Price and Costs

On this page, you’ll find the Center’s research on the complex world of pharmaceutical pricing. Our focus will be breaking down current pharmaceutical pricing structures and processes and potential reforms to improve efficiency and innovation; evaluating the impact of regulatory-created inefficiencies such as Pharmacy Benefit Managers (PBMs) and the 340B program; and analyzing how policy proposals such as price controls and drug importation would undermine competition.

Establishing a two-part drug pricing system quantifying separate values for a drug’s innovation and production would create an efficient market and a more accurate reflection of how patients value a drug compared to those produced by centralized organizations, argues a new report released today by the Center for Medical Economics and Innovation at the Pacific Research Institute. Click to download “Establishing a Two-Part Drug Pricing System to Promote Value-Based Pricing and Innovation” “Some policymakers assume that only a centralized agency can determine...

Proponents from states such as California, Oregon, and Connecticut all claim that “pay for delay” legislation is necessary to rein in the pharmaceutical industry’s anti-competitive practices. If implemented, the bills will impose a high cost on patients by raising the costs of medicines and delaying generic entry into the market. Pay for delay tactics refers to the practice of patented drug manufacturers paying off generic manufacturers for the sole purpose of delaying the launch of competitive products. When successful, such tactics...

[vc_row css_animation="" row_type="row" use_row_as_full_screen_section="no" type="full_width" angled_section="no" text_align="left" background_image_as_pattern="without_pattern"][vc_column width="2/3"][vc_column_text css=".vc_custom_1621192674245{padding-right: 40px !important;}"]DOWNLOAD THE PDF In October 2019, the Center for Medical Economics and Innovation at the Pacific Research Institute released its second study documenting the savings potential enabled by biosimilars. Biosimilars are medicines manufactured in, or derived from, biological sources that are developed to be similar to FDA-approved reference products. Biosimilars are approved to compete in nine biologic drug classes in the U.S., and are available in seven of these drug...

A commonly-used analysis to determine a medicine’s value is based on flawed methodologies that would diminish innovation and access, finds a new report released today by the nonpartisan Center for Medical Economics and Innovation at the Pacific Research Institute. “Cost effectiveness reports may provide precise estimates, but there is no reason to believe that these estimates accurately reflect the value of medicines,” said Dr. Wayne Winegarden, the brief’s author.  “The documented biases in their value assessments should raise serious concerns that...

Tearing down drug “rebate walls” that increase patient costs and block access to cheaper and often more effective medications would increase competition, lower out-of-pocket costs, and improve health outcomes, finds a new brief released today by the Center for Medical Economics and Innovation at the nonpartisan Pacific Research Institute. Click to download the brief “America’s patients are harmed because they do not benefit from large, fast-growing rebates when purchasing their medicines,” writes the brief’s author, Dr. Wayne Winegarden, director of PRI’s Center...

A new brief released today by the Center for Medical Economics and Innovation at the nonpartisan Pacific Research Institute shows that counterfeit drugs put patients in harm’s way, hinder drug innovation, and lead to job losses. Proposals like drug importation or price controls, if implemented, would exacerbate the problem and result in more health and economic consequences. Click here to download the brief “Counterfeit drugs expose patients to potentially lethal contaminants, and may also increase public health risks by failing to effectively...

A new brief released today by the Center for Medical Economics and Innovation at the Pacific Research Institute found that reforms mandating drug rebates benefit patients rather than payers would lower overall health care costs and help patients with expensive out-of-pocket drug costs. Click here to download the brief “Ironically, the current drug concession system is raising patient costs,” write the briefs authors, Wayne Winegarden and Robert Popovian. “Mandating that all drug concessions must benefit the patients purchasing the medicines is a...

Title: AB 72 brief analyzes impact of medical billing reform law that's had bad consequences for patients and practitioners By Sarah Downey, Northern California Record A new policy brief about the impact of California AB 72 finds that the law – designed to alleviate surprise medical billing – while well-intentioned also has unintended consequences that have increased medical costs and affected quality of care. The Pacific Research Institute (PRI) brief, “The Menace of Medical Rate Setting: The Case of California’s AB 72,” is...

As they approach the end of the Drug Pricing Maze, the Professor and Pete explore reforms to fix a broken system and encourage the use of cheaper biosimilars that can help patients and the health care system save big. They also learn what can be done to make very expensive gene therapies that provide a lot of value for patients more affordable and accessible....

SAN FRANCISCO – California’s surprise medical billing law (Assembly Bill 72) – which imposes price controls on the rates out-of-network physicians can charge at in-network facilities – is hurting patients with lower quality care, reduced access, and higher health care system costs, finds a new brief released today by the Center for Medical Economics and Innovation at the Pacific Research Institute. Click here to download the brief “California’s surprise medical billing law has created unintended consequences that are increasing healthcare costs and...

The Professor and Pete must collect 3 keys to finally escape the drug pricing maze.  The first key involves reforms to increase drug affordability for patients who buy their drugs at a pharmacy.  The Professor shows Pete that these reforms should ensure that prices are transparent, easy to understand, and help patients benefit from the large discounts that are being paid....

[vc_row css_animation="" row_type="row" use_row_as_full_screen_section="no" type="full_width" angled_section="no" text_align="left" background_image_as_pattern="without_pattern"][vc_column width="2/3"][vc_column_text css=".vc_custom_1596236774320{padding-right: 40px !important;}"]DOWNLOAD THE PDF In October 2019, the Center for Medical Economics and Innovation at the Pacific Research Institute, under the direction of Dr. Wayne Winegarden, released its second study documenting the savings potential enabled by biosimilars. Biosimilars are medicines manufactured in, or derived from, biological sources that are developed to be similar to FDA-approved reference products. Biosimilars are only approved to compete in nine biologic drug classes in the U.S.,...

President Reagan famously said, “the nine most terrifying words in the English language are: I’m from the Government and I’m here to help”. It is time for President Trump to learn this wisdom. Along with Speaker Pelosi, Senator Sanders, and Representative Ocasio-Cortez, President Trump seems to believe that giving the government the authority to impose price controls on medicines will help patients. And, following the signing ceremony on Friday, he is now officially trying to make government price controls a reality. Of...

The Professor and Pete go to the movies to learn why there is a drug affordability problem. After watching a scary thriller about list prices and net prices, an adventure on the prescription escalator, and a movie on biosimilars, they learn that a) specific patient populations are impacted by the drug affordability problem; and b) these issues can be fixed with targeted reforms to achieve innovation and affordability....

 The Professor and Pete reach the most difficult part of their journey: understanding how medicines are sold. It’s a complex system that hurts patients and at times exposes them to paying excessive costs. They also learn that patients who get their prescriptions from a pharmacy don’t really benefit from drug discounts negotiated by pharmacy benefit managers (PBMs) – only PBMs and insurers do....

[vc_row css_animation="" row_type="row" use_row_as_full_screen_section="no" type="full_width" angled_section="no" text_align="left" background_image_as_pattern="without_pattern"][vc_column width="2/3"][vc_column_text css=".vc_custom_1590107672986{padding-right: 40px !important;}"]DOWNLOAD THE PDF In October 2019, the Center for Medical Economics and Innovation at the Pacific Research Institute, under the direction of Dr. Wayne Winegarden, released its second study documenting the savings potential enabled by biosimilars. Biosimilars are medicines manufactured in, or derived from, biological sources that are developed to be similar to FDA-approved reference products. Biosimilars are only approved to compete in nine biologic drug classes in the U.S....