REGISTER NOW (12/12)! Sixth Annual Health Law Year in P/Review

The Sixth Annual Health Law Year in P/Review symposium will feature leading experts discussing major developments during 2017 and what to watch out for in 2018. The discussion at this day-long event will cover hot topics in such areas as health policy under the new administration, regulatory issues in clinical research, law at the end-of-life, patient rights and advocacy, pharmaceutical policy, reproductive health, and public health law.

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REGISTER NOW (12/12)! Sixth Annual Health Law Year in P/Review

The Sixth Annual Health Law Year in P/Review symposium will feature leading experts discussing major developments during 2017 and what to watch out for in 2018. The discussion at this day-long event will cover hot topics in such areas as health policy under the new administration, regulatory issues in clinical research, law at the end-of-life, patient rights and advocacy, pharmaceutical policy, reproductive health, and public health law.

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Monthly Round-Up of What to Read on Pharma Law and Policy

By Ameet SarpatwariMichael S. Sinha, and Aaron S. Kesselheim

Each month, members of the Program On Regulation, Therapeutics, And Law (PORTAL) review the peer-reviewed medical literature to identify interesting empirical studies, policy analyses, and editorials on health law and policy issues relevant to current or potential future work in the Division.

Below are the abstracts/summaries for papers identified from the month of June. The selections feature topics ranging from physicians’ views of the Sunshine Act; to a biomarker-based drug development case study of CETP inhibitors, to the potential return on public investment in detecting adverse drug effects. A full posting of abstracts/summaries of these articles may be found on our website.

  1. Chimonas S, DeVito NJ, Rothman DJ. Bringing Transparency to Medicine: Exploring Physicians’ Views and Experiences of the Sunshine Act. Am J Bioeth. 2017;17(6):4-18.
  2. Dong K, Boehm G, Zheng Q. Economic Impacts of the Generic Drug User Fee Act Fee Structure. Value Health. 2017;20(6):792-8.
  3. Hey SP, Franklin JM, Avorn J, Kesselheim AS. Success, Failure, and Transparency in Biomarker-Based Drug Development: A Case Study of Cholesteryl Ester Transfer Protein Inhibitors. Circ Cardiovasc Qual Outcomes. 2017;10(6).
  4. Huybrechts KF, Kesai RJ, Park M, Gagne JJ, Najafzadeh M, Avorn J. The Potential Return on Public Investment in Detecting Adverse Drug Effects. Med Care. 2017;55(6):545-51.
  5. Sommers BD, Maylone B, Blendon RJ, Orav EJ, Epstein AM. Three-Year Impacts Of The Affordable Care Act: Improved Medical Care And Health Among Low-Income Adults. Health Aff (Millwood). 2017;36(6):1119-28.
  6. ‘t Hoen EFM, Boulet P, Baker BK. Data exclusivity exceptions and compulsory licensing to promote generic medicines in the European Union: A proposal for greater coherence in European pharmaceutical legislation. J Pharm Policy Pract. 2017;10:19.

Call for Papers – European Pharmaceutical Law Review (EPLR)

Dear Colleagues,

I am happy to announce that I have just joined the Board of Editors of the new journal “European Pharmaceutical Law Review” (EPLR). One of my first tasks is to spread the news about our “Call for Papers”. Further information is available here.

The European Pharmaceutical Law Review (EPLR) reports on key legislative developments in the EU and the Member States, and identifies and analyses important judgments that shape the interpretation and application of EU pharmaceutical law, in particular those by the European Courts, international courts and tribunals such as the WTO’s Dispute Settlement Body, and higher national courts.

In order to establish itself as a forum for dialogue between different stakeholders in pharmaceutical regulation and governance, it will invite contributions from academics, practitioners, regulators and civil society representatives. Topics covered by EPLR include:

  • Pharmaceutical law and policy in all jurisdictions (regional, national, international);
  • Commission decisions (EMA opinions) and regulatory guidelines;
  • National EU, and International Jurisprudence;
  • Medical devices;
  • Borderline cases: pharmaceuticals/food/cosmetics/chemicals
  • Patents /Trademarks;
  • Health Technology Assessment and pricing/reimbursement;
  • Digital health/Big data;

All contributions will be subject to double blind peer-review before acceptance for publication and are required to conform to the author guidelines.

