Discovery, development, regulation and marketing of the medications that are used in health care and the economics of the pharmaceutical industry.

Addressing Cost Barriers to Medications: A Survey of Patients Requesting Financial Assistance

Feb. 4, 2015

David Grande, Margaret Lowenstein, Madeleine Tardif, Carolyn Cannuscio

In the American Journal of Managed Care, David Grande and colleagues assess decision-making preferences of patients who face cost-related barriers to care or medication. Specifically, the authors evaluate which health care actors patients trust most to evaluate cost-efficacy tradeoffs and screen for cost barriers using administrative records. The authors conducted a survey of 1,400 patients (adults with a chronic disease seeking financial assistance) who rated a clinical vignette describing how a clinical decision was made in the context of a cost-efficacy tradeoff. Results show that...

Prescription Drug Use under Medicare Part D: A Linear Model of Nonlinear Budget Sets

Feb. 1, 2015

Jason Abaluck, Jonathan Gruber, Ashley Swanson

In a NBER Working Paper, Jason Abaluck (Yale University), Jonathan Gruber (MIT) and LDI’s Ashley Swanson analyze the complicated decision problem faced by Medicare Part D enrollees in their use of prescription drugs. Enrollees must respond to prices that are difficult to find, and that may change as they spend more over time. As in other settings such as income taxation and electricity and cellular telephone markets, these sorts of nonlinear prices make it difficult to estimate behavior, as consumers may not follow rational models of consumption. The authors use Medicare Part D claims data...

The Payer Perspective on Sovaldi

Oct. 2, 2014

Sovaldi, the $84,000 Hepatitis C drug developed by Gilead Sciences, has sparked controversy while marching toward worldwide sales set to exceed $11 billion in 2014. The blockbuster drug’s price is the main sticking point in the debate: critics argue that the cost is unsustainable and will cause payers to restrict treatment for the estimated 3.2 million patients in the United States who live with Hepatitis C, some of whom will develop liver complications.