The Effects of Cost Containment and Price Policies on Pharmaceutical Expenditure in South Korea.

BACKGROUND: Policy-makers have proposed and implemented various cost-containment policies for drug prices and quantities to regulate rising pharmaceutical spending. Our study focused on a major change in pricing policy and several incentive schemes for curbing pharmaceutical expenditure growth during the 2010s in Korea. METHODS: We constructed the longitudinal dataset from 2008-2017 for 12 904 clinics to track the prescriber behavior before and after the implemented policies. Applying an interrupted time series model, we analyzed changes in trends in overall monthly drug expenditure and antibiotic drug expenditure per prescription for outpatient claims diagnosed with three major diseases before and after the policies' implementation. RESULTS: Significant price reductions and incentives for more efficient drug prescriptions resulted in an immediate decrease in monthly drug expenditures in clinics. However, we found attenuated effects over the long run. The top-spending clinics showed the highest rate of increase in drug costs. CONCLUSION: Future policy interventions can maximize their effects by targeting high-spending providers.

The 'Netflix plus model': can subscription financing improve access to medicines in low- and middle-income countries?

At present, pay for prescription models are insufficient at containing costs and improving access to medicines. Subscription financing through tenders, licensing fees and unrestricted or fixed volumes can benefit stakeholders across the supply chain. Pharmaceutical manufacturers can reduce the need for marketing expenses and gain certainty in revenue. This will decrease costs, improve predictability in budget expenditure for payers and remove price as a barrier of access from patients. Inherently, low- and middle-income countries lack the purchasing power to leverage price discounts through typical price arrangements. These markets can realise substantial savings for branded and generic medicines through subscription financing. Procuring of on-patent and off-patent drugs requires separate analysis for competition effects, the length of contract and encouraging innovation in the medicine pipeline. Prices of competitive on-patent medicines and orphan drugs can be reduced through increased competition and volume. Furthermore, pooling expertise and resources through joint procurement has the potential for greater savings. Incentivising research and development within the pharmaceutical industry is essential for sustaining a competitive market, preventing monopolies and improving access to expensive treatments. However, technical capacity, forecasting demand and the quality of generic medicines present limitations which necessitate government support and international partnerships. Ultimately, improving access requires progressive financing mechanisms with patients and cost containment in mind.

Early VEGF testing in inflammatory neuropathy avoids POEMS syndrome misdiagnosis and associated costs.

BACKGROUND: Prompt diagnosis and early treatment prevents disability in Polyneuropathy Organomegaly Endocrinopathy Monoclonal-protein and Skin Changes (POEMS) syndrome. Delay in diagnosis is common with 55% of patients initially incorrectly diagnosed with chronic inflammatory demyelinating polyradiculoneuropathy (CIDP). Patients are often treated with intravenous immunoglobulin which is both expensive and ineffective in the treatment of POEMS. Testing patients with acquired demyelinating neuropathy with serum vascular endothelial growth factor (VEGF) more accurately identifies POEMS syndrome than the current standard of care. Incorporating VEGF testing into screening could prevent misdiagnosis and reduce costs. METHODS: We used observed treatment information for patients in the University College London Hospital's POEMS syndrome database (n=100) and from the National Immunoglobulin Database to estimate costs associated with incorrect CIDP diagnoses across our cohort. We conducted a model-based cost-effectiveness analysis to compare the current diagnostic algorithm with an alternative which includes VEGF testing for all patients with an acquired demyelinating neuropathy. RESULTS: Treatment associated with an incorrect CIDP diagnosis led to total wasted healthcare expenditures of between £808 550 and £1 111 756 across our cohort, with an average cost-per-POEMS-patient misdiagnosed of £14 701 to £20 214. Introducing mandatory VEGF testing for patients with acquired demyelinating neuropathy would lead to annual cost-savings of £107 398 for the National Health Service and could prevent misdiagnosis in 16 cases per annum. CONCLUSIONS: Misdiagnosis in POEMS syndrome results in diagnostic delay, disease progression and significant healthcare costs. Introducing mandatory VEGF testing for patients with acquired demyelinating neuropathy is a cost-effective strategy allowing for early POEMS diagnosis and potentially enabling prompt disease-directed therapy.

State strategies to address medicaid prescription spending: negotiated pricing vs price transparency.

