Martin Shkreli the "pharma bro" Raises price of drug 5000% Dareprin - not priced for value because it saved someone's life Doesn't matter how much it costs b/c a life is priceless A couple things to keep in mind... The us is only developed nation that allows drug companies to set their own prices Europe, canada, australia govt. view market for cures as uncompetitive and bureaucratic set price Drug companies look at what competitors charge and land price in range Doesn't matter how much it costs to produce NICE- national institute for clinical evaluation UK - drug bargaining Cost effective analysis In the US Medicare barred from negotiating bulk discounts Mediciad 23% discount on brand name drugs LA hep c subscription model Department of veteran affairs negotiates own prices Private negotiates own prices **each paying more because no collective bargaining power 2016 Trump says he wants to lower drug prices Trying to set the agenda 80% of americans say drug prices are unreasonable 90% view it as a important or top problem 3/10 have not taken a prescription as instructed because a cost Trump says will decrease prices by increasing competition Impossible!! Drug pricing govt. Hearing in senate House-passed bill ** know this Requires secretary to negotiate prices of drugs without any market competition Those with highest medicare spending and highest net commercial spending Maximum fair price not to exceed 120% of average price in up to 6 countries Max fair price applies to both medicare and private plans Negotiation is not just limited to medicare Extends to private payers Ideas: Price negotiation Strike current "noninterference" clause Actively require price negotiation Use "best available price" Either to other country, medicaid, or private plan
Use binding arbitration to set prices Rebates Benchmarks for price increase Inflation adjusted PhRma arguments Claim that do a lot of innovation and research Need to make a lot on some drugs to fund research on others Amazon spends most on R&D, but low profit company Trump proposals Medicare part b drugs with international price index Out of pocket limit for part D Modify part b