The cost of cost-sharing

February 10, 2021
A new report tells us how increases in cost-sharing can lead to an increase in mortality—another reminder of why we need real Medicare Part D reform. And following yesterday's House hearing on climate policy, we look at BIO’s recommendations for how to tackle climate…
BIO

A new report tells us how increases in cost-sharing can lead to an increase in mortality—another reminder of why we need real Medicare Part D reform. And following yesterday's House hearing on climate policy, we look at BIO’s recommendations for how to tackle climate change and build resilience. (950 words, 9 minutes, 45 seconds)

 

The cost of cost-sharing

 
 

The National Bureau of Economic Research (NBER) released a working paper detailing how increases in patient cost-sharing can decrease medication usage—and increase mortality.

“As insurers place more emphasis on cost-sharing via deductibles, coinsurance, and copayments, patients pay more out-of-pocket for health care,” says NBER’s new paper, The Health Costs of Cost-Sharing.

The key finding: “small increases in cost cause patients to cut back on drugs with large benefits, ultimately causing their death.” 

“Cutbacks are widespread,” explain the authors—“but most striking are those seen in patients with the greatest treatable health risks, in whom they are likely to be particularly destructive.” 

An increase of 33.6% in out-of-pocket price ($10.40 per drug) causes a 22.6% drop in total drug consumption and a 32.7% increase in monthly mortality, finds the report.

“[W]e trace this mortality effect to cutbacks in life-saving medicines like statins and antihypertensives, for which clinical trials show large mortality benefits,” continue the authors. “[T]hose at the highest risk of heart attack and stroke, who would benefit the most from statins and antihypertensives, cut back more on these drugs than lower risk patients.”

The report's conclusion: “cost-sharing schemes should be evaluated based on their overall impact on welfare, which can be very different from the price elasticity of demand.” 

BIO's conclusion: we need systemic and bipartisan reforms that address legitimate concerns about U.S. health insurance and delivery. BIO has been advocating for an out-of-pocket cap in Medicare Part D as well as zero cost-sharing for COVID-19 vaccines, treatments, and diagnostics, but it's clear that larger systemic reforms are needed, as well

Listen: BIO’s Deputy General Counsel John Murphy and Alliance for Aging Research President and CEO Sue Peschin recently joined the I AM BIO Podcast to discuss drug pricing policy proposals and how we can lower patients’ out-of-pocket costs. Listen at www.bio.org/podcast or wherever you get your podcast fix, including AppleGoogle, or Spotify

 

More Health Care News:

The New York Times: FDA authorizes another antibody treatment
“The approval of the treatment, which is manufactured by the drug maker Eli Lilly, gives doctors another option for patients with COVID-19 who are not sick enough to be hospitalized but are at high risk of becoming seriously ill.”

STAT News (Opinion): The Biden administration needs to look beyond ICER for evaluating drug therapies
“[P]atients may never receive a new, potentially life-changing therapy because it is rated by a biased review board as not having any ‘quantifiable benefit’ based on its price tag alone rather than the potentially life-changing impact that it could have for patients.” 

 
 
 
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BIO Celebrates Black History Month

Today we highlight a Black woman who broke more than one barrier: Katherine Johnson, the NASA mathematician who calculated critical equations for the United States’ first human spaceflights. 

After graduating from West Virginia State College with honors in mathematics, she was “handpicked to be one of three black students to integrate West Virginia’s graduate schools,” says NASA.

Johnson joined the National Advisory Committee for Aeronautics (NACA), which would become the National Aeronautics and Space Administration (NASA). In 1961, she provided key trajectory analysis for America’s first human spaceflight, and in 1962, the “orbital equations that would control the trajectory of the capsule in [John] Glenn’s Friendship 7 mission from liftoff to splashdown,” NASA explains. She worked on several historic missions until her retirement in 1986. 

Johnson passed away in February 2020, at the age of 101. She was brilliantly portrayed by Taraji P. Henson in the Academy Award-nominated film, “Hidden Figures.”

 

How science and innovation can help us meet our climate commitments

 
 

Yesterday, the House Energy & Commerce Subcommittee on Environment and Climate Change held a hearing, “Back in Action: Restoring Federal Climate Leadership.” Here are BIO’s recommendations for how to get there. 

“Reducing emissions from all sectors of the economy is critical to delivering effective and long-lasting climate action, and federal policies are needed to enable that action,” said the hearing announcement.

“To meet climate change commitments, it is crucial to lead with science and U.S. innovation,” BIO said in a statement submitted for the record. “We must incentivize the adoption of innovative and sustainable technologies and practices and streamline and expedite regulatory pathways for breakthrough technology solutions.”

“BIO supports legislative action on climate change that catalyzes resilient and sustainable biobased economies,” the statement continued.

As outlined in BIO’s 100 Days of Innovation blueprint, specific recommendations include:

  • Developing streamlined and expedited regulatory pathways for breakthrough technology solutions.
  • Expanding support for scale-up of biorefineries and biobased manufacturing.
  • Incentivizing adoption of sustainable agricultural practices and low-carbon fuels.
  • Enforcing requirements that federal agencies should be purchasing biobased products.

 

More Agriculture and Environment News:

Bloomberg Green: Fossil fuel pollution kills 8.7 million a year, twice previous estimate
“That's double the previous high-end estimate of fine-particle pollution mortality, and three times the combined number killed by HIV/AIDS, tuberculosis, and malaria in 2018.” 

LanzaTech: British Airways fuels its future with second sustainable aviation fuel partnership
“British Airways is investing in sustainable aviation fuel (SAF) technology provider and SAF producer LanzaJet as the company builds its first commercial scale plant in Georgia, USA. LanzaJet was launched in June 2020 and is a spin-off from leading biotech company LanzaTech.” 

Verywell Health: How scientists are engineering allergy-free wheat and peanuts
“To decrease the number of allergens in foods like wheat and peanuts, scientists are genetically modifying the genetic code that creates allergenic proteins.”

 
 
 
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President Biden’s Wednesday: Meeting with the Secretary of Defense and Defense department personnel. The COVID-19 Response Team will hold a briefing at 11 AM ET. STAT News looks at the top contenders to lead FDA

What’s Happening on Capitol Hill: The Senate Budget Committee will hold a hearing on Neera Tanden, the nominee for director of the Office of Management and Budget (OMB). The impeachment trial continues in the afternoon. House committees continue work on COVID-19 relief, including what POLITICO calls the House Energy and Commerce Democrats' "sweeping package." 

 
 
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