We are looking forward to receive and review the first submissions!

Best wishes/ Timo

Mylan Announces Generic EpiPen; Baffles Health Policy Wonks Everywhere

By Rachel Sachs

For weeks now, the list price of Mylan’s EpiPen ($600 for a two-pack) has been exhaustively covered by journalists, debated by academics, and skewered by policymakers as an example of the pricing excesses of even generic pharmaceutical companies.  Mylan’s latest response to the outrage?  Announce that soon, it will be launching a generic EpiPen at a list price of $300 for a two-pack.  I and others who study these issues full time cannot understand why Mylan thought this would work to quell the widespread indignation over its pricing practices.

The first red flag came when Mylan stated it would launch the product “in several weeks.”  I often find myself defending the FDA against charges that it is too slow to approve new technologies, but let’s face it: it would be shocking news if they were able to approve a new version of anything in just a few weeks.  Mylan has not had this in the works for months, so it seems that the new generic product is literally identical to the branded EpiPen – just with a different label.  So, essentially, Mylan is preparing to cut the price of its product in half.  (Even though that’s still higher than the price was just three years ago, before Mylan began its regular price hikes, and even though this should make us question their justifications for the $600 price.) Great, right?  Not so fast.

What reasons (other than public relations) might Mylan have for introducing an authorized generic of this type and how might they attempt to use the two products to maintain their current level of revenues?  By bringing the first generic EpiPen to market, Mylan has now planted its flag in the generics space.  Although epinephrine (the drug inside the EpiPen) is now generic and cheap to produce and sell, companies do seem to find it difficult to replicate the device portion of the EpiPen, with Sanofi’s product recently removed from the market due to dosing issues and Teva’s application for a generic denied by the FDA with no public explanation just a few months ago.  Mylan has now benchmarked a new price for those products if they return – they must price below $300 for a two-pack to compete effectively with Mylan. Continue reading

Drug Pricing, Shame, and Shortages

By Nicholson Price

Drug prices have been making waves in the news recently.  The most recent case is the huge price hikes of the EpiPen, which provides potentially life-saving automatic epinephrine injections to those with severe allergies.  Mylan, which makes the EpiPen, has raised its price some 450% over the last several years.  The EpiPen is a particularly problematic—and media-friendly—story because the emblematic use case is the kid in school who can’t breathe because she came into contact with peanuts.  Jacking up the price on something that’s not optional—for parents and for schools—seems heartless.  Thoughtful pieces have pointed out how the EpiPen price increases demonstrate problems with our health care system and drug/device approval system in general.

Other big recent cases that have hit the news include huge increases in the price of insulin, and, of course, Turing Pharmaceuticals’/Martin Shkreli’s ~5000% price hike on the drug Daraprim.  The EpiPen and Daraprim are especially notable because patents mostly aren’t involved—the effective monopoly appears to come from the delay or challenge in getting generic products approved by FDA (although the EpiPen itself also seems tough to make).  And, of course, drug prices aren’t regulated in the US the way they are in much of the world.

These stories seem crazy, cruel, and fascinating.  And they raise (for me, anyway) the question: what’s changed?  This seems like a relatively new phenomenon.  But FDA’s had a backlog for a while, and drug prices have long been unregulated. Continue reading

Thoughtful CREATES Act May Help Speed Generic Drug Approvals

By Rachel Sachs

Earlier this week, a bipartisan group of Senators introduced the Creating and Restoring Equal Access to Equivalent Samples (CREATES) Act, a bill designed to speed generic drug approvals (and thus lower drug costs) by removing a delaying tactic some branded drug companies use to impede the generic approval process.  Essentially, branded drug companies sometimes refuse to sell samples of their drugs to generic companies who want to come to market, preventing them (for at least a time) from performing the necessary bioequivalence testing and extending their market dominance.  Sometimes companies try to hide behind a regulatory program, Risk Evaluation or Mitigation Strategies (REMS), in claiming that they legally cannot provide such access.  Other times, such as in Martin Shkreli’s case, no such excuse exists and the company simply refuses to provide access.

