Policies to Improve Access to Medicines | Johns Hopkins Drug Access and Affordability Initiative

Approaches to Address Price Gouging

Lead Investigators: Jeremy Greene, Bill Padula

Companies like Turing Pharmaceuticals (Martin Shkreli) have taken advantage of markets for off-patent drugs with only one manufacturer and increased the prices of these drugs dramatically. For example, Turing Pharmaceuticals increased the price of the drug Daraprim from $13.50 to $750 overnight. In response to this type of price gouging, the state of Maryland recently enacted bipartisan legislation to empower the Attorney General to take legal actions against drug companies enacting “unconscionable” price increases for off-patent drugs with fewer than three competitors. Under the new legislation, the Attorney General can request a justification of the price increase from the drug company, and then can ask a state court to restrain or enjoin the price gouging activity, require the company to make the drug available to Medicaid and other state health programs at the original price for up to a year, restore money to patients affected by the price increase, and impose a civil penalty on the company of up to $10,000 for each violation.

Learn more about Maryland's Anti-Price Gouging Law.

Using 28 U.S.C. §1498 to Address the Public Health Crisis of Hepatitis C in Louisiana

Lead Investigator: Joshua Sharfstein

Hepatitis C is an infectious disease that affects an estimated 73,000 people in Louisiana. However, the current prices for highly effective medications to cure this disease are far too expensive for the state to provide treatment to all those who need of it. On April 12, 2017, Louisiana Secretary of Health Rebekah Gee wrote to Dr. Joshua Sharfstein seeking input from academic experts on two options for improving the affordability and accessibility of hepatitis C treatments. In response, a meeting was held at the Johns Hopkins Bloomberg School of Public Health. The experts then recommended that Secretary Gee write to the U.S. Department of Health and Human Services (HHS) to request that: (1) HHS pursue the recommendation made by a committee of the National Academy of Sciences, Engineering, and Medicine in A National Strategy for the Elimination of Hepatitis B and C: Phase Two Report to obtain a license for a highly effective therapy and then make deeply discounted medications available to Louisiana; and (2) simultaneously, HHS invoke 28 U.S.C. §1498, which provides for government use of patented products including pharmaceuticals, and authorize a company to make available a highly effective treatment at a fraction of current market cost.

Incorporating Drugs into Bundled Payments and ACOs

Lead Investigator: Gerard Anderson

Most drugs are still paid under a fee-for-service model where reimbursement is based on volume, not value. Payment reform is increasingly moving towards value based purchasing approaches, such as bundled payments and Accountable Care Organizations (ACOs), but drugs have not typically been included in these reforms. Including drugs in these models could lead to more transparent pricing, allow physicians and other providers to make allocation decisions that include tradeoffs between a drug and other treatment modalities, and put doctors in charge of deciding which drugs a patient receives instead of a Pharmacy Benefit Manager (PBM) or insurance company. In this project, we study how bundled payment programs operate, the successes and failures of previous bundled payment programs, the technical challenges that policymakers face when trying to incorporate drugs into bundled payment programs, and potential solutions that could bring prescription drugs into new payment models and ultimately lead to more evidence-based prescribing and pricing.

Designing Balanced Prescription Drug Coupon Policies

Lead Investigators: Caleb Alexander, Gerard Anderson, Bill Padula, Irene Murimi

Prescription drug coupons are used by pharmaceutical manufacturers to promote select products. While their use is prohibited in Medicare and Medicaid, their use among the commercially insured has not been without controversy. On the one hand, coupons lower out-of-pocket expenditures, thereby improving access and lowering cost-related non-adherence among patients, many of whom may be burdened by their prescription costs. Manufacturers may also use coupons to maximize their market share (for example, in settings where their sales would otherwise be eroded by unfavorable formulary placement on the part of pharmacy benefits managers). On the other hand, coupons reduce insurers’ ability to use economic incentives to encourage patients and providers to choose cost-effective therapies, and it is estimated that drug coupons will increase prescription drug spending by $32 billion in the next 10 years. While some states have expressed an interest in restricting the use of coupons or banning them outright, such approaches may not be politically feasible, and the optimal design of such policies is unknown. This project focuses on understanding the distribution and impact of prescription drug coupon use in the United States. In addition to quantifying the prevalence and clinical settings where coupons are currently used, we will also explore the effect of coupons for single-source and multi-source products on patient and third party prescription drug expenditures and utilization.