-payment assistance, and the most common therapeutic area covered was cancer or cancer treatment-related symptoms (113 patient assistance programs; 41%). A total of 267 programs (97%) required insurance coverage as an eligibility criterion (ie, excluded uninsured patients). The most common income eligibility limit was 500% of the federal poverty level. The median annual cost of the drugs per beneficiary covered by the programs was $1157 (interquartile range, $247-$5609) compared with $367 (interquartile range, $100-$1500) for the noncovered drugs. Off-patent brand-name drugs (cost: >$10 000) were covered by a mean of 3.1 (SD, 2.0) patient assistance programs, whereas their generic equivalents were covered by a mean of 1.2 (SD, 1.0) patient assistance programs.Conclusions and Relevance: In 2018, among 274 patient assistance programs operated by the 6 independent charity foundations, the majority did not provide coverage for uninsured patients. Medications that were covered by the patient assistance programs were generally more expensive than those that were not covered. [ABSTRACT FROM AUTHOR]

Hospital executives are under continual pressure to control spending and improve quality. While prior studies have focused on the relationship between overall hospital spending and quality, the relationship between spending on specific services and quality has received minimal attention. The literature thus provides executives limited guidance regarding how they should allocate scarce resources. Using Medicare claims and cost report data, we examined the association between hospital spending for specific services and 30-day readmission rates for heart failure, pneumonia, and acute myocardial infarction. We found that occupational therapy is the only spending category where additional spending has a statistically significant association with lower readmission rates for all three medical conditions. One possible explanation is that occupational therapy places a unique and immediate focus on patients' functional and social needs, which can be important drivers of readmission if left unaddressed. [ABSTRACT FROM AUTHOR]

A letter to the editor is presented regarding variations in the ratio of physician charges to Medicare payments by specialty and region.

Objectives. To examine whether the share of pharmaceutical industry funds allocated to patient advocacy organizations (PAOs) is disproportionately large in the United States relative to other industrialized countries and to compare pharmaceutical companies' disclosure practices across industrialized countries. Methods. We examined funding of PAOs among the 10 largest pharmaceutical companies in 2016. We compared funding allocated to organizations across 8 large industrialized countries and pharmaceutical companies' disclosure practices in each country. Results. Only 6 of the 10 largest pharmaceutical companies disclosed their financial transactions with PAOs in the United States. All 10 companies disclosed transactions in France, Germany, and the United Kingdom, with varying levels of disclosure in other countries. In 2016, the 6 companies that disclosed transactions in the United States allocated 74% of their patient advocacy funding ($88 million) in the United States. Conclusions. The disproportionate funding of US PAOs in the absence of any disclosure requirements suggests that the United States should consider adoption of regulatory actions to enhance the transparency of relationships between the pharmaceutical industry and PAOs, and to ensure the integrity of public health decision-making. [ABSTRACT FROM AUTHOR]

The article presents the authors' perspective on the significance of market-based solutions as an alternative approach to stimulate generic-drug market competition. They mention that one solution is to set up a nonprofit generic-drug manufacturer having a mission to develop affordable versions of essential drugs. They say that the tax-exempt status of the manufacturer will permit it to depend on patent donations and charitable contributions from brand-name drug manufacturers.

The prices patients pay for brand-name medications are rising faster than many other medical care costs. Some observers claim that the business practices of pharmaceutical benefit managers are partly responsible. How the process works is complicated, and this article explains what is happening. [ABSTRACT FROM AUTHOR]

Objectives: To examine the uptake of filgrastim-sndz (Zarxio), the first biosimilar to launch in the United States, in the Medicare Part B fee-for-service program from its launch in September 2015 to December 2017 and compare characteristics of patients and facilities that used filgrastim-sndz or originator filgrastim (Neupogen).Methods: The 20% sample of Medicare Part B fee-for-service administrative claims data was used to extract information on claims for any filgrastim product between January 1, 2015 and December 31, 2017.Results: The utilization of filgrastim-sndz in Medicare Part B increased sharply between January and August 2016, surpassing filgrastim by November 2017, contributing to a 30% decrease in overall spending on this drug since 2015. Uptake was faster and larger in physician practices compared with hospital outpatient departments. About 77% of patients receiving filgrastim-sndz were new users. Utilization patterns indicated that product selection occurred at the facility level, rather than being at the discretion of the prescribing physician or driven by patient characteristics.Conclusion: Uptake of biosimilar filgrastim in the Medicare Part B program occurred despite multiple challenges to the adoption of biosimilars in the US market, suggesting that substantial potential savings could be generated by improving biosimilar uptake. Our findings indicated that physician practices and hospital outpatient departments have distinctive biosimilar uptake patterns. Thus policy makers aiming to contain Medicare Part B spending might consider focusing on incentivizing biosimilar uptake among hospital outpatient departments. [ABSTRACT FROM AUTHOR]

The authors explore the implications of the recent success of the Graduate Nurse Education (GNE) Demonstration for Medicare policy. They describe the effectiveness of a new model of organizing and paying for graduate nurse education that involves consortia of hospitals, health systems, community partners, and university nursing schools. They also present a graph that shows Medicare payments for hospitals for nursing and allied health training from 1991 to 2015.

Increasing insurance deductibles have prompted some medical centers to initiate transparent pricing. However, the impact of price transparency (PT) on surgical volume, revenue, and patient satisfaction is unknown, along with the barriers to achieving PT. We identified ambulatory surgical centers in the Free Market Medical Association database that publicly list prices for surgical services online. Six of eight centers (75%) responded to our data collection inquiry. Among five centers that reported their patient volume and revenue after adopting PT, patient volume increased by a median of 50 per cent (range 10-200%) at one year. Four centers (80%) reported an increase in revenue by a median of 30 per cent (range 4-75%), whereas three centers (60%) experienced an increase in third-party administrator contracts with the average increase being seven new third-party administrator contracts (range = 2-12 contracts). Three centers (50%) reported a reduction in their administrative burden and five centers (83%) reported an increase in patient satisfaction and patient engagement after PT. The leading barrier reported to making prices transparent was discouragement from another practice, hospital, or insurance company. The findings of this preliminary study may help guide medical practices in designing and implementing PT strategies. [ABSTRACT FROM AUTHOR]