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May 8, 2023 Issues, Price and Costs

The Biden administration is in the midst of setting the terms for its program of price controls on prescription drugs dispensed through Medicare. The first 10 medicines subject to the price caps will be selected by the end of this year. That prospect is already chilling investment in drug research, particularly in small-molecule drugs. This category of medicines, which are generally chemically synthesized, includes everything from aspirin to certain cancer drugs. The implications of this slowdown in research and development could be...

May 5, 2023 Issues, Price and Costs

The Biden administration is cracking down on hospitals that keep their prices secret. Under a policy announced last week, failing to abide by Trump-era hospital price transparency rules will no longer prompt a warning letter from the Centers for Medicare and Medicaid Services. Instead, hospitals will have 45 days to submit a Corrective Action Plan for meeting these requirements — or face a fine. It seems that not even Democrats can quarrel with former President Trump's price-transparency reforms — nor should they. For healthcare...

April 3, 2023 Issues, Price and Costs

Pharmacy benefit managers are in the congressional hot seat. Last Thursday, the Senate Finance Committee held a hearing examining the middlemen's impact on patients. Earlier in March, the House Committee on Oversight and Accountability launched an investigation into PBM tactics that are "harming patient care and increasing costs for consumers." The focus on pharmacy benefit managers is warranted. They game the healthcare system to line their own pockets at the expense of patients. PBMs manage prescription drug benefits on behalf of insurers....

March 23, 2023 Issues, Price and Costs

Despite the rancor, there are many bipartisan opportunities for the divided 118th Congress. Near the top of the to-do list should be reforming the well-intentioned, but poorly designed, 340B drug discount program. 340B enables qualifying institutions to purchase medicines from manufacturers at steep discounts, generally between 25% and 50% off list price, but sometimes even larger. These discounts are supposed to improve the capacity of the clinics and hospitals serving a disproportionate share of low-income and uninsured patients. More and more, this...

March 21, 2023 Innovation, Issues

Sen. Bernie Sanders, I-Vt., has summoned Moderna CEO Stéphane Bancel to Capitol Hill for a public chastising next week. The hearing will probe why the biotech firm would consider raising the price of its COVID-19 vaccine. Since the federal government played some role in the vaccine's development, Sen. Sanders argues, it shouldn't have the freedom to price its product at a price willing buyers will pay if that price strikes the Vermont senator as too high. We should expect nothing less from the...

March 19, 2023 Issues, Price and Costs

Imagine receiving a bill for $10,000. It’s from your local hospital, where you had a minor procedure. But you have no idea why it’s so high, or how you’re going to pay. If you’ve ever had an experience like this, you’re not alone. In 2020, a California couple was billed $80,000 for their twins’ stay in intensive care. In 2022, a South Carolina hospital charged a woman more than $5,000 for a breast biopsy, after refusing to give her a price...

March 15, 2023 Issues, Price and Costs

It's been more than two years since a rule promulgated during the Trump administration requiring hospitals to disclose their prices took effect. Yet according to a new study, most hospitals aren't complying. The analysis, published in January in the Journal of General Internal Medicine, found that just 19% of hospitals examined fully comply with the rule. Hospitals in Tennessee haven't performed any better. A month after the new rule took effect in January 2021, a Vanderbilt University review of the 88 short-term acute care...

March 14, 2023 Issues, Price and Costs

The Inflation Reduction Act’s (IRA) drug pricing provisions will severely curtail life-science research. The IRA vests the Centers for Medicare & Medicaid Services with the power to impose price controls on an ever-expanding list of drugs. The direct result will be that seniors today — as well as future generations of patients — will lose out on access to life-saving cures because those treatments will never be developed. Until the political balance in Washington changes and this deadly folly can be repealed,...

March 13, 2023 Issues, Policy Proposals

What's the difference between getting an x-ray at the hospital and getting one at the doctor's office? The former could cost a lot more than the latter. Medicare often reimburses hospitals more than it pays doctor's offices for the same procedure. Hospitals claim these payment differentials are necessary because they are subject to more extensive regulatory requirements and face other fees; higher payments offset those costs. In reality, these uneven payments simply incentivize the most wasteful and monopolistic tendencies in American health care. Click to read...

March 6, 2023 Innovation, Issues

Experts from the Department of Justice, the Federal Trade Commission , and the American Medical Association just released a paper urging Congress to peel back the Affordable Care Act's restrictions on creating and expanding physician-owned hospitals. Their analysis is correct. Such hospitals inject much-needed competition into the healthcare market. Consequently, repealing restrictions on them could help lower healthcare costs and expand access to healthcare. The 2010 Affordable Care Act bans physician-owned hospitals from expanding and prevents new ones from participating in Medicare or Medicaid. Proponents of this ban...