This research longitudinally examines the association between levels of state Medicaid prescription spending and the state strategies intended to constrain cost increases: the negotiated pricing strategy, as indicated by state rebate programs, and the price transparency strategy, as indicated by state operation of All-Payer Claims Databases. The findings demonstrate evidence that state Medicaid prescription spending is influenced by the negotiated pricing strategy, especially Managed Care Organization (MCO) rebates under the Patient Protection and Affordable Care Act, but not influenced by the price transparency strategy. State decisions for MCO rebates, such as carving prescription benefits into managed care benefits, were effective in containing levels of Medicaid prescription spending over time, while other single- and multi-state rebate programs were not. Based on these findings, state policymakers may consider utilizing the MCO rebate program to address increases in Medicaid prescription spending.

Evaluation of a Patient-Collected Audio Audit and Feedback Quality Improvement Program on Clinician Attention to Patient Life Context and Health Care Costs in the Veterans Affairs Health Care System.

Importance: Evidence-based care plans can fail when they do not consider relevant patient life circumstances, termed contextual factors, such as a loss of social support or financial hardship. Preventing these contextual errors can reduce obstacles to effective care. Objective: To evaluate the effectiveness of a quality improvement program in which clinicians receive ongoing feedback on their attention to patient contextual factors. Design, Setting, and Participants: In this quality improvement study, patients at 6 Department of Veterans Affairs outpatient facilities audio recorded their primary care visits from May 2017 to May 2019. Encounters were analyzed using the Content Coding for Contextualization of Care (4C) method. A feedback intervention based on the 4C coded analysis was introduced using a stepped wedge design. In the 4C coding schema, clues that patients are struggling with contextual factors are termed contextual red flags (eg, sudden loss of control of a chronic condition), and a positive outcome is prospectively defined for each encounter as a quantifiable improvement of the contextual red flag. Data analysis was performed from May to October 2019. Interventions: Clinicians received feedback at 2 intensity levels on their attention to patient contextual factors and on predefined patient outcomes at 4 to 6 months. Main Outcomes and Measures: Contextual error rates, patient outcomes, and hospitalization rates and costs were measured. Results: The patients (mean age, 62.0 years; 92% male) recorded 4496 encounters with 666 clinicians. At baseline, clinicians addressed 413 of 618 contextual factors in their care plans (67%). After either standard or enhanced feedback, they addressed 1707 of 2367 contextual factors (72%), a significant difference (odds ratio, 1.3; 95% CI, 1.1-1.6; P = .01). In a mixed-effects logistic regression model, contextualized care planning was associated with a greater likelihood of improved outcomes (adjusted odds ratio, 2.5; 95% CI, 1.5-4.1; P < .001). In a budget analysis, estimated savings from avoided hospitalizations were $25.2 million (95% CI, $23.9-$26.6 million), at a cost of $337 242 for the intervention. Conclusions and Relevance: These findings suggest that patient-collected audio recordings of the medical encounter with feedback may enhance clinician attention to contextual factors, improve outcomes, and reduce hospitalizations. In addition, the intervention is associated with substantial cost savings.

International Experience in Therapeutic Value and Value-Based Pricing: A Rapid Review of the Literature.

OBJECTIVES: To characterize at a global level the concept of therapeutic value (TV) and describe the experience of value-based pricing (VBP) policies in 6 reference countries. METHODS: We conducted a rapid review of the literature that addressed 2 exploratory research questions. A systematic and exhaustive search was carried out up to July 2018 in MEDLINE (Ovid), Embase, Scopus, and Web of Science. RESULTS: The concepts of TV and VBP are related; value frameworks for medicines should include social preferences, comparative effectiveness, safety, adoption viability, social impact, high quality of evidence, severity of illness, and innovation. The added therapeutic value (ATV) is the manner of measuring the therapeutic advantages of new medicines compared with existing ones in terms of comparative effectiveness and safety. There are variations in the mechanisms of reimbursement and drug pricing regulation between the countries of study. CONCLUSION: In a VBP system it is essential to establish the TV and ATV of a new medicine. Although there are no methodological guidelines for the implementation of VBP policies, the process implies from the beginning the definition of TV categories that will be included in the drug pricing and reimbursement systems. Agreements between the pharmaceutical industry and governments have become a useful tool as a negotiating mechanism in most countries.

Cost-minimization analysis of individually tailored or fixed-scheduled rituximab maintenance therapy for antineutrophil-cytoplasm antibody associated vasculitides.

