Thinking About Drug-Pricing In a Way that Is Compelling, Simple and Wrong

Quick one today, but the good news is that there’s not much popping. The plan is for Cost Curve to be off tomorrow, back Thursday. (Famous last words.)

There is an old saw about construction: building can be fast, can be quality, and can be cheap, but you can only pick two. Want something done well and done quickly? Prepare to pay. Willing to wait? You can get your dream house.

That’s the idea behind a new STAT op-ed that suggests that health system have a “pick two” conundrum. We can have cheap meds, low out-of-pockets and broad access, but only two of them.

It’s a neat way of thinking about the problem, and the authors -- two Boston University professors -- suggest that it underscores the dilemma in the U.S. system, where patients demand all three but payers, as stewards of the system, must push back to keep the system in balance. (Other countries, too, face this challenge, the op-ed posits, noting that the U.K. has low list prices, low out-of-pockets, but poor access.)

It’s also the wrong way of thinking about the problem. Patients in the U.S. don’t care about the list price of medicines. They want effective medicines. Or, to be more economic and charitable to the author’s intentions, patients want high-value medicines.

“Low-priced medicines” and “high-value medicines” are different concepts, and confusing them plays into the dysfunction of the U.S. system, where a myopic focus on controlling costs often means that access is compromised even when costs are low and value is high.

That’s one of the themes of last week’s JAMA Oncology piece on utilization management on oncology, which found absurd rates of prior auths for generic, first-line meds … drugs where treatment is a no-brainer, and access hurdles only hurt patients.

• It’s PBM Week! The Senate Finance Committee will mark up a bunch of bills tomorrow, and the main attraction -- the bipartisan bill being promoted by the committee’s leadership -- is now out. It calls for an elimination of payments based on list prices and does away with spread pricing in Medicaid.

• In the House, there is a new bill out that would ensure that patient cost-sharing in Medicare is based on net prices, not list prices.

• Slate does some fun math to determine that a Netflix-style subscription model for obesity meds could save big money and justify big outlays. I’m not 100% confident in the math here, but I love the concept.

• Cigna’s rejection-by-algorithm approach to claims has prompted a lawsuit.

• Novartis’ Vas Narasimham, in an FT interview, said that he’s operating under the assumption that price controls will be hugely punitive -- on the order of 95% -- and make the argument that the IRA will prompt companies to “ …  deprioriti[ze] pills for the elderly”