Price Indexes for Drugs (original) (raw)

Recent Research on Disease-Based Price Indexes: Where Do We Stand?

2013

AS HEALTH CARE continues to account for a larger share of the gross domestic product (GDP)—17.9 percent in 2011, compared with 5.1 percent in 1960— economists agree that improved statistics are sorely needed. Toward that goal, several avenues of new re­ search have emerged recently, aiming to develop statis­ tics that can shed more light on the sources of medical spending growth and whether such spending leads to better health outcomes. Ultimately, economists, poli­ cymakers, and the public would like a deeper under­ standing of whether society is better off—and by how much—given the fast growth in costs. For the Bureau of Economic Analysis (BEA), the challenge is to develop better measures of medical care prices in order to decompose how much of the growth in medical care costs is inflation and how much is growth in real, or inflation-adjusted medical output. To produce more meaningful health care statistics, academics and policymakers have advocated a new ap­ proach based on disea...

Grounding Value‐Based Drug Pricing in Population Health

Clinical Pharmacology & Therapeutics, 2020

on behalf of the Consortium for Value-Based Drug Access Access to innovative therapies is a critical component of health care but is increasingly threatened by rising prices, utilization restrictions, and investment in pipelines promising high returns regardless of clinical benefits. Several proposed solutions have been labeled "value-based pricing," but their effects on price, access, and innovation differ. We argue that the term should be restricted to arrangements that facilitate access to drugs priced according to their population-level impact, which would best promote Americans' health.

Pricing health services for purchasers—a review of methods and experiences

Health Policy, 2004

This paper reviews methodologies and international experience related to costing and pricing health services. Several factors affect the determination of the prices purchasers pay for health services. These include: the method of provider payment; the availability of information on costs, volumes, outcomes, and patient and provider characteristics; methods used to calculate providers' costs; and characteristics of purchasers and providers-including the regulatory environment, provider autonomy, negotiating power, and the degree of competition. The paper focuses on methods for setting levels of payment under different provider payment mechanisms. Line item and global budgets remain the most common reimbursement methods in developing countries. However, many of these countries are implementing mixed payment systems that have greater information demands. The principal payment types used in high-income countries-capitation, payments per case or diagnosis, and fee-for-serviceare reviewed here, and implications for low-and middle-income countries discussed. To minimize incentives for under-or overutilization, prices that purchasers pay for health care services should be related to the unit costs of services. However, establishing the true unit cost of health services is complicated, and detailed data needed to correctly allocate indirect costs to the units of services are not generally available in developing countries. The organizational characteristics of health care providers and their relationships with purchasers strongly influence the way prices for health services are determined. Pertinent characteristics include provider autonomy, provider negotiating power, and the degree of competition. The principal constraint on the development of provider payments systems in developing countries is the limited availability of information on costs, volumes, and patient characteristics. However, international experiences reveal a variety of options for setting prices for health care purchasers in developing countries that are reforming their payment systems.

Pricing, profits and pharmacoeconomics - for whose benefit?

Expert Opinion on Pharmacotherapy, 2001

In today's troubled healthcare climate, it is not uncommon to run across headlines like: 'Health insurance premiums increasing by 10 percent to 30 percent across the country.' This particular New York Times article went on to explain that this premium price hike, the third consecutive double digit increase in 3 years, is driven largely by escalating pharmaceutical costs [1]. The pharmaceutical industry has largely been vilified in the media and in the recent presidential debates, for fueling healthcare inflation and setting what many perceive to be 'unfair' prices in light of the profit margins on their life-saving products. A report released by the Congressional Research Service found that after tax, profits for the pharmaceutical industry averaged 17% of sales, compared with 5% for all other industries [2]. The White House has added its voice to the popular discontent with notices such as this one reported in the New York Times: 'There is a rising tide politically in this country of strong antagonism against the pharmaceutical industry on the dimension of prices. (Without expanded access to insurance) price controls are an inevitable outcome.' Although the prospect of price control remains dubious in America's entrenched laissez-faire economy, David Kessler, former head of the FDA and the Dean of the Yale School of Medicine, described the situation as a 'powder keg,' stating 'the current system is simply not sustainable' [2]. Although there does not appear to be an immediate solution to this escalating crisis, this editorial will examine pharmaceutical pricing, industry profits and the role of pharmacoeconomic analyses amidst the chaos.