These delaying tactics have received substantial attention from both scholars (Jordan Paradise’s work can be found here) and lawmakers.  This is Congress’ third attempt at addressing the situation, although as Ed Silverman helpfully notes at Pharmalot, the previous attempts would have only dealt with REMS delays, not Shkreli-like closed distribution systems.  By contrast, the CREATES Act would require brand-name companies to provide access to samples of their drugs, whether subject to a REMS or not, on “commercially reasonable, market-based terms” or face potential civil action from the generic drug company in question.  There’s already been a lot of commentary on the bill, including a particularly helpful blog post from Geoffrey Manne providing background on REMS abuses and on why antitrust law has not sufficed to solve the problem.  Here, I want to add two points that I haven’t yet seen in the discussion: one about drug shortages and another about remedies.

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Monthly Round-Up of What to Read on Pharma Law and Policy

By Ameet Sarpatwari and Aaron S. Kesselheim

Each month, members of the Program On Regulation, Therapeutics, And Law (PORTAL) review the peer-reviewed medical literature to identify interesting empirical studies, in-depth analyses, and thoughtful editorials on pharmaceutical law and policy.

Below are the papers identified from the month of May. The selections feature topics ranging from a review of progress in the fight against multidrug-resistant bacteria, to the role regulators can play in increasing the affordability of drugs, to an assessment of the strength of the surrogate-survival relationship for cancer drugs approved on the basis of surrogate endpoints. A full posting of abstracts/summaries of these articles may be found on our website.

  1. Deak D, Outterson K, Powers JH, Kesselheim AS. Progress in the Fight Against Multidrug-Resistant Bacteria? A Review of U.S. Food and Drug Administration-Approved Antibiotics, 2010-2015. Ann Intern Med. 2016 May 31. [Epub ahead of print]
  2. Eichler HG, Hurts H, Broich K, Rasi G. Drug Regulation and Pricing–Can Regulators Influence Affordability? New Engl J Med. 2016 May 12;374(19):1807-9.
  3. Hey SP, Weijer C. What questions can a placebo answer? Monash Bioeth Rev. 2016 May 17. [Epub ahead of print]
  4. Kapczynski A, Kesselheim AS. ‘Government Patent Use’: A Legal Approach To Reducing Drug Spending. Health Aff. 2016 May 1;35(5):791-7.
  5. Kim C, Prasad V. Strength of Validation for Surrogate End Points Used in the US Food and Drug Administration’s Approval of Oncology Drugs. Mayo Clin Proc. 2016 May 10. [Epub ahead of print]
  6. Outterson K, McDonnell A. Funding Antibiotic Innovation With Vouchers: Recommendations On How To Strengthen A Flawed Incentive Policy. Health Aff. 2016 May 1;35(5):784-90.
  7. Patel MS, Day SC, Halpern SD, Hanson CW, Martinez JR, Honeywell S Jr, Volpp KG. Generic Medication Prescription Rates After Health System-Wide Redesign of Default Options Within the Electronic Health Record. JAMA Intern Med. 2016 May 9. [Epub ahead of print]
  8. Yeh JS, Franklin JM, Avorn J, Landon J, Kesselheim AS. Association of Industry Payments to Physicians With the Prescribing of Brand-name Statins in Massachusetts. JAMA Intern Med. 2016 May 9. [Epub ahead of print]

Legal Dimensions of Big Data in the Health and Life Sciences

By Timo Minssen

Please find below my welcome speech at last-weeks mini-symposium on “Legal dimensions of Big Data in the Health and Life Sciences From Intellectual Property Rights and Global Pandemics to Privacy and Ethics at the University of Copenhagen (UCPH).  The event was organized by our Global Genes –Local Concerns project, with support from the UCPH Excellence Programme for Interdisciplinary Research.

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”

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Evolving Industry Structures in Biosimilar Development

By Rachel Sachs

Yesterday, I had the privilege to moderate a fantastic event here at the Petrie-Flom Center on Assessing the Viability of FDA’s Biosimilars Pathway.  Bringing together expert panelists from legal practice (Donald R. Ware, Partner, Foley Hoag LLP), industry (Konstantinos Andrikopoulos, Lead IP Counsel, Manufacturing, Biogen, Inc.), and academia (W. Nicholson Price II, Assistant Professor of Law, University of New Hampshire School of Law), the event explored different aspects of the biosimilars issue, considering the guidances issued (and still to be issued) by the FDA, the role of the “patent dance” in biosimilar litigation, and whether Europe’s experience with biosimilars has helpful lessons for our own situation.  For those who weren’t able to make it, video of the event will be posted on the Petrie-Flom Center’s website soon.

