President Trump likes to boast that he mastered the “art of the deal.”

But one option his administration is considering to encourage lower drug prices, which surfaced in a recent draft executive order, may not be much of a deal for consumers.

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  • Ed, I am sorry to see you putting forth this perspective, which feels to me to be cynical to the point of being unconstructive. Why are you so instantly dismissive of one of the few reasonable paths forward, before it has barely had a trial? What is your goal in tearing down the efforts of others at the get go, without the benefit of even seeing how they turn out? Parallel declarations in history: “people will never fly,” “no one will ever run a mile in under 4 minutes,” “man will never reach the moon.” Your article also has the effect of being dismissive of the intelligence and competence of senior managed care executives, positing that their counterparts in Pharma “run circles around them.” Yet in reality, we are at last seeing collaborative work among highly intelligent, creative professionals across the pharma and insurance industries, which should be applauded rather than dismissed. Will all of these initial programs work as planned? Probably not. That’s true of virtually everything that’s new. But will they evolve into workable and effective processes over time? I would bet on it. And for our collective well being, so should we all.

    • Hi Ron,

      Thanks for your note, but apologies for the belated reply.

      I agree that value-based pricing can have merit, at least far as generating some basis for establishing cost effectiveness. I’m not as convinced about outcomes-based contracting. Certainly, it holds potential for drug makers, since they have an advantage in setting outcomes goals, which may vary from published data.

      As for beneficiaries, that would depend. Will premiums really be reduced in a way that beneficiaries feel they are experiencing lower costs?

      In any event, these contracts should not be confused with the idea that beneficiaries will encounter lower drug prices. Those are two different things and, unfortunately, are being conflated in discussing the executive order.

      And that is the issue that I was addressing – such deals may help better align value and costs, but that is not the same as telling beneficiaries prices will drop or even stabilize.

      Regards,
      ed at pharmalot

    • Thanks for the thoughtful reply, Ed. I agree that value-based payments are only part of the solution, albeit potentially an important part. The issue of patient access, via affordable co-pays and coinsurance is indeed paramount. Sadly, this is probably even more complicated to address, as it involves insurance design and overall health care costs, including not only drugs but hospitals, surgical procedures, office visits, diagnostics, etc. Somehow we need to get to a point where we look holistically at the care of patients and determine how to pay for overall health outcomes rather than piecemeal for each service or product.

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