State Health Reform
Pramod Thomas
Will the State Healthcare Reform Lower the Cost of Prescription Drugs?
The answer to this question is Yes! Access to health care has improved greatly since the
1990s. However, the cost of prescription drugs continues to rise. Research carried out by the
Harvard Medical School found out that the reason for the continued upsurge of prescription drug
prices is the presence of government-shielded ‘cartel’ rights for manufacturers of drugs (Avorn,
2015).
Addressing the Rising Prices of Prescription Drugs and Medical Services
Is it a good initiative to adopt new policies and adjust payment incentives to reduce the
cost burden of unaffordable prescription drugs? This new policy will lower the cost in Maryland,
Virginia and Washington DC States. This policy would include:
•
Adopting drug formularies that use medical necessity criteria and evidence-based
standards for assessing whether emergent drugs signify assessable clinical
advances, increase competition, and bring values to customers.
•
Utilizing approved biosimilar that provides patients effective and safe alternatives
to more expensive specialty items, with possible savings of 20%-25%.
•
Aligning incentives of provider payment for:
•
Discouraging providers from pointlessly managing a drug in higher-cost settings
(e.g., an outpatient of the hospital) by adopting repayments that are settingneutral.
•
Eliminating higher payments of fee-for-service provider for recommending highprice drugs instead of alternatives of lower-cost.
•
Expanding the bundled payments’ usage that comprises the total care cost for a
particular condition, including drug costs.
•
Enhancing transparency in pricing of the drug for discouraging discrimination of price or
unfair practices.
•
Requiring rebate and discount parity for securing the same prices for private carriers that are
offered to governments and other third parties.
Reference
Avorn, J. (2015). The $2.6 billion pill—methodologic and policy considerations. New England
Journal of Medicine, 372(20), 1877-1879.
Brennan, H., Kapczynski, A., Monahan, C. H., & Rizvi, Z. (2016). A prescription for excessive
drug pricing: leveraging government patent use for health. Yale JL & Tech., 18, 275.
Greene, J. A., & Padula, W. V. (2017). Targeting Unconscionable Prescription-drug prices—
Maryland’s anti–price-gouging Law. New England Journal of Medicine, 377(2), 101103.
Kesselheim, A. S., Avorn, J., & Sarpatwari, A. (2016). The high cost of prescription drugs in the
United States: origins and prospects for reform. Jama, 316(8), 858-871.
Law, M. R., Cheng, L., Dhalla, I. A., Heard, D., & Morgan, S. G. (2012). The effect of cost on
adherence to prescription medications in Canada. Canadian Medical Association Journal,
cmaj-111270.
Lambert, A. A. (2014). Advanced pharmacy practice.
Nelson Education.
Lee, J. L., Fischer, M. A., Shrank, W. H., Polinski, J. M., & Choudhry, N. K. (2012). A
systematic review of reference pricing: implications for US prescription drug spending.
Liberman, J. N., & Roebuck, M. C. (2010). Prescription drug costs and the generic dispensing
ratio. Journal of Managed Care Pharmacy, 16(7), 502-506.
Morgan, S., & Kennedy, J. (2010). Prescription drug accessibility and affordability in the United
States and abroad. Issue brief (Commonwealth Fund), 89, 1-12.
Roebuck, M. C., Liberman, J. N., Gemmill-Toyama, M., & Brennan, T. A. (2011). Medication
adherence leads to lower health care use and costs despite increased drug
spending. Health affairs, 30(1), 91-99.
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