[Ip-health] Harvard's Oct. 23, 2015 forum on "Drug Pricing: Public Health Implications"

Zack Struver zack.struver at keionline.org
Fri Oct 23 12:21:38 PDT 2015


Harvard's Oct. 23, 2015 forum on "Drug Pricing: Public Health Implications"

Submitted by Zack Struver [1] on 23. October 2015 - 15:15

On October 23, 2015, the Harvard T.H. Chan School of Public Health hosted a
forum titled "Drug Pricing: Public Health Implications," hosted by Caroline
Humer, a Reuters healthcare correspondent. The forum featured a panel of
four individuals who work on drug pricing:

*Steven Pearson [2], President of the Institute for Clinical and Economic
Review and Lecturer at Harvard Medical School

*Aaron Kesselheim [3], Director of the Program on Regulation, Therapeutics,
and Law at Brigham and Women's Hospital

*Meredith Rosenthal [4], Professor of Health Economics and Policy at the
Harvard T.H. Chan School of Public Health

*Lowell Schnipper [5], Chair of the American Society of Clinical Oncology's
Value in Cancer Care Task Force

The discussion covered various issues related to drug pricing in the United
States, including the drug pricing practices of other countries compared to
the U.S., such as the ability of Medicare/Medicaid to negotiate; clinical
trial regulations; drug reimbursement policy and practices; and
transparency of R&D costs.

The initial framing of the discussion was valuable for people in the drug
pricing field:

*Aaron Kesselheim offered a concise and effective overview of drug pricing
problems in the United States that covered the regulatory landscape, the
lack of effective price competition in the market for branded drugs, the
inability for Medicare/Medicaid to negotiate prices, and waste and
inefficiencies in drug R&D.

*Steven Pearson showed helpful slides and provided a comparative analysis
of high drug prices in the United States and low drug prices elsewhere.

*Lowell Schnipper, an experienced practicing oncologist, suggested that
doctors should act as responsible stewards for their patients, and be more
willing to talk about high prices and work to explore alternative, less
expensive therapies with patients who cannot afford overpriced treatments.

*Meredith Rosenthal explained that although the drug market is highly
regulated in the United States, there have been numerous market failures in
drug pricing. She pointed out that it's difficult to use old economic
assumptions about how markets work to set prices because many patients and
physicians are insulated from drug costs through payers. Her suggestion was
that policymakers need to keep in mind the distinction between what
economists think of as static efficiency — do the right patients get the
right drugs — and dynamic efficiency — do we get the right kind of
pharmaceutical innovation at the right rate.

While this initial framing of the problem of drug pricing offered good
grounds for a critical inquiry into current drug pricing practices in the
United States, many of the proposed solutions offered during the course of
the discussion were relatively conservative, and often endorsed imposing
higher costs on patients or rationing of reimbursements. There was no
discussion of ending legal monopolies when prices were excessive, or
considering transformative reforms, like delinkage.

Even as he recognized that some pharmaceutical companies misuse their
monopolies to charge unreasonably high prices, Steven Pearson suggested
that those companies should be disciplined through fines paid to the NIH to
cover new medical R&D, rather than having their monopolies revoked.

Mr. Pearson argued that if prices do not align with the determined value of
a drug (who does the determining was left unclear), payers should ration
drugs through restricted access, for example by lowering the tiers for
overpriced drugs, or requiring complex prior authorization processes for
doctors who want to prescribe them. He also noted that if a drug aligns
with a value judgment on price, perhaps we should extend exclusivity and
exclude generic competition.

Although Dr. Schnipper did not defend drug rationing, instead of focusing
on solutions to lower the price of drugs, he suggested that doctors should
work with their patients to decide what alternative drugs might be
available at a less expensive cost. He did not consider what should be done
in cases where there's really only one option, such as for stage 4 HER2+
breast cancer patients that should be treated with T-DM1. He also noted
that if a drug may only have modest benefits for patients, they should
perhaps forgo those drugs if that money could, for example, be put towards
their children's college fund.

Instead of pushing for strong government intervention in what she herself
described as a market that had failed in many ways, Professor Rosenthal
seemed to be suggesting, towards the end of the forum, that the U.S.
government should merely encourage pharmaceutical companies to align their
drug prices with drug values.

Aaron Kesselheim suggested that there should be transparency of the costs
of pharmaceutical research and development, but did not explore in concrete
ways how to reform the incentive structures for research and development.

Overall, the panelists recognized that high drug prices are affecting
millions of Americans, that the United States government has the obligation
to act, and that something should be done to curb price increases, but the
remedies were few and far between, and in general did not match the
aggressiveness demonstrated by the executives running big drug companies.

It's frustrating that a high-level discussion on drug pricing, hosted at
Harvard University, did not feature any voices willing to defend
alternatives to the system of granting exclusive marketing rights through
patent monopolies.

A recording of the forum will be available shortly at the Harvard T.H. Chan
School of Public Health website:

[1] http://keionline.org/user/57726
[2] https://theforum.sph.harvard.edu/expert-participants/steven-pearson/
[3] https://theforum.sph.harvard.edu/expert-participants/aaron-kesselheim/
[4] https://theforum.sph.harvard.edu/expert-participants/meredith-rosenthal/
[5] https://theforum.sph.harvard.edu/expert-participants/lowell-schnipper/

Zack Struver, Communications and Research Associate
Knowledge Ecology International
zack.struver at keionline.org
Twitter: @zstruver <https://twitter.com/zstruver>
Office: +1 (202) 332-2670 Cell: +1 (914) 582-1428

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