Last week, former Pfizer Global R&D head John LaMattina wrote another of his columns for Forbes, this one on the subject of pay-for-performance deals for pharmaceuticals. These deals, in which insurers contract with pharmaceutical companies to pay for drugs based on how well they perform in practice, are becoming more common as the public conversation over drug prices escalates (examples here, here, and here). There are many interesting questions around pay-for-performance deals, but LaMattina closes his column with a focus on one: their impact on the direction of pharmaceutical R&D.
Specifically, LaMattina argues: “Biopharmaceutical companies will closely watch how pay-for-performance evolves. Should payers become overly enthralled with rebates and continue to raise the bar, companies could move their R&D efforts into areas where a drug’s impact can be easily defined and measured. In such an environment, therapeutic areas like depression and obesity could give way to diseases like psoriasis or rare diseases where patient advocacy remains strong. In its efforts to rein in costs, payers might unwittingly force R&D out of areas where new drugs are still needed. That would be unfortunate.”
LaMattina is exactly right in one sense – and highly misleading in another. First, underlying LaMattina’s argument is a critical claim that the way in which drugs are paid for affects the types of drugs that are developed. This is absolutely right. Although it may be perfectly obvious to some, as someone who just wrote a 25,000 word article on this very topic (oh hi, SSRN), I can attest that recognition of this idea is too often absent from the legal literature. We largely focus on prescription drug insurance and payment as a way to encourage access to medications that already exist, but we ignore its effects on the types of drugs that are produced in the first place.
This week we talked with George J. Annas, Chairman of the Bioethics & Human Rights Department, and William Fairfield Warren Distinguished Professor, at Boston University. George’s work is legendary among health policy experts; a 1998 tribute from Jay Katz gives some sense of its breadth and depth. Having reviewed numerous works, Katz states:”I have barely conveyed the richness of George Annas’ observations on the ambiguities in motivations and actions that persist in current research practices. The many recommendations he makes, should be of valuable assistance to those interested in reforming current rules governing research on humans. Plagued by Dreams…reveal[s] another facet of George Annas’ personality: His commitment to public advocacy. He values scholarship but he also wants it to have an impact on shaping institutions and health care policies…In the many settings in which I have encountered George Annas over the years, I have admired his boldness, intellect, compassion and moral vigor.” Our conversation had the theme “paternalism & its critics,” based on articles George had recently authored (or co-authored with last week’s guest, Wendy Mariner) on informed consent, genomics, and sugary drinks.
The Week in Health Law Podcast from Frank Pasquale and Nicolas Terry is a commuting-length discussion about some of the more thorny issues in Health Law & Policy. Subscribe at iTunes, listen at Stitcher Radio, Tunein and Podbean, or search for The Week in Health Law in your favorite podcast app. Show notes and more are at TWIHL.com. If you have comments, an idea for a show or a topic to discuss you can find us on twitter @nicolasterry @FrankPasquale @WeekInHealthLaw
The symposium, which was inspired by the wonderful recent PFC & Berkman Center Big Data conference, featured enlightening speeches by former PFC fellows Nicholson Price on incentives for the development of black box personalized medicine and Jeff Skopek on privacy issues. In addition we were lucky to have Peter Yu speaking on “Big Data, Intellectual Property and Global Pandemics” and Michael J. Madison on Big Data and Commons Challenges”. The presentations and recordings of the session will soon be made available on our Center’s webpage.
Thanks everybody for your dedication, inspiration, great presentations and an exciting panel discussion.
“Legal Dimensions of Big Data in the Health and Life Sciences – From Intellectual Property Rights and Global Pandemics to Privacy and Ethics”
In response to the religious objections levied against the contraceptives coverage mandate at issue in Hobby Lobby, Zubik, and gobs of other cases, many have argued that this was really a matter of subjugating women – not about religion per se. Well, now we have a test case: Vermont’s governor just signed into law a requirement that public and private health insurance cover vasectomies without copays and deductibles. There won’t be the same arguments about abortifacients here, but many religious employers should object just the same, if they’re being consistent. Now let’s watch and see…