February 18, 2023 Issues, Price and Costs

President Biden hit the road last week to castigate Republicans for supposedly proposing to make healthcare more expensive. The president is upset that Republicans want to undo the innovation-destroying price controls on prescription drugs included in Democrats’ Inflation Reduction Act and rein in the billions of dollars in subsidies he’s handing out to prop up Obamacare’s exchanges. He’s conveniently ignoring some of Republicans’ own ideas for making health insurance more affordable. In a recent opinion piece, Rep. Michael Burgess, R-Texas — a member of the...

February 15, 2023 Issues, Policy Proposals

Should the government put a price on human life? The new head of the House Energy and Commerce Committee, Rep. Cathy McMorris Rodgers, R-Wash., doesn't think so. She recently introduced legislation alongside several of her colleagues to ban the use of "quality-adjusted life years," or QALYs, in federal healthcare programs. A QALY purports to measure the value of one additional year of life. A QALY of one is equivalent to one year of life in perfect health. A value of zero is death. Economists sometimes try to...

February 8, 2023 Issues, Price and Costs

Last night's State of the Union address was a festival of cognitive dissonance. President Biden proudly lauded the price controls that Democrats have begun implementing on prescription drugs as part of last August's Inflation Reduction Act. He also touted his administration's Cancer Moonshot, which aims to halve the cancer death rate over the next 25 years. These policies are in direct conflict with one another. Pharmaceutical companies are already responding to the IRA's looming price controls by scaling back their research and development efforts....

January 28, 2023 Issues, Policy Proposals

Americans are getting squeezed by rising health care costs. The latest numbers from the Centers for Medicare and Medicaid Services show that patient out-of-pocket spending increased by 10.4% in 2021, a rate not seen for more than three decades. The cost of monthly health insurance premiums also leapt, by 6.5%. And that was all before last year’s rapid inflation squeezed household budgets. One often overlooked cause of soaring health care costs is hospital consolidation. When a single health care system becomes...

January 26, 2023 Issues, Policy Proposals, Price and Costs

A group of 25 senators, led by Sen. Elizabeth Warren (D-MA), requested that HHS Sec. Xavier Becerra exercise march-in rights for Xtandi (enzalutamide), a prostate cancer therapeutic. March-in rights give the government the right to take a license for itself if it helped to fund the product owner's research . . . “Net prices, which take into account discounts and rebates, have been going down for several years,” Wayne Winegarden, Ph.D., senior fellow, business and economics, Pacific Research Institute, told BioSpace. “Gross...

January 18, 2023 Issues, Policy Proposals

The U.S. Departments of Labor and Health and Human Services has issued a new joint federal rule. Another federal mandate is hardly newsworthy, but one devised under the Trump Administration and eagerly implemented by the Biden Administration is certainly unique. Beyond the politics, the Transparency in Coverage rule, while not without its shortcomings, helps to address on one of the fundamental flaws worsening the effectiveness of the nation’s healthcare system – its opacity. The lack of transparency that pervades the healthcare system...

January 17, 2023 Issues, Price and Costs

Democrats remain fixated on prescription drug prices. Last August, they managed to include price controls on drugs dispensed through Medicare in the Inflation Reduction Act. And they're not done meddling. Earlier this month, Rep. Lloyd Doggett, D-Texas, called on President Biden to unilaterally suspend drug patents in order "to address the crisis of unaffordable medicines." Socialist Sen. Bernie Sanders, I-Vt., has named drug pricing as one of his top legislative priorities in his new role as chairman of the Senate Health, Education, Labor, and Pensions Committee....

January 7, 2023 Innovation, Issues

Roughly 100 million Americans live in areas without enough primary care doctors. Nationwide, we’re short about 17,000 of them right now. By 2034, that number could jump to 48,000, according to the Association of American Medical Colleges. To meet our country’s growing demand for care, we need to increase the supply of clinicians who can provide it. But that doesn’t mean just training more doctors. In fact, nurse practitioners and physician assistants could be delivering much more primary care but are...

January 7, 2023 Issues, Price and Costs

Shopping around has never been easier. With a few clicks, consumers can easily find deals on flights, get multiple quotes on car insurance or price-match items in their local shopping mall. Yet when it comes to spending money on something really important — their health — consumers are largely in the dark. Federal rules that took effect last year were supposed to address this problem by requiring hospitals to publish the prices of 300 common services. The goal was to make health...

January 6, 2023 Innovation, Issues

Government regulation is supposed to make products safer. But new research shows that, at least for medical devices, regulation can have the opposite effect. In a paper published this past November, UC San Diego economist Parker Rogers found that when the U.S. Food and Drug Administration reduces regulation on a category of products, innovation and competition in that category increase, prices decrease, and safety actually improves. How could this be? Rogers hypothesized that firms “increas[e] their emphasis on product safety as deregulation exposes them to more...