OBJECTIVE: Patients included in MAINRITSAN2 trial received either an individually tailored or a fixed-schedule therapy with rituximab as  maintenance treatment of antineutrophil cytoplasm antibody associated  vasculitides. The aim of this study was to compare the real-world costs  of both arms. METHOD: We performed a cost-minimization analysis over an 18-month time period, estimating direct costs -drug acquisition,  preparation, administration and monitoring costs- from the health  system perspective. We conducted a number of additional sensitivity  analyses with different assumptions for unit costs, with further scenarios including the interquartile range of the tailored-infusion group results,  different number of monitoring visits for fixed-schedule regimen and  different number of reported severe adverse events. A cost- effectiveness analysis was conducted as a sensitivity analysis using the  absolute difference in the relapse rate and its confidence interval. RESULTS: The individually tailored maintenance therapy with rituximab was shown to be a cost-saving treatment compared to the  fixed-schedule therapy (6,049 euros vs. 7,850 euros). Savings resulted  primarily from  lower drug acquisition costs (2,861 vs. 4,768 euros) and lower preparation and administration costs (892 vs. 1,486 euros), due to the lower number of infusions per patient in the tailored-infusion  regimen. The tailoredinfusion regimen presented higher monitoring  costs (2,296 vs. 1,596 euros). This result was replicated in all  assumptions considered in the sensitivity analysis of cost-minimization  approach. CONCLUSIONS: From the perspective of the health system, the  tailoredtherapy regimen seems to be the preferable option in terms of  direct costs. Further studies assessing all the effects and costs  associated to vasculitides maintenance treatment with rituximab are  needed to support clinical management and healthcare planning.

Objetivo: Los pacientes incluidos en el ensayo MAINRITSAN2 recibieron una pauta individualizada o un esquema fijo de rituximab  como tratamiento de mantenimiento para la vasculitis asociada con  anticuerpos contra el citoplasma de los neutrófilos. El objetivo de este  estudio es comparar los costes reales de ambos esquemas de  tratamiento.Método: Se llevó a cabo un análisis de minimización de costes sobre un periodo de 18 meses, estimando los costes directos ­adquisición del fármaco, preparación, administración y costes de monitorización­  desde la perspectiva del sistema de salud. Se realizaron varios análisis  de sensibilidad con diferentes supuestos para los costes unitarios,  añadiendo escenarios que incluían el rango intercuartílico de los  resultados en el grupo de la pauta individualizada, diferente número de  visitas de control para el grupo que seguía el esquema fijo y distinto  número de eventos adversos registrados. Se realizó un análisis de  coste-efectividad como parte del análisis de sensibilidad usando la  diferencia absoluta en la tasa de recaída y su intervalo de confianza.Resultados: El esquema de tratamiento con la pauta individualizada demostró una reducción del coste en comparación con el  esquema de dosis fijas (6.049 versus 7.850 euros). El ahorro se debió  principalmente a un menor coste en la adquisición del fármaco (2.861  versus 4.768 euros) dexchlorphey a menos costes de preparación y  administración (892 versus 1.486 euros), debido al menor número de  infusiones por paciente en el brazo del esquema individualizado. Este  esquema individualizado presentó mayores costes de monitorización  (2.296 versus 1.596 euros). Este resultado se repitió en todos los  supuestos considerados en el análisis de sensibilidad desde el enfoque  de minimización de costes.Conclusiones: Desde la perspectiva del sistema de salud, la pauta individualizada parece ser la opción preferible en términos de  costes directos. No obstante, son necesarios más estudios que evalúen  todos los efectos y costes asociados al tratamiento de mantenimiento  con rituximab de la vasculitis por anticuerpo anticitoplasma de neutrófilo para respaldar el manejo clínico y la asistencia sanitaria.

The Evolution and Impact of Hospital Price Transparency in North Carolina.

BACKGROUND Health care costs are on the rise and causing financial burden for many patients. Price transparency has been proposed as a tool to control health care costs. New federal legislation requires all hospitals to publish their chargemasters, or price lists, on their websites as of January 1, 2019.METHOD All general acute care hospitals in North Carolina were contacted in 2017 to request price information. After mandatory chargemaster publication was in effect in 2019, all hospitals previously contacted had their websites evaluated for chargemaster availability. Price information collected in 2019 was compared to information collected in 2017.RESULTS Zero percent of hospitals provided access to chargemasters in 2017, and 72% provided access in 2019. Average price per queried item decreased from 2017 to 2019. Price variability also decreased. However, there was no statistical significance when comparing price means.LIMITATIONS In 2017, price data was limited due to low hospital participation when queried for prices. In 2019, this study's definition of "access to chargemaster" inadvertently excluded some North Carolina hospitals from qualifying as providing price access.CONCLUSION After mandated chargemaster publication, consumer access to hospital price lists greatly increased in North Carolina. Price data, although limited, reveals decreased mean prices and decreased price variability for queried procedures after chargemaster publication was required.

