Entries by William Smith

What To Do About 340B

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In 1992, Congress thought it had a brilliant idea to help hospitals that served low-income and uninsured patients. Under the 340B Drug Pricing Program, Congress simply required pharmaceutical companies to sell their drugs to certain non-profit hospitals at steep discounts. Congress felt – presto – this would shore up the finances of safety net hospitals without costing the federal government a penny.   Well, it did not work out as Congress had planned. Hospitals quickly discovered that they could “arbitrage” the discounts – that is, they could buy the drugs cheaply and be reimbursed at a much higher rate from patients who had a commercial insurance plan or were on Medicare – and pocket the generous spread between the discounted price […]

‘High’ U.S. Drug Prices Mask Freeloading by Other Nations

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The drug company’s choice is to walk away from millions in revenue from a given country and deny their people a lifesaving drug, or swallow hard and accept an unfair price that is nowhere near the drug’s value. For the sake of shareholders and patients, drug companies typically accept the unfair price and devote the revenue to offsetting their previous investments. In short, other nations are freeloading off of American R&D.

A nuclear winter is coming for biopharma

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The life sciences sector in Massachusetts — which has been flying so high for so long — is about to experience a very hard landing. With the adoption of prescription drug price controls in the Inflation Reduction Act (IRA), drug research and development — the heart of the life sciences sector in Massachusetts — is about to experience a nuclear winter.

Ron DeSantis’ Silly Drug Importation Idea

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Ron DeSantis proposed in November 2020 to import drugs from Canada for state agencies such as Medicaid, prisons and other public healthcare programs. The goal is to save $150 million in state taxpayer funds. But the Biden administration seems unlikely to approve the plan, and the FDA has raised objections. Here’s why the DeSantis plan will not — and cannot — save even a dollar.

University Science Research Is Under Threat

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The Biden administration’s formation of a working group to “develop a framework for the implementation of the march-in provision of the Bayh-Dole Act” could have serious adverse consequences for university research and biopharmaceutical innovation. It represents a particularly dangerous threat to the thriving life sciences cluster in Greater Boston.

Lousy Healthcare for Thee but Not for Me

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In recent years, pharmacy benefit managers (PBMs) have instituted programs to keep out-of-pocket drug costs high for patients. Why is the administration so eager to protect federal employees from high out-of-pocket costs but is perfectly happy for PBMs to enroll millions of other patients in these programs?

A Federal Drug Discount Program for the Wealthy

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The combination of legal disputes, a growing data repository and investigative reports have necessarily put the 340B Drug Pricing Program under the microscope. Combined with the fact that the policy lacks transparency, 340B has spiraled out of control to the point that no policymaker can ignore the need to look closer.

Harvard research points to ending drug cost help

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A common grievance about Harvard is that the university is out of touch with the concerns of everyday Americans. This perception is confirmed by recent research from Harvard Business School that contends patients should be denied assistance that helps them afford their prescription drugs. The Harvard study argues that in order to control drug prices, the government should deny patients’ access to copay assistance programs offered by drug manufacturers. It flies in the face of federal and state efforts to protect the value of such assistance programs for patients and ignores basic facts about how and when patients use copay assistance to access their medications.

Is CHIA’s Drug Cost Data Reliable?

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Earlier this year, the Center for Health Information and Analysis (CHIA) released its Annual Report on the Performance of the Massachusetts Health Care System for 2020.  The Massachusetts Legislature relies on CHIA data when considering bills to regulate drug costs and prices. The advocacy group Health Care for All reported that CHIA data showed prescription drug spending grew by 7.7 percent in 2020, more than twice the benchmark – but the most reliable data on prescription drugs indicates that spending in 2020 was essentially flat. 

Cures for Patients, Not Health Plan Profits, Make Drugs Valuable

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To the astonishment of many observers, the Institute for Clinical and Economic Review (ICER) recently concluded that a $2.1 million gene therapy for a life-threatening blood disorder called beta thalassemia, is priced cost-effectively. The surprise was especially pleasant, given that ICER’s methodology had, in the past, displayed bias against rare disease treatments and undervalued the lives of people living with disabilities.

340B Drug Discounts: An Increasingly Dysfunctional Program

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This report reviews the federal 340B drug discount program, showing that, over the past decade, the revenue for hospitals generated by the program, initially intended to serve low-income, uninsured populations, has exploded even while a number of important Massachusetts hospitals have reduced the level of charity care they provide. The study notes that nationwide, 340B drug sales rose from $9 billion in 2014 to $38 billion in 2020.

