Putting Patients First in Drug-Pricing Decisions

President Donald Trump recently rolled out the administration’s plan to address high drug prices. As the administration and Congress sift through their policy options, we need to remember what patients and their families want: more, better, faster and cheaper drugs.

The administration’s proposals on speeding generic and biosimilar entrants focus on the tail end of the innovation spectrum. This is important, but only part of the story.

More, better products start with scientists and companies partnering with patients all along the research and development continuum. The U.S. Food and Drug Administration has emphasized to its review teams the importance of understanding patients’ unmet needs and preferences and the outcomes most important to them. This approach to reviewing new products sends a clear signal to the device and drug industries: Products coming to market should reflect the needs of patients.

We also need the right capital in the right place at the right time to turn promising science into a robust pipeline of potential treatments. R&D is a high-risk business fraught with failures.

Already, we know that well-organized and well-resourced disease-specific groups have attracted private investment in developing treatments by funding basic research, creating clinical trial networks, becoming the source of natural history data, and running patient registries to better understand patients’ experiences and responses to treatments. The Cystic Fibrosis Foundation was an early pioneer of this model. But, there remain few organizations with deep resources for these investments, and not every disease or condition has an organized constituency.

The capacity gap across disease-specific organizations could be solved by creating pooled resources that organizations could tap into until they are in a position to attract additional investments. Disease-specific organizations are a critical part of the system, and in many cases, their inability to participate in effect removes patients from participation, as well.

Faster product development requires all stakeholders in the biomedical ecosystem to shake up the way that they’ve always done things. Clinical trials are the longest and most expensive part of developing new treatments. Innovative approaches such as platform trials, adaptive designs, computer modeling, the use of real-world data and telemedicine have proven to reduce study time, which saves money. The groundbreaking I-SPY 2 breast cancer trial reduced study start-up time from 10-13 months to 45-60 days.

Faster innovation also requires researchers to adopt and apply advanced analytics (and regulations to encourage this activity) to bigger data sets. This can help make R&D more efficient and effective and more precisely target treatments to patients who are most likely to benefit from them.

Efforts to make R&D more efficient and less risky can bring more cures to market faster, leading to greater options for patients and more competition to hold down prices.

Another way to reduce costs is to empower patients by making the drug delivery and access channels more efficient. The administration’s proposals to eliminate policies that prevent pharmacists from telling patients when they may have lower cost alternatives are a step in the right direction. However, proposals that require manufacturers to include pricing information in their direct-to-consumer ads may have the unintended consequence of scaring patients away from seeking care.

The work FasterCures has done on value demonstrates that patients find information other than the list price more helpful, such as out-of-pocket, non-medical and future costs. The most important actor in providing patients with meaningful transparency is the insurer, who sees the entirety of the patient experience and can provide information on the costs patients care about and the value of all of their treatment options, not just drugs.

The administration is right to address the affordability of drugs. It should start by identifying and eliminating practices that create market distortions, such as payments between health care entities based on the price of drugs.

For example, the insurance industry adopted patient cost-sharing to discourage patients from seeking care that was inappropriate or unnecessary. Why should a patient with late-stage cancer (or any disease, really) who is running out of options be subject to any cost-sharing at all? As options narrow, so too should their cost-sharing.

Additionally, patient cost-sharing could be tied to the value added of the specific product to the specific patient – 21st-century benefit designs for 21st-century treatments and cures. A change in the structure of formularies in this way shifts intermediaries’ focus to patient-centered care, rather than rent seeking on volume discounts and rebates.

Similarly, the administration’s request for information on whether it should revisit the current safe harbor that drug rebates have under anti-kickback laws deserves close consideration. If the government eliminated the safe harbor, it would force a move to fee-for-service payment arrangements for intermediaries, instead of agreements that pay based on a percentage of a drug’s wholesale acquisition costs. This move, coupled with 21st-century benefit designs, would improve chances of better care and faster cures for those who truly need them.

We now see the first wave of medical innovations that provide durable, curative benefits in one dose. However, our payment systems were established to be able to manage relatively predictable costs over long periods of time. Groups like MIT’s NEW Drug Development ParadIGmS (NEWDIGS) and the Duke-Margolis Center for Health Policy have created multi-stakeholder collaborations to identify promising ways of paying for and financing approaches for curative therapies that expand access to patients and smooth the costs of these therapies for payers. Future demonstrations by the Center for Medicare and Medicaid Innovation should incorporate the ability to test potential pilots from these programs to pay for treatments differently.

It is urgent that we address the affordability of drugs and health care overall. The administration and Congress need to put patients first to create more and better medicines, delivered faster and cheaper.


Tanisha Carino is the executive director of FasterCures, a center of the Milken Institute devoted to saving lives and improving the medical research system.

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