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January 17, 2025 Blog, Briefs, Issues, Price and Costs

PRI’s scholars responded to today’s action by the Centers for Medicare & Medicaid (CMS) announcing 15 additional drugs under Medicare Part D that will be subject to government price setting effective January 1, 2027.  The action was authorized by the Inflation Reduction Act signed by President Biden in August 2022. According to Sally C. Pipes, PRI President, CEO, and Thomas W. Smith Fellow in Health Care Policy and author of the soon-to-be published book The World’s Medicine Chest: How America Achieved...

January 7, 2025 Briefs, Innovation, Price and Costs, Studies

READ THE PDF Executive Summary Reforms that will strengthen the biosimilar market and expand savings opportunities include: Reforming (ideally repealing) the Inflation Reduction Act’s price control measures. Improving the incentives underlying the current buy-and-bill system to better align the financial incentives of providers, payers, and patients. Promoting greater transparency to the opaque drug rebating system including addressing the rebate wall problem through comprehensive reform or prohibiting the anti-competitive rebating practices that are generally outlawed in other markets. Given biosimilars’ demonstrated ability to...

January 6, 2025 Price and Costs

The Centers for Medicare & Medicaid Services has proposed a rule expanding Medicare and Medicaid patients’ access to anti-obesity drugs such as GLP-1s. Congress is also considering such a move. Expanding coverage to these patient groups makes sense. Read the op-ed here....

December 2, 2024 Briefs, Innovation, Price and Costs, Studies

READ THE PDF Executive Summary The Inflation Reduction Act’s price controls discourage biosimilar development. Payment system inefficiencies, such as the buy-and-bill payment system and rebate walls, disincentivize the use of lower cost biosimilars. Despite the savings biosimilars have already enabled, there are barriers to further progress. First, the price controls from the Inflation Reduction Act (IRA) disincentivize biosimilar development. Second, the convoluted pricing system discourages greater use of lower cost alternatives. How the payment system disincentivizes their use varies depending on whether...

November 7, 2024 Innovation

The Pacific Research Institutehas filed an amicus curiae brief in a case before the California Supreme Court that has the potential to devastate innovation in future life-saving medications. The Gilead Tenofovir Cases surround questions of the liability of pharmaceutical companies over their decisions on drug development timelines. In the case, the plaintiffs filed cases against the Gilead pharmaceutical company over the company’s failure to bring an alternative medication used to treat AIDS, hepatitis, and other diseases to the marketplace called TAF under...

October 28, 2024 Briefs, Innovation, Price and Costs, Studies

READ THE PDF Executive Summary Since 2019, biosimilars have obtained a majority share of most markets where they compete. The combination of lower prices (both biosimilar and originator) and rising market share could have generated up to $35 billion in savings in 2024 dollars compared to an all-originator baseline based on PRI’s latest analysis. These savings demonstrate that, just like with small molecule medicines, biosimilars strike a beneficial balance between incentivizing innovation and promoting affordability. Lower-cost Biosimilars Are Gaining Market Share The share...

October 23, 2024 Issues, Multimedia, Policy Proposals, Radio

“On the other side of the political spectrum is Wayne Winegarden, Ph.D., the Senior Fellow in Business and Economics at Pacific Research Institute, and Director of PRI’s Center for Medical Economics and Innovation. “He and his colleagues believe that patients are not in control of the health care system and that we suffer from an opaque and complex pricing structure that harms patients. “Winegarden’s free market approach means he advocates for doing away with the Obamacare subsidies that Congress must consider, as...

October 9, 2024 Innovation, Multimedia, Policy Proposals, Price and Costs

Low-cost biosimilars generated $19 billion in savings value in today’s dollars in 2023. But obstacles in the current drug pricing system meant that billions of dollars in potential savings were left unrealized. Join the Pacific Research Institute’s Center for Medical Economics and Innovation and panel of experts for a brief, informative webinar discussing how potential reforms can improve competition, generate more savings, and better serve patients and taxpayers. https://www.youtube.com/watch?v=-m7lNXr_dAw...