An Act advancing health care research and decision-making centered on patients and people with disabilities

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On November 9th, 2021, William Smith, Pioneer Institute Visiting Fellow in Life Sciences, submitted the following testimony to the Massachusetts Legislature in support of House Bill 201, which addresses a number of flaws and infirmities in the Quality Adjusted Life Years (QALYs) methodology that is utilized by a number of foreign nations in evaluating the value of medicines.

An “Impending Tsunami” in Mortality from Traditional Diseases?

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This report examines whether, after the COVID-19 pandemic subsides, the U.S. will have another looming public health crisis emerging from patients failing to have had their cardiology needs addressed properly during the lockdowns. Moreover, if we surmise that a follow-on public health crisis will emerge, we can also conclude that certain population segments are going to be more impacted by CVD, as there are documented health disparities in this therapeutic area. Finally, there are policy changes that could be taken to mitigate a possible spike in CVD adverse events; the paper will close by recommending certain policy changes.

A Modest Proposal to Raise Federal Revenue

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As a way to tackle drug prices, President Joe Biden recently announced that he supports the so-called “inflation rebate,” which would require drug companies to give the federal government any revenue from Medicare drug prices above the general rate of inflation. Senate Finance Committee Chairman Ron Wyden and House Speaker Nancy Pelosi have also publicly endorsed the inflation rebate.

A Rush to Judgment on Alzheimer’s Drug

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The Boston-based Institute for Clinical and Economic Review (ICER) sells itself as an independent source of information on the value of pharmaceuticals. But earlier this month, their bias was again evident when they tried to kneecap a drug for a dreaded disease before there’s even enough data to determine how valuable the drug really is. ICER has adopted this same strategy in the past on innovative drugs for cancer, cystic fibrosis, and other devastating diseases. This time ICER’s target is aducanumab, Biogen’s drug for Alzheimer’s disease.

The QALY and Cancer Treatments: An Ill-Advised Match

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This report examines the alarming methodological and contextual shortcomings of the Quality Adjusted Life Years (QALY)-based methodology in evaluating new cancer therapies. It reveals five specific problems with ICER’s evaluation of cancer treatments and demonstrates the urgent need to prohibit the use of the QALY amid trends in rapid cancer innovations and personalized medicine.

ICER Proves Its Lack of Business Acumen, Again

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A recent Institute for Clinical and Economic Review (ICER) “Report on Unsupported Price Increases,” concluded that: “Among the top drugs with price increases in 2019…ICER determined that seven of 10 lacked adequate new evidence to demonstrate a substantial clinical benefit that was not yet previously known.”  The impression left by the report is that drug companies arbitrarily raise prices without good reason.  As with so many ICER products, the study is misleading and demonstrates a profound lack of business acumen.

The Negative Impact of COVID-19 Upon the Biopharmaceutical Sector

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Contrary to conventional wisdom that says the coronavirus pandemic will generally benefit biopharmaceutical companies, a new Pioneer Institute study finds many companies will emerge from the pandemic commercially weaker, dealing with delays in new product launches and with fewer resources to invest in research and development.

Quality Adjusted Life Years (QALY): The Threat to Older Americans

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This report examines how the QALY methodology to determine drug treatment value threatens to discriminate against older adults by placing a lower value on treatments that would extend the life of or improve quality of life for older patients.  This clear bias against providing access to therapies to seniors comes at a critical and especially vulnerable time for older Americans given the coronavirus disease (COVID-19). 

The Legality of QALY under the ADA

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This new report outlines several potential legal violations and negative implications for disabled individuals related to the adoption of the quality adjusted life years (QALY) approach to drug value assessment, used most prominently by the Institute for Clinical and Economic Review (ICER).

Key Questions for Legislators on the Institute for Clinical and Economic Review (ICER)

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As states continue to grapple with prescription drug costs, a new Pioneer Institute study lays out the key ethical, methodological and disease-specific questions policy makers should address before deciding whether to contract with the Institute for Clinical and Economic Review (ICER) to conduct cost effectiveness reviews used to make decisions about the purchase of medicines and other medical innovations.

Will New England See Lower Prices from Drug Pricing Transparency Legislation?

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This report finds that most new drug pricing transparency laws do not lower consumer out-of-pocket costs, and that expensive and onerous compliance rules would likely put upward pressure on prices. The report reviews recent New England legislative attempts to reduce costs by requiring the disclosure of wholesale drug prices and other information about industry pricing practices.