Reference based pricing for pharmaceuticals. Podcast with ActiveRADAR CEO David Henka

David Henka, President & CEO of ActiveRADAR

Pharmacy Benefit Managers (PBMs) claim to keep drug costs under control, but their convoluted business models and tactics don’t always result in the best deal for employers. Reference based drug pricing is an interesting alternative approach. It’s used for drug cost control in other parts of the world and within the US for things like elective surgery.

“Rebates are like crack cocaine…”

In this podcast interview, drug pricing expert David Henka sheds light on the drug pricing world and describes the reference based approach employed by ActiveRADAR, where he is CEO.

Here’s what we discussed:

  • (0:17) How can we understand the recent dust-up between President Trump and Pfizer’s CEO? What provoked it?
  • (1:00) Why does Pfizer want to see the “blueprint” unveiled —isn’t that supposed to squeeze the drug companies?
  • (2:47) Say more about your “balanced billing” analogy.
  • (4:21) So is Europe like Medicaid, developing countries the uninsured, and the US a commercial payer?
  • (4:59) Isn’t freeloading just good negotiating?
  • (7:23) What about someone like Martin Skrelli, who said just push prices to their logical conclusion: instead of 10% why not 100 or 1000%?
  • (8:52) You mentioned the typical consumer is fairly protected due to fixed deductibles or co-pays. What is the role of PBMs in drug pricing?
  • (11:07)  Would eliminating rebates really drive down costs?
  • (13:37) What other techniques are PBMs using?
  • (15:45) ActiveRADAR is involved in reference pricing. What is it? What implications does it have for PBMs? Are their days numbered?
  • (21:54) Historically generics have helped keep prices under control. How is that working out now? How should we think about “generics” or “similars” for biotech products?

By healthcare business consultant David E. Williams, president of Health Business Group.

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