Fighting healthcare rocketing costs with value-based medicine: the case of stroke management.

Value-Based Medicine (VBM) is imposing itself as 'a new paradigm in healthcare management and medical practice.In this perspective paper, we discuss the role of VBM in dealing with the large productivity issue of the healthcare industry and examine some of the worldwide industrial and technological trends linked with VBM introduction. To clarify the points, we discuss examples of VBM management of stroke patients.In our conclusions, we support the idea of VBM as a strategic aid to manage rising costs in healthcare, and we explore the idea that VBM, by establishing value-generating networks among different healthcare stakeholders, can serve as the long sought-after redistributive mechanism that compensate patients for the industrial exploitation of their personal medical records.

Cost-Related Medication Nonadherence and Cost-Reduction Strategies Among Elderly Cancer Survivors with Self-Reported Symptoms of Depression.

How depression affects the medication cost burden for elderly cancer survivors has not been well studied. This study aims to investigate whether depression is associated with higher rates of cost-related medication nonadherence, and cost-reduction strategies among the elderly cancer survivors. Self-reports from survey files of the 2015 Medicare Current Beneficiary Survey-Medicare database were used to identify elderly cancer patients aged 65 years and older with and without depression. The 2 outcomes were cost-related nonadherence (CRN) and adoption of cost-reduction strategies. Bivariate analysis was used to describe the sample. Multivariable logistic regression was performed to examine the impact of depression on CRN and the use of cost-reduction strategies, after controlling for all other covariates. Among the 3765 elderly cancer survivors identified, 523 (14%) reported depression. In the group with depression, 26% reported CRN compared with 12% of the group without depression; 71% of individuals with depression reported having cost-reduction strategies while 65% of individuals with no depression reported such activity. In adjusted analyses, individuals with depression were significantly more likely to report CRN (adjusted odds ratio, 1.84; 95% confidence interval 1.33-2.54) and cost-reduction strategies (adjusted odds ratio, 1.37; 95% confidence interval, 1.07-1.76). Depression was associated with higher probabilities of both CRN and the adoption of cost-reduction strategies, indicating that depression can exacerbate the medication cost burden for elderly cancer survivors. It is important to detect and manage depression in elderly cancer survivors to reduce CRN and cost-reduction strategies.

Does external reference pricing deliver what it promises? Evidence on its impact at national level.

BACKGROUND: External reference pricing (ERP) is widely used to regulate pharmaceutical prices and help determine reimbursement. Its implementation varies substantially across countries, making it difficult to study and understand its impact on key policy objectives. OBJECTIVES: To assess the evidence on ERP in different settings and its impact on key health policy objectives, notably, cost-containment, pharmaceutical price levels, drug use, equity, efficiency, availability, affordability and industrial policy; and second, to critically assess the quality of evidence on ERP. METHODS: Primary and secondary data collection through a survey of leading experts and a systematic literature review, respectively, over the 2000-2017 period. RESULTS: Forty five studies were included in the systematic review (January 2000-December 2016). Primary evidence was gathered via survey distribution to experts in 21 countries (January-July 2017). ERP contributes to cost-containment, but this is a short-term effect highly dependent on the way ERP is designed and implemented. Low prices, as a result of ERP, can undermine the availability of medicines and lead to launch delays or product withdrawals. Downward price convergence can hamper investment in innovation. ERP does not seem to promote efficiency in achieving health system goals. As evidence is weak, results need to be interpreted with caution. CONCLUSIONS: ERP has not regulated prices efficiently and has unintended consequences that reduce the benefits arising from it. If ERP is carefully designed with minimal price revisions, prudent selection of basket size and countries, and consideration of transaction prices, it could be a more effective mechanism enhancing welfare, equitable access to medicines within countries and help promote industry innovation.

Reducing Healthcare Costs for Mental Health Hospitalizations With the Evidence-based COPE Program for Child and Adolescent Depression and Anxiety: A Cost Analysis.

