Harvard healthcare economist Michael E. Chernew, PhD, who is co-editor-in-chief of The American Journal of Managed Care®, joins Managed Care Cast for a discussion of how the administration’s proposals draw attention to a fundamental challenge: the need to balance innovation with affordability in drug pricing.
No matter what one thinks of the Trump administration’s plan to rein in drug prices, Harvard healthcare economist Michael E. Chernew, PhD, the co-editor-in-chief of The American Journal of Managed Care® (AJMC®), said its mere presence is a sign that the problem has broken through as a top-tier political issue that won’t go away easily.
Chernew discusses the administration blueprint, American Patients First, for Managed Care Cast, the AJMC® podcast series, which can be accessed here.
The problem of rising drug prices remains unresolved because stakeholders have not reached an agreement on a mechanism to address competing needs: drug prices must be high enough to encourage innovation, but there must be a way to make drugs accessible to those who need them. The centralized government control that some seek—which President Donald Trump rejected—may not work as well as some imagine, Chernew says.
“We are always trying to balance innovation with affordability,” he says. “What I think we are hearing politically in this country is that people want more emphasis on affordability and less emphasis on innovation—or at least people believe they can have more affordability with the same amount of innovation.” Chernew, however, has his doubts.
Overall, Chernew agrees that the plan does go as far as it could have, but elements that promote competition and seek to end abuses of the patent system are important. The decision to forego giving Medicare power to negotiate directly with drug makers is the plan’s most noteworthy feature, given Trump’s promises as a candidate.
“These may be weaker solutions than many would like,” Chernew says. “If it turns out they don’t address the problem effectively, this won’t be the last word on how we are going to deal with high drug prices and high medical spending more broadly.”
Managed Care Cast interviews policy leaders, newsmakers, and authors whose research appears in The American Journal of Managed Care®. For other installments of Managed Care Cast, visit ajmc.com.
About The American Journal of Managed Care®:
The American Journal of Managed Care® (AJMC®) is a peer-reviewed, MEDLINE-indexed journal that keeps readers on the forefront of health policy by publishing research relevant to industry decision makers as they work to promote the efficient delivery of high-quality care. AJMC.com is the essential website for managed care professionals, distributing industry updates daily to leading stakeholders. Other titles in the AJMC® family include The American Journal of Accountable Care®, and two evidence-based series, Evidence-Based Oncology™and Evidence-Based Diabetes Management™. These comprehensive offerings bring together stakeholder views from payers, providers, policymakers and other industry leaders in managed care. To order reprints of articles appearing in AJMC® publications, please contact Jeff Prescott at 609-716-7777, ext. 331.
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