The drug problem: balancing pricing, affordability and innovation

Peter B. Bach, MD, MAPPMemorial Sloan Kettering Cancer Center

bachp@mskcc.org@peterbachmd

RecentProjects

• Indication Specific Pricing

• Medicare Part B Payment 

Pilot

• Tracking of Recent Pricing 

Trends

• R&D Premiums

• Outcomes‐based contracting 

vs value‐based pricing

• Gilead Buy‐Out

www.drugpricinglab.org

RecentProjects

• Gilead Buy‐Out

• Copay assistance

• Louisiana budget allocator

• DPL Policy Tracker

www.drugpricinglab.org

Drivers:Newdrugpricesrising

Why?Olddrugpricesrising

Sodium nitroprusside Acetaminophen Isoproterenol Naproxen

Why?Olddrugpricesrising

Dasatinib Abiraterone acetate Lenalidomide

Why?Olddrugpricesrising

Imatinib

Erin Trish et al. Health Aff 2016;35:1564-1571©2016 by Project HOPE - The People-to-People Health Foundation, Inc.

Spendingblowingupactuarialstructuresofinsuranceproducts

Andmorecostforinsurers:Medicare

Erosionofinsurance

http://blogs.wsj.com/washwire/2016/06/30/the-next-big-debate-in-health-care/?utm_content=bufferbcd65&utm_medium=social&utm_source=plus.google.com&utm_campaign=buffer

Greaterexposuretopricesiscoming

% patients exposed to >1/3 of drug’s actual cost:

2014: 37% of plans

2016: 63% of plans

Large Employers Exchange Plans

Today’s‘value’isquestionable

Today’svalueisshrinking

Access SpendingAccessdeclining