INTRODUCTION: Although depression and anxiety affect approximately 20% of children and adolescents, many of those affected do not receive treatment because, in large part to the shortage of mental health providers across the United States. As an alternative to traditional mental health counseling, the Creating Opportunities for Personal Empowerment (COPE) program is an evidence-based manualized 7-session cognitive behavioral therapy-based program that is being effectively delivered to children and teens with depression and anxiety by pediatric and family healthcare providers in primary care practices with reimbursement from insurers. METHODS: The purpose of this study was to perform a cost analysis of delivering COPE and compare it to the cost of hospitalization for primary mental health diagnosis. RESULTS: Findings indicated a cost savings of $14,262 for every hospitalization that is prevented. DISCUSSION: Implementation of COPE can improve outcomes for children and teens with depression and anxiety, and could potentially result in millions of dollars of cost savings for the U.S. healthcare system.

Fighting Excessive Pharmaceutical Prices: Evaluating the Options.

New treatment options for various cancer therapies appear to be extremely expensive and prices may increase further. The affordability and availability of life-saving medicines is therefore a key issue in the national health policies of all countries. International and European law grant several price-reducing options, including compulsory licensing. Still, countries are reluctant to apply for compulsory licensing and/or other regulatory options to curtail pharmaceutical prices. Why is that? Evaluating the options will support health policy decision-making on safeguarding access to affordable innovative medicines.

Short-term and long-term unintended impacts of a pilot reform on Beijing's zero markup drug policy: a propensity score-matched study.

BACKGROUND: In September 2012, Beijing, the capital of China, selected five tertiary hospitals as pilots to remove the previously allowed 15% markup for drug sales. However, while most research demonstrated the significant decrease in drug sales, the core issue of high health expenditure was not well solved because of the unintended policy impact. This study aimed to empirically evaluate the short-term and long-term unintended impacts on controlling medical expenses of Beijing's zero markup drug policy from 2012 to 2015. METHODS: This study extracted 2012-2015 individual-level data from the Beijing Urban Employee Basic Medical Insurance (UEBMI) database and performed a propensity score-matched analysis to evaluate the short-term and long-term impacts on controlling medical expenses. All inpatients in the 5 pilot reform hospitals were selected as the intervention group, while inpatients in other tertiary hospitals were selected as the control group. RESULTS: A total of 520,996 inpatients were extracted in this study. For patients in the pilot hospitals, the total expenditures per admission decreased from 17,140.3 yuan in 2012 to 15,430.1 yuan in 2013 and then increased to 16,789.8 yuan in 2015. Expenditure on drugs reduced from 5811.7 yuan in 2012 to 3903.4 yuan in 2015. However, a significant substitution effect of medical consumables was first observed in the third quarter of 2014, which undermined the impact of the policy. In the long-term, the intervention group and control group demonstrated the same trend. CONCLUSIONS: After the zero markup drug policy, expenditure on drugs revealed a continuous decline. However, the decline in total expenditure was weakened by the substitution effect of medical consumables in the long term.

A claims-based algorithm to reduce relapse and cost in schizophrenia.

OBJECTIVES: To refine a payer algorithm identifying patients with schizophrenia at high risk of relapse within a managed Medicaid population and evaluate its effectiveness in a case management (CM) program. STUDY DESIGN: Cross-sectional and longitudinal study design. METHODS: The algorithm used a single payer's Medicaid medical and pharmacy claims (August 1, 2009, to July 31, 2014) for patients with schizophrenia (N = 12,353) to predict those at high risk for hospitalization. The final algorithm was used in a CM program (outbound communication to providers) at 3 payer service centers in 3 states. Based on the algorithm, 60 patients (20 from each site) with the highest risk scores were targeted for CM (CM group) and 60 (those patients ranked 21st-40th most at-risk at each site) comprised the control group. Chi-square tests compared groups on frequency measures (hospitalizations, emergency department [ED] visits). Pre- to postimplementation differences were tested using McNemar's test. A pre-post analysis of variance assessed mean numbers of inpatient admissions, inpatient days, and ED visits for both groups. RESULTS: The algorithm had good positive predictive power (64.0%), negative predictive power (94.7%), sensitivity (40.2%), and specificity (97.9%). Following CM, the proportion of patients with at least 1 inpatient admission in the CM group decreased (23.3% to 13.3%), as did the rate of ED visits per month (by approximately 15%), whereas increases were observed in the control group. CONCLUSIONS: Although not all of these differences were statistically significant, they suggest that the algorithm may be an effective case-finding tool for plans attempting to mitigate hospitalizations among high-risk patients with schizophrenia.