But I wanted to write here about one of the very last questions we explored during the panel, because its implications are more far-reaching than we had the time to consider.  The situation is as follows:  In the decades after the Hatch-Waxman Act created a generic pathway for small-molecule drugs, companies typically specialized in developing either innovator or generic drugs, but not both.  And although generic drug companies had great capacity for innovating in manufacturing, they were not research companies in the way that we think about innovator companies.  The situation has changed somewhat over the years, as generic companies began to invest in innovative products, and as innovator companies put out authorized generics, but in general this broad division within industry has persisted.

In the biologic context, by contrast, the biosimilar applications being filed with the FDA are more typically being filed by innovator companies themselves or by subsidiaries thereof.  For instance, the only biologic approved in the United States thus far is marketed by Sandoz, which is part of the innovator company Novartis.  Instead of a situation in which innovators battle generic companies for access to the market, now innovator companies are battling themselves.  There are a host of reasons for this development, most notably including the complex manufacturing processes involved in the biologics space and the need for the development of expertise there.

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Bioethicist Art Caplan: Shkreli Isn’t to Blame For High Drug Prices in U.S.

A new piece by Bill of Health contributor Art Caplan on NBC News:

Should we care about Martin Shkreli, the man I call the “Wolf of Pharma Street”? His hoodie-wearing perp walk sparks outrage, but he is diverting attention from far bigger and more important systemic problems regarding the cost of drugs for all Americans.

Shkreli, the former Turing Pharmaceuticals CEO, has been indicted by the feds for allegedly running a Ponzi scheme to keep his various drug company investments afloat.

Before the feds came calling to charge him with securities fraud, Shkreli had secured the manufacturing license for Daraprim which is used to treat nasty, often fatal protozoal infections in, among others, those with AIDS. Shkreli, grinned, flipped the rest of humanity the bird, and raised the 62 year-old drug’s price by 5,500 percent; from $13.50 to $750 per tablet overnight — thus retiring the “Biggest Jerk in Health Care Award” forever. […]

Read the full article here.

Presidential Campaigns Focus on Drug Costs

By Katherine Kwong

Drug prices have become a hot topic on the presidential campaign trail following recent stories such as the sudden spike in price from $13.50 to $750 for the parasitic infection treatment Daraprim. This story is the latest example of a growing number of complaints about steep increases and high prices for many drugs, including those used to treat multiple sclerosis and cancer, as well as commonly-used generic drugs used to treat everything from high cholesterol to bacterial infections.

In contrast with the Republican presidential candidates, who have generally not supported additional government regulation of drug pricing, Democratic presidential candidates responded to the Daraprim story by urging greater government action to lower drug costs.

Hillary Clinton cited Daraprim as an example when unveiling a proposal to cap drug costs to $250 per month, require pharmaceutical companies to spend a minimum amount on research and development, and allow Medicare to negotiate drug prices. She would also end tax credits for drug advertising to consumers and allow the importation of drugs from other countries.

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Generic Drug Price Increases: Implications for Medicaid

By Rachel Sachs

The internet (not just the health policy part of the internet!) is fascinated by today’s New York Times story about dramatic recent increases in the costs of many decades-old drugs.  The story focuses on the case of Daraprim, the standard of care for treating the parasitic infection toxoplasmosis.  Daraprim was recently acquired by a start-up, which then raised the drug’s price from $13.50 a pill to $750 a pill.  Daraprim has been around for decades, and as the story notes, it’s just one of many recent examples of dramatic price increases for generic drugs, often after their acquisition by other companies (as in this case).

The article raises an enormous number of issues of interest to intellectual property and health policy scholars, both explicitly and implicitly, and other commentators have begun to canvass them.  But I want to spend the rest of this blog post unpacking a single point made in the article, because it actually contains an enormous amount of complexity.  As the author notes, “[the company’s] price increase could bring sales to tens or even hundreds of millions of dollars a year if use remains constant. Medicaid and certain hospitals will be able to get the drug inexpensively under federal rules for discounts and rebates. But private insurers, Medicare and hospitalized patients would have to pay an amount closer to the list price.”

