Health Business Blog

Health care business consultant and policy expert David E. Williams share his views

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.

#CareTalk August 2018: What does Google see in Oscar?

In the latest edition of #CareTalk, CareCentrix CEO John Driscoll and I banter about several trending healthcare stories: Google’s investment in Oscar Health, younger physicians’ embrace of single payer, drug pricing, and new approaches to opioids.

Don’t miss the lightning round, where we tackle some Congressional corruption, IBM Watson, home health aides and our summer movie picks.

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

John McCain and health care: conventional conservative views with a couple of interesting twists

Senator McCain, we will miss you

I mourn with the nation on the loss of Senator John McCain, an American patriot and public servant. Plenty of retrospectives are appearing on McCain just now; naturally I’ll focus mine on healthcare.

Back in 2008 I profiled the major candidates on healthcare policy, comparing Obama to McCain and calling out my favorite on each main area. In three posts, I examined the candidates’ positions on individual and employer mandates, expansion of public programspremium subsidies and tax law changes.

McCain never really made healthcare a centerpiece of his campaign, and I don’t think he was especially passionate about it. The policies he put forward were fairly mainstream GOP ideas of the day –modest in scope and likely to be modest in impact as well. He opposed an individual or employer mandate to purchase health insurance, and took no position on the expansion or cutback of government healthcare programs like Medicare and Medicaid. He was in favor of allowing veterans to use their VA benefits in the name of obtaining convenient, high quality care outside the VA system.

McCain proposed modest tax credits, and even some extra boost for people with pre-existing conditions. The math never added up on these and the impact would not have been great.

John McCain’s most radical proposal is one I generally agree with: eliminating the tax deductibility of employer-sponsored health insurance. McCain would have taxed these benefits as income, which they are. If implemented as proposed, this provision could have driven down the availability of employer sponsored health insurance without replacing it with anything; that would not have been a great outcome. More likely, a compromise version would have passed, essentially placing a cap on deductibility without scaring employers away from offering coverage.

This policy is not so dissimilar from the so-called Cadillac tax in the Affordable Care Act, which is hated by just about everyone. Nonetheless it’s good policy because it puts the brakes on insurance costs and encourages employees to value their benefits rather than take them for granted.

Looking back on these posts a decade later, it’s also interesting to see how pragmatic Obama’s proposals were. For example, Obama focused his attention on universal coverage for children, encouraging businesses to offer health insurance to their employees. He also called for creation of a public plan modeled on the Federal Employee Health Benefits Plan, to help individuals that couldn’t find good plans elsewhere.

Rest in peace, Senator McCain.

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

Off your walker? Foray’s founder Dr. Kavanagh takes a new approach to an old need (podcast)

What’s worse than needing help with gait, mobility and balance? Being told you need a walker. No wonder, when the typical walker basically screams “frail elderly,” and is difficult to use as well.

Neurologist Patricia Kavanagh was struggling to get her patients with Parkinson’s and other movement disorders to use a walker.  So she teamed up with a design and production team to found Foray and create the Spring, a modern device that is more functional and stylish.

In this podcast interview we discuss:

  • (0:13) Dr. Kavanagh’s clinical practice and the types of patients she treats
  • (1:19) Key challenges she faces working with patients with movement disorders
  • (3:24) Problems with current assistive devices like canes and walkers
  • (6:11)  Whether walkers are unique in their poor design
  • (7:26) The story behind the birth of Foray and the development of the Spring
  • (8:42) The target audience
  • (12:04) Price point for the new device
  • (12:50) The thinking behind the branding of Spring and Foray
  • (13:31) Potential line extensions
  • (15:20) Impact of burden of chronic disease on mobility and exercise tolerance

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