Tuesday, May 14, 2013

Will "Drug Reimportation" Rise Anew -- But This Time, By Another Name? Of "Moral Suasion" As Pricing Pressure?

Back in very early 2007, as Mr. Obama prepared for his first White House run, many of us gathered in Philadelphia to discuss practical ways to make United States health care delivery reform an important part of his manifold -- and then still emerging -- platforms.

Much talk centered around policies to liberalize drug reimportation rules, as it was clear that price disparities even between Canada and the US, meant that US patients were paying much more for the very same pills -- made in the very same facilities, than our good neighbors to the North. [I'll spare you the intervening narrative, of all that transpired -- since that February weekend.]

Fast forward to 2013 -- and pharma has largely taken reimportation off the table, by offering to kick in what started at $80 billion, and settled at around $100 billion, over ten years, to help close the donut hole. This is admirable -- but it probably won't be enough -- as I've said since early 2008.

No, here in 2013, as Obamacare is being implemented, day by day, I think we are going to see a "back-door" form of loosened drug reimportation rules. It will initially appear in the form of direct "moral suasion" -- on drug company pricing disparities -- even within the (awfully named) "first world" economies (US, Canada, Japan and the euro-zone, for starters). And, it will escalate, to more formal measures -- if need be.

Here is a bit of a good Reuters piece on it -- updating the state of the play. Do go read it all -- but I offer this bit, below, insofar as it mentions Whitehouse Station's Januvia® (until the end of Q1 2013, Merck's largest seller), by name:

. . . ."Over the intermediate term it doesn't look good for the industry. We will be facing enormous healthcare cost containment pressure in this country," said Joel Hay, professor, pharmaceutical economics and policy at the University of Southern California. "Big pharma will then have less and less resources to plow back into research and development."

It will mean less tolerance for wide variations in pricing for the same drugs. The wholesale U.S. price for a 100 milligram tablet of diabetes drug Januvia, the top-seller at Merck & Co, is $8.20, according to the company. The Common European Drug Database lists the same pill at $1.52 euros ($1.99) in Austria. . . .
There will be more -- but I must tend to other responsibilities, right now.


Anonymous said...

On a different note;

overblown or cause for concern?


Condor said...

As to whether public companies' private jet fleets ought to be tracable -- in real time -- I am uncertain.

Applicable SEC rules require that annual disclosure be made of the value of all personal travel on corporate aircraft -- as well as whether the traveller reimbursed the company in cash, for the use of the jet or helicopter.

I actually think that is the limit of the shareholders' legitimate interest -- I don't see how real time tracking of aircraft adds much -- other than some salacious detail -- should shenanigans occur.

So -- on balance (especially since Congress has since stepped in and ended the threat of real-time disclosure), I'd say Tracy Stanton had an interesting piece, today -- but it really isn't material, in any way.

So, yes -- slightly overblown concerns, there.

Namaste, and do stop back!