Price, costs, value, and rules: An opinionated take on NEJM highlights for August 2017

At last, drug prices influence physician usage patterns

Association of Reference Pricing with Drug Selection and Spending (subscriber access); Nitroprusside and Isoproterenol Use after Major Price Increases (free access)

Not that long ago, the share of mind US physicians devoted to the cost of the drugs they prescribe was essentially zilch. Thankfully, times have changed as demonstrated in two interesting papers that describe natural experiments. The first compared trends in prescribing patterns at a payer that instituted reference pricing in 2013 vs. one that did not (reference pricing means that for each drug class, the payer will limit reimbursement to a (lower-cost) reference drug in the class); there was a decrease in average per member drug costs of 14% for the payer that made the change, while costs remained stable for the other payer.  The second paper looked at what happened when two old (well out of patent exclusivity) IV drugs typically used in the ICU for severely sick patients saw their price increase suddenly 30-70x because a manufacturer cornered the market; in both usage decreased substantially (~40%) with practitioners choosing alternatives.  If one sets aside the monopolistic pricing of old drugs which serves no social good, it is encouraging that after a near total insulation from costs (which drives waste and eventually is reflected in higher insurance premiums), the system is responding to price signals in a way that leads to more rational decision making. And given that the average physician is probably still not spending much time thinking about drug costs, it is likely in large part thanks to built-in electronic reminders in the EHR that such results have been achieved. Now if we could only achieve the same with the rest of medical interventions…


Benefits and costs from intensive control of blood pressure

Unless you are in an ICU, low blood pressure is good for you, with 120 mmHg (intensive target) better than 140 mmHg (standard target). But how much better at what cost? A sophisticated analysis based on simulations answers these questions; somewhere between $30,000 and $50,000 per Quality Adjusted Life Year (QALYs) gained (a main variable is length of adherence to treatment).  But aside from the import of this result for blood pressure control goals, two broader points come to mind. First, a paper like that ought to put its simulator online with adjustable parameters for people to play with. As it is, an enormous piece of work will be used only to a fraction of its potential. Second, we really need a dedicated high-level programming environment for these kind of calculations. No doubt several groups are reinventing similar methods across the globe for all sorts of conditions. Cost-Effectiveness of Intensive versus Standard Blood-Pressure Control (subscriber access)


A first NEJM piece from the new FDA commissioner

FDA commissioners frequently write position papers for the NEJM. The first such installment from the new commissioner, Scott Gottlieb, announces the intentions of the FDA to develop an evidence-based framework to regulate nicotine content in combustible cigarettes with a goal to reduce the addictiveness of the product.  Putting it succinctly, the commissioner highlights that while the vast majority (if not all) of the adverse health effects of smoking come from non-nicotine ingredients, it is the nicotine that drives the addiction. To my eyes, this and the use of the term “combustible cigarettes” likely indicates a sympathetic view to alternative delivery modes (e.g. e-cigarettes), an approach to harm reduction from smoking that has generated passionate debate. A Nicotine-Focused Framework for Public Health (free access)


The New England Journal of Medicine is a premier weekly medical journal covering many topics of interest to the health sector. In this monthly series we offer an opinionated perspective on selected highlights that might be of interest to our clients and others.

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