Full Disclosure for Pharma - Pharmaceutical Executive


Full Disclosure for Pharma

Pharmaceutical Executive

Price transparency

Open Sunshine
An equally important goal of US transparency advocates is to reduce healthcare spending through competition generated by broader disclosure of prices for healthcare services and medical products. The new online "marketplaces" established by Obamacare for consumers to shop for health insurance will feature comparative information on plan premiums, co-pays, and benefits, along with drug formularies and pharmacy coverage policies, to help identify the best deal for an individual on coverage and costs. Plan sponsors will work to sort out the plethora of discounts and rebates that camouflage actual drug charges, particularly the higher co-pays and coinsurance rates on costly "specialty" drugs. Exorbitant prices for new treatments for cancer and other serious conditions are generating demand for information on how specialty pharmacies distribute and dispense these therapies and whether tiered formulary arrangements and pharmacy management systems limit appropriate access or prevent excessive outlays.

Disclosure of information on drug coverage and costs has gained support from a steady supply of reports on pharma pricing issues from federal investigators. One analysis issued in February by the HHS Inspector General found millions in overpayments for drugs covered by Medicare Part B under the current average sales prices reimbursement formula. Another study criticized inadequate conflict-of-interest assessment for members of Medicare drug plan formulary committees, a factor that supposedly could bias committee judgment in drug selection decisions. The Government Accountability Office recently investigated and called for changes in how Medicare pays for drugs used in dialysis treatment.

Consumer advocates and pharma critics maintain that full disclosure of drug prices will lead to much lower costs for patients. Pharma companies counter that such transparency will only boost prices overall, especially for those customers that currently enjoy favorable rebates and discounts. Industry's biggest fear is that some kind of national formulary will lead to reference pricing, higher rebates, and eventually drug price controls.

Social media exposure

Over the long run, though, much information on pharma research and prices will become public with the expansion of global search engines able to tap into millions of queries and postings on medical treatments and healthcare costs. A recent study by scientists at Microsoft Research, Stanford, and Columbia University, published in the Journal of the American Medical Informatics Association (March 6, 2013), found that Internet searches on drug use uncovered previously unrecognized adverse events. Here, queries from six million people in 2010 searching for information on antidepressant Paxil and cholesterol treatment Pravachol disclosed a greater incidence of high blood sugar in patients taking the two drugs.

It's not hard to imagine similar analyses of consumer searches for lower drug prices, product safety reports, and complaints about pharma marketing and advertising from health professionals and the public. The ultimate question is whether such disclosure enhances patient care—or adds to the complexities of innovative research.

Jill Wechsler is Pharm Exec's Washington correspondent. She can be reached at


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