The author is right that there’s one sense in which Medicaid and entities eligible for the 340B program (I assume this is what the author is referring to when he says “certain hospitals”) will be able to obtain this drug “inexpensively” – but there’s another sense in which they won’t be able to.

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Induced Infringement in Patent Law and the Doctor-Patient Relationship

By Rachel Sachs

Regular readers of this blog will recall that I often think and write about the interaction between the induced infringement doctrine in patent law and medical method patents of various kinds (previous blog posts are here and here).  Until the recent en banc decision in Akamai v. Limelight, courts had been extremely reluctant to attribute the actions of multiple parties to a single actor for purposes of assigning infringement liability.  These cases have largely involved business method or software patents, but I had hypothesized in prior work that this analysis would extend to medical method patents, making them difficult to enforce.

Last week, Judge Tanya Walton Pratt of the U.S. District Court for the Southern District of Indiana provided evidence for the opposite proposition.  Eli Lilly had sued a set of generic drug companies for patent infringement, arguing that they had induced physicians to infringe a set of method-of-treatment claims involving a chemotherapy drug.  The problem for Lilly was that its claims require action by both physicians and patients, who must take certain other medications, including folic acid, before the physician administers the chemotherapy drug.  Judge Pratt was tasked with determining whether the actions of the patient in preparing for their chemotherapy could be attributed to the physician.  She ruled that because the physician “directs or controls the patient’s administration of folic acid,” “the performance of all the claimed steps … can be attributed to a single person, i.e. the physician.”  As a result, the generic companies could be held liable for infringement.

One problem with Judge Pratt’s ruling is that it fails to confront the single Federal Circuit opinion to have considered and rejected this argument.  McKesson Technologies, Inc. v. Epic Systems Corporation dealt with a patent on electronic communication between physicians and their patients.  In that case, the Federal Circuit had occasion to consider how the doctor-patient relationship fits into the induced infringement paradigm.  Judge Linn’s opinion concluded that “[a] doctor-patient relationship does not by itself give rise to an agency relationship or impose on patients a contractual obligation such that the voluntary actions of patients can be said to represent the vicarious actions of their doctors,” declining to attribute the patients’ actions to their physicians for purposes of assigning liability.

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Ensuring Timely Approval Of Generic Drugs

By Ameet Sarpatwari and Aaron S. Kesselheim

Cross posted from Health Affairs Blog

Having saved US consumers over $1.5 trillion in the past decade, generic drugs are one of the most cost-effective interventions in our entire health care system. Using generic drugs instead of brand-name drugs, when a generic is available, has been shown to increase medication adherence and improve health outcomes for chronic conditions.

Importantly, generic drugs offer these advantages without sacrificing quality; the Food and Drug Administration’s bioequivalency standards are met and often exceeded by generic-name manufacturers, and no randomized controlled trials—the gold standard of medical evidence—have identified clinically significant variations in outcomes between brand-name and FDA-approved interchangeable generic drugs.

However, to perform the tests the Food and Drug Administration (FDA) requires before approving a generic drug, manufacturers need access to one vital component: the brand-name product. Samples of the brand-name version of a drug can be used as a comparator to demonstrate the similarity of the molecular structure, or even the clinical outcomes from the generic product. Physico-chemical details about the brand-name drug, such as its molecular structure, stability, and cross-reactions, can be even more helpful in ensuring that the generic version adheres to the highest quality standards.

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The People of the State of New York v. Actavis: Making a Hard-Switch Procompetitive

By Ryan Abbott

Actavis is back in the spotlight regarding its allegedly anticompetitive behavior. Last month, the U.S. District Court for the Southern District of New York issued an injunction against Actavis and its subsidiary, Forest Laboratories LLC based on the New York Attorney General’s “product hopping” suit.

The suit concerns Actavis’ attempt to extend monopoly protection for its drug Namenda. Namenda is one of only a few FDA approved drugs to treat Alzheimer’s disease, and the only approved drug in a class of medications that act on the glutamatergic system by blocking NMDA receptors. Namenda is also Actavis’ largest revenue generating drug; it brought in $1.5 billion in sales last year. Unfortunately for Actavis, Namenda’s patent protection is due to expire in 2015. Once the patent protection for Namenda has expired, Actavis should ordinarily expect to see a dramatic reduction in sales revenue, as much as 90% in the first year, as consumers switch to a lower-cost generic version.