October 1, 2024 Briefs, Innovation, Studies

READ THE PDF Executive Summary In the competitive biologic markets, biosimilars have reduced average prices by 56 percent. The lower prices have reduced total expenditures by 51 percent in the competitive biologic markets even though total use is higher. Developing biosimilars is a long and costly endeavor that can take up to 9 years and $300 million. Market conditions should encourage uptake and appropriate reimbursement for physicians and manufacturers. Biologics – innovative medicines made, or derived, from biological processes – treat devastating...

September 24, 2024 Price and Costs

Last week, a House subcommittee held a hearing on pharmacy benefit managers and their impact on the prices patients pay for prescription drugs.The hearing speaks to voters' concerns. Republicans and Democrats alike have identified the cost of prescription drugs as their No. 2 health care concern, according to polling this month from KFF.And PBMs deserve congressional scrutiny. These middlemen have used their enormous influence in the drug market to make prescription medications unaffordable for a sizable share of patients. Read the...

September 18, 2024 Innovation, Price and Costs

In a patently politicized press release, Senator Bernie Sanders (I-VT) who is  Chairman of the Senate Health, Education, Labor, and Pensions (HELP) Committee, claims that the U.S. price of Ozempic is too high. As evidence, he cites generic companies that claim they can sell Ozempic for less than $100 a month, an inherently flawed JAMA study that claims that these same diabetes drugs can be profitably produced for less than $5 a month, and inaccurate price comparisons with other countries. Debunking...

September 16, 2024 Price and Costs

It's easier to have a car or refrigerator shipped to your home these days than a prescription. To get even the most common prescription drug still requires a visit to the doctor, a trip to the pharmacy, and a convoluted series of negotiations between insurers, middlemen, and pharmaceutical companies. Fortunately, that's starting to change. In recent months, drug companies Pfizer and Eli Lilly have begun rolling out direct-to-consumer programs that let patients purchase basic prescriptions remotely. Read the full article at Forbes...

September 9, 2024 Policy Proposals, Price and Costs

The Inflation Reduction Act (IRA) effectively imposed price controls on a portion of the pharmaceutical market. Worse, by design, the reach of these price controls will expand every year. The intended consequence of the policy is to reduce overall spending on drugs, but all regulations have unintended consequences, too. While these consequences may be unintended, they need not be unexpected. In the case of the IRA, these unintended impacts now threaten to undermine the entire purpose of the policy. Read the full...

August 27, 2024 Price and Costs

Medicare this month announced the end of its first round of "negotiations" over the prices of 10 prescription drugs covered under the Part D benefit as authorized by the Inflation Reduction Act. The results the Biden administration has delivered are a lot less dramatic than they're letting on. According to the White House, the program will save the federal government an estimated $6 billion in 2026, the first year the new prices will be in effect, while reducing costs for seniors...

August 26, 2024 Innovation

The ill effects from abusive lawsuits are well documented and include higher costs for consumers, reduced economic output, and diminished innovation. The adverse impacts on innovation are particularly troubling. Not only is continued invention necessary for expanding our prosperity, but it is also key for mitigating problems such as global climate change or finding new technologies and treatments for troubling health conditions....

August 26, 2024 Price and Costs

Dozens of state and local governments are suing drug companies and pharmacy benefit managers, alleging that they're unfairly hiking the price of insulin. The plaintiffs say they're fighting for patients. They're less forthcoming about the fact that they've profited handsomely from the system they're now decrying. For years, these cities and states have insisted on a cut—if not all—of the rebates that these pharmacy benefit managers extract from drug makers when negotiating over whether and how to cover specific drugs.  ...

August 15, 2024 Blog, Innovation, Policy Proposals, Price and Costs

The federal government has announced the long-awaited results from the 2022 Inflation Reduction Act’s (IRA) drug price negotiations.[1] The Biden Administration has been crowing that they have achieved “a historic moment that will help lower prescription drug prices for millions of people across America.” Nothing could be further from the truth. The Biden Administration has sold out patients and the hope for future cures to achieve results that pale in comparison to the benefits enabled by efficient market competition. According to...

August 12, 2024 Issues, Price and Costs

Any day now, the Biden administration will publish the prices it has set for ten drugs covered by Medicare's Part D prescription drug benefit. These price controls will provide "meaningful financial relief for millions of people with Medicare," administration officials say. Many seniors are about to see just how false that promise is. Millions of beneficiaries won't see a nickel in relief at the pharmacy counter. In fact, their costs will go up. Click to read the full article in Forbes. ...