Thursday, June 9, 2016

Clever Blog on PBMs: the Junction of Economics, Analytics, Health Outcomes, and Policy

There is a lot going on at the junction of pharmacoeconomics and health policy, as seen in the ever-present dialog over drug prices and health value.   A great case study for this intersection is a blog this week in Health Affairs by Chung, MacEwan, and Goldman on: "Does A One Size Fits All Formulary Policy Make Sense?" - here.   At first this sounds like something to do with precision medicine - moving past one size fits all.

But the article is actually a case study for bringing together pharmacoeconomics, business economics, human behavior, and health policy in a way that matters to consumers and physicians as well.

"Why this matters" after the break.

The article talks about "step therapy" - when you must fail on drug A (usually generic) before getting drug B.   (Many Medicare local policies are written this way for interventions - you must fail 8 weeks of physical therapy before getting surgery, etc).   Chung et al. marshall a broad series of reasons and factors, most of them data-based, why this can have unintended consequences.  For example, they cite data that 7-22% of patients may end up with no medication at all when confronted with a step therapy that requires a new trip and a new scrip for Drug A before filling their prescription in hand for Drug B.

The paper is written by a consultancy, Precision Health Economics,  which currently has an executive team of 8, 6 founding partners (mostly academics, such as Prof. Goldman), 16 "strategic consultants," and an additional 14 "academic advisors" in addition to full time staff (such as Chung) not listed on the website.  They list 33 publications for 2015.   So clearly, PHE this is a pretty large-scale effort.

This type of work is also philanthropically funded.  Investments in pharmacoeconomics include the $5M donation from the Arnold Foundation for a cancer drug value thinktank at Sloan-Kettering headed by Peter Bach; $16M for a Duke policy center headed by Mark McClellan; and $5M to the MGH-based ICER group headed by Steve Pearson.  In May 2016, the American Journal of Public Health devoted a special supplement (here) to bringing clear economic ideas into more hard-headed contact with public policy for better healthcare.

For another creative viewpoint on the strategic interactions between drugs and payers, see here.

For another well-done blog by Precision Health Economics, in November 2016, on value based purchasing for drugs and devices and surveying the barriers to at-risk manufacturer agreements, see here.