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Congressmen Express Concern About Proposed Changes to Generic Drug Labeling Rules

By Bob Bohrer

I have previously posted on pharmaceuticalpolicy.blogspot.com about the FDA’s proposed change to the rules for generic drug labels and an estimate of the liability costs that might be incurred by the generic drug industry as a result of the proposed change.  The Generic Pharmaceutical Manufactuer’s Association lobbying efforts appear to have motivated Congressmen Steve Israel (D-NY) and Timothy Bishop (D-NY) to draft a letter to the FDA requesting changes to the proposed rule.  A copy of the Congressmen’s letter to the FDA can be downloaded through this link.

9/22/14: HLS Health Law Workshop with Thomas McGuire

HLS Health Law Workshop: Thomas McGuire
September 22, 2014 5:00 PM
Griswold Hall, Room 110 (Harvard Law School)
1525 Massachusetts Ave., Cambridge, MA [Map here.]

Download the Paper: Do ‘Reverse Payment’ Settlements of Brand-Generic Patent Disputes in the Pharmaceutical Industry Constitute an Anticompetitve Pay for Delay?

Thomas G. McGuire, PhD, is a professor of health economics in the Department of Health Care Policy at Harvard Medical School. His research focuses on the design and impact of health care payment systems, the economics of health care disparities, and the economics of mental health policy. Dr. McGuire has contributed to the theory of physician, hospital, and health plan payment. His research on health care disparities includes developing approaches to defining and measuring disparities, and study of the theory and measurement of provider discrimination. For more than 30 years, Dr. McGuire has conducted academic and policy research on the economics of mental health.

Bumps on the Road Towards Clinical Trials Data Transparency- A recent U-Turn by the EMA?

By Timo Minssen

In a recent blog I discussed the benefits and potential draw-backs of a new “EU Regulation on clinical trials on medicinal products for human use,” which had been adopted by the European Parliament and Council in April 2014. Parallel to these legislative developments, the drug industry has responded with its own initiatives providing for varying degrees of transparency. But also medical authorities have been very active in developing their transparency policies.

In the US, the FDA proposed new rules which would require disclosure of masked and de-identified patient-level data. In the EU, the EMA organized during 2013 a series of meetings with its five advisory committees to devise a draft policy for proactive publication of and access to clinical-trial data. In June 2013 this process resulted in the publication, of a draft policy document titled “Publication and access to clinical-trial data” (EMA/240810/2013).

Following an invitation for public comments on this document, the EMA received more than 1,000 submissions from stakeholders. Based on these comments the EMA recently proposed “Terms of Use” (TOU) and “Redaction Principles” for clinical trial data disclosure.

In a letter to the EMA’s executive director Dr. Guido Rasi, dated 13 May 2014, the European Ombudsman, Emily O’Reilly, has now expressed concern about what seems to be a substantial shift of policy regarding clinical trial data transparency. Continue reading

#BELHP2014 Panel 3, Behavioral Economics and Health Care Costs

By Nicholson Price

[Ed. Note: On Friday, May 2 and Saturday, May 3, 2014, the Petrie-Flom Center hosted its 2014 annual conference: “Behavioral Economics, Law, and Health Policy.”  This is an installment in our series of live blog posts from the event; video will be available later in the summer on our website.]

Our third panel, moderated by PFC Academic Fellow Matthew Lawrence, addresses the use of behavioral economics techniques to control health care costs.  Speakers are Christopher T. Robertson, Brigitte Madrian, Ameet SarpatwariAnupam Jena, and Jim Hawkins.  (Many projects are co-authored, but I’m only listing the presenters here)

The first speaker is Professor Christopher T. Robertson, coming from Arizona Law but visiting Harvard and the PFC this year, speaking on Cost-Sharing as Choice Architecture.  He starts by talking about the cost side of cost sharing, which we know works in reducing consumption from empirical evidence; from the RAND study, it reduced use without reducing health.  More recent studies also confirm this.  But cost sharing presents four problems:

  1. Underinsurance relative to ability to pay
  2. Indiscriminate reductions in health care (more of an ax than a scalpel)
  3. An unfair tax on sickness (more tentative if we can solve the first two)
  4. The burden of deciding.

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