Don't know what to feel as I see the first headlines of the new year. I careen between frustration and hope about breaking through...not in terms of getting people to agree with what we write here but at least to be more well-rounded and less beholden to the MSM echo chamber.
So here's my opening take on 2007, borne both of hope and frustration. From the Pink Sheet:
Medicaid AMPs May Include More PBM Discounts, If CMS Can Figure Out How
CMS wants to include a broader array of pharmacy benefit manager price concessions in calculating Medicaid average manufacturer prices for reimbursing outpatient prescription drugs.
Compare this lead to the Page One story in the WSJ on the health "middlemen", the final (thankfully) installment of this seris on "Health Care Gold Mines":
"Chicken producer Perdue Farms Inc. used to hire a big health insurer to bargain with doctors. Gradually, over a decade it cut out the middleman, dealing directly with doctors and hospitals just as Wal-Mart Stores Inc. often buys directly from manufacturers instead of using wholesalers. That has helped Perdue keep its health costs below the national average."
Really? How much? Does Perdue have an open or closed formulary. What else is Perdue doing? It just received an award for innovation in health care promotion and prevention. That might have something to with it to especially since drugs are only a small percentage of a health plans cost......
I am waiting for the first Democrat to use Perdue as the example for why Medicare should "negotiate" directly with drug companies. But in fact, government already does negotiate directly with drug companies through Medicaid. It just happens to do than PBMs on most drugs (atypicals seem to be the exception) but CMS can't figure out how to shift Medicaid into the marketplace. And of course no one ever counts the cost of restrictive formularies and prescription limits on Medicaid patients.
So are PBM's saving money or not? Compared to government price controls, the answer is markets move faster and generate discounts more effectively without restricting choice. There's a value to that. The WSJ articles on PBMs glance over the most important point: PBMs are simply paid to save money on drugs, not on health care costs. They are not disease managers and have no stake or ability to prevent or predict disease at an individual level. What's more important: price or value? Do we want to "squeeze" or "eliminate" firms or individuals that can provide such insight? Do we want to replace PBMs with one big government PBM that is just obsessed with drug costs? Then we are back to the Medicaid model and one size fits all drug dispensing and we move away from patient-centric medicine.
Here's another one from the Pink Sheet:
Increasing Clinical Trial Failures Highlighted In GAO Report On Drug R&D
A â€œsystematic analysisâ€ of why drugs fail during clinical testing could help curb the rising number of trial failures and prevent companies from repeating othersâ€™ trial mistakes, the Government Accountability Office suggests in a recent report..
Peter and I along with a great group of people that formed our 21st Century FDA Task Force (none of whom would have been allowed on the IOM Drug Safety Task Force, include Nobel Prize Winner Josh Lederberg because of conflicts alleged by IOMatrix Sheila Burke) came to that conclusion a year ago as did the FDA with its Critical Path report. And of course a systematic analysis could help reduce the number of rare adverse events in the post market but instead we are going to drink the IOM's kool-aid and spend millions on genomically and phenotypically insensitive claims data that might spot a safety signal years later.
Your PDUFA and tax dollars at work.