Price and Costs

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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.

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 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,...

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 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 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 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 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...

December 27, 2022 Issues, Price and Costs

On Dec. 14, the Centers for Medicare and Medicaid Services (cms.gov) released their latest estimate of the country's annual healthcare tab. For the second straight year, U.S. healthcare spending topped $4 trillion. In 2021, health spending accounted for more than 18% of U.S. GDP. Progressives tend to cite numbers like these when making their case for greater government involvement in healthcare — or even a government takeover of the health insurance system, a la Medicare for All....

December 16, 2022 Issues, Price and Costs

Three days before Christmas, the Institute for Clinical & Economic Review (ICER) is scheduled to publish a draft assessment of two promising treatments for Alzheimer’s disease. Unfortunately for the millions of Americans living with this fatal illness, it is likely that ICER will be giving lumps of coal, not gifts, this holiday season. ICER performs studies that declare how much we as patients value medicines that treat devastating diseases like Alzheimer’s. And depending upon their proclamations, patients’ access to life-altering medicines...

November 16, 2022 Briefs, Price and Costs, Studies

SACRAMENTO – The broken 340B program, designed to provide affordable care for at-risk patients, creates massive profits for providers without necessarily improving patient health outcomes and should be reformed, finds a new issue brief released today by the Center for Medical Economics and Innovation at the nonpartisan Pacific Research Institute. Click here to download a copy of the brief “The 340B program is growing unsustainably and isn’t improving health outcomes for at-risk patients,” said Dr. Wayne Winegarden, the Center’s director and the...

October 16, 2022 Issues, Price and Costs

Hospitals aren't complying with a nearly 2-year-old federal rule requiring them to publish their prices, according to new research from PatientRightsAdvocate.org. Their willingness to flout the law is understandable. They make more money when people don't know how much the medical services they consume cost. But patients and payers shouldn't stand for this intransigence. It's depriving us of information we could use to foster competition among healthcare providers — and ultimately secure better care at a lower cost....

October 10, 2022 Briefs, Price and Costs, Studies

CLICK HERE TO READ THE BRIEF In addition to the reforms to the health insurance system, which will help address the problems of drug affordability, reforms tailored to the pharmaceutical sector are necessary. These reforms should eliminate drug supply chain inefficiencies and include: fostering a patient-controlled generics market, creating price transparency through reforms that ensure patients directly benefit from all discounts when purchasing their medicines,  fixing the drug formularies’ systemic biases against low-cost medicines, and encouraging contracting innovations that could create...

October 6, 2022 Issues, Price and Costs

Democrats are riding high on the public support they’ve garnered for passing legislation giving Medicare the power to negotiate for lower prices from drug makers. A Politico-Morning Consult Poll found that 76% of Americans support price caps on drugs, while only 13% do not.   In other words, Democrats have effectively convinced the public that government-controlled drug prices will deliver better, more affordable care.   But that’s incorrect. The drug-price provisions within the Inflation Reduction Act will reduce the number of new drugs that...

October 3, 2022 Issues, Price and Costs

The Centers for Medicare & Medicaid Services issued an update to the home health payment system on June 22nd. This proposed rule, rife with legalese and sheer complexity, should be held up as Exhibit A for why socialized healthcare schemes such as Medicare for All will never work. The proposal’s obsessions with “aggregate expenditures” and “overall utilization” reveal one of the fundamental flaws of government-run healthcare – the belief that bureaucrats can efficiently serve individual’s needs by imposing aggregate caps and regulations based on population...

August 29, 2022 Issues, Price and Costs

Democrats have nudged the U.S. healthcare system closer to Canadian-style socialism with their recently signed, and dubiously named, Inflation Reduction Act. The IRA will impose a collection of price caps on prescription drugs. Canada has long forcibly controlled drug prices—and thereby deprived patients of access to cutting-edge care. The story will be the same in the United States, unless a future Congress and president roll back the IRA's price controls before they take effect in 2026. Among the IRA's suite of price...

August 22, 2022 Briefs, Industry Trends, Price and Costs, Studies

SACRAMENTO – Biosimilars competition saves patients and the health care system over $11 billion annually and could generate even more savings if the broken drug pricing system were reformed, finds a new issue brief released today by the Center for Medical Economics and Innovation at the nonpartisan Pacific Research Institute. “Patients living with cancer, autoimmune diseases, osteoporosis, and other illnesses are receiving revolutionary treatment from biologics,” said Dr. Wayne Winegarden, the Center director and the study’s author. “As our research shows,...

July 29, 2022 Issues, Price and Costs

Progressives claim that medical debt leads to financial ruin for hundreds of thousands of Americans each year. Sen. Bernie Sanders, I-Vt., recently argued that the high cost of health care is pushing so many people into bankruptcy that the government must cancel medical debt. It's the precursor to his call for a federal takeover of the entire health insurance system so that no one has to pay for medical care directly again. Medical bills can be onerous. But they account for a...