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Prescription Drug Supply Chains: An Overview of Stakeholders and Relationships
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Year: 2021 Publisher: Santa Monica, Calif. RAND Corporation

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The authors describe the stakeholders involved in prescription drug supply chains and the flows of products, payments, and information between stakeholders. Many stakeholders and steps are involved in the life cycle of a prescription drug as it moves from chemical synthesis and formulation through dispensing or administration to patients. The specific steps involved in prescription drug supply chains often differ depending on the type of drug, the channel of distribution, and the patient's source of prescription drug coverage. Although the authors present a typical supply chain for retail pharmacy drugs, they also highlight the important supply chain distinctions for specific distribution channels and for specific types of drugs. Disparate sources exist describing each component of the supply chain, but, to the authors' knowledge, this report is the first to compile them to facilitate understanding of their interdependence and complexity. The typical stakeholders, relationships, and financial incentives in prescription drug supply chains vary depending on the characteristics of a drug and how it reaches patients. Even within a specific type of drug and a particular distribution channel, differences in business practices complicate a universal description of drug supply chains. There are four common core components of drug supply chains: manufacturing, distribution, coverage and payment, and prescribing and demand. Although prescription drugs are generally available to dispense when prescribed in the United States, there are important exceptions that warrant further investigation. The ability of policymakers to identify, assess, and respond to shortages and disruptions in supply chains is hampered by incomplete data.

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Toward a sustainable blood supply in the United States : an analysis of the current system and alternatives for the future

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Comparing Insulin Prices in the United States to Other Countries: Results from a Price Index Analysis
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Year: 2020 Publisher: Santa Monica, Calif. RAND Corporation

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Insulin prices have increased dramatically over the past decade in the United States. In this report, the authors compare international prices for insulins using a price index approach. They describe the shares of volume and sales for all insulins and different categories of insulin (including insulin type and timing characteristics) in the United States and 32 comparison Organisation for Economic Co-operation and Development (OECD) countries in 2018. For the market basket of insulins sold in both the United States and comparison countries, the authors report ratios of U.S. insulin prices to insulin prices in other countries. They found that manufacturer prices in the United States were considerably higher (often five to ten times higher) than those in other OECD countries for all insulins combined and for different types of insulin. Although the authors focused their analysis on manufacturer prices rather than on net prices after potential rebates, the analysis suggests that U.S. insulin prices would still have been considerably higher — about four times higher — than those in other countries even when accounting for potential rebates.

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Pharmaceutical Pricing in Emerging Markets : Effects of Income, Competition and Procurement
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Year: 2011 Publisher: Cambridge, Mass. National Bureau of Economic Research

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This paper analyzes determinants of ex-manufacturer prices for originator and generic drugs across a large sample of countries. We focus on drugs to treat HIV/AIDS, TB and malaria in middle and low income countries (MLICs), with robustness checks to other therapeutic categories and other countries. We examine effects of per capita income, income dispersion, number and type of therapeutic and generic competitors, and whether the drugs are sold to retail pharmacies vs. tendered procurement by NGOs. The cross-national income elasticity of prices is 0.4 across high and low income countries, but is only 0.15 between MLICs, implying that drugs are least affordable relative to income in the lowest income countries. Within-country income inequality contributes to relatively high prices in MLICs. Number of therapeutic and generic competitors only weakly affects prices to retail pharmacies, plausibly because uncertain quality leads to competition on brand rather than price. Tendered procurement attracts multi-national generic suppliers and significantly reduces prices for originators and generics, compared to prices to retail pharmacies.


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Balancing Access and Cost Control in the TRICARE Prescription Drug Benefit
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Year: 2021 Publisher: Santa Monica, Calif. RAND Corporation

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The Military Health System provides health coverage — including prescription drug benefits — through the TRICARE program, which served an estimated 9.5 million beneficiaries in fiscal year 2018. Like commercial insurance and other sources of drug coverage, TRICARE uses formularies and other policies and tools to strike a balance between access to prescription drugs — in terms of which drugs are covered and where enrollees can receive drugs — and spending. Spending on prescription drugs typically increases as drug access becomes more generous. Unlike other sources of prescription drug coverage, TRICARE must also balance direct acquisition and distribution of drugs via military treatment facilities and mail-order pharmacies with payment for drugs dispensed in retail pharmacies. This report describes the TRICARE pharmacy benefit and the trade-offs in TRICARE pharmacy policies between increasing access and controlling costs. It presents six approaches that TRICARE should explore further to improve access, control costs, or both, including a more selective formulary, narrower pharmacy networks, and further harmonization with other federal purchasers, such as the Veterans Health Administration (VHA). These approaches are worth exploring in light of the recompetition of the TRICARE pharmacy contract and the ongoing consolidation of authority and management for purchased care under the Defense Health Agency.

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Claims-Based Reporting of Post-Operative Visits for Procedures with 10- or 90-Day Global Periods: Final Report
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Year: 2021 Publisher: Santa Monica, Calif. RAND Corporation

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This report was initially published in 2019; this update was published in 2021 and includes clarification on RAND's definition of clean procedures. Medicare payment for most surgical procedures covers both the procedure and post-operative visits occurring within a global period of either ten or 90 days following the procedure. There have been concerns that fewer post-operative visits are provided than the number of post-operative visits considered when the procedure was valued. To help inform accurate valuation of procedures with global periods, Medicare required select practitioners to report on their post-operative visits beginning July 1, 2017. Medicare fee-for-service claims data from practitioners who billed Medicare for select procedure codes between July 1, 2017, and June 30, 2018, in the nine states where practitioners were required to report post-operative visits were analyzed. To correctly link a given procedure and post-operative visit(s), analyses were limited to procedures that did not occur within the global period of another procedure with a 10- or 90-day global period. There were 1.4 million procedures linked to 931,640 post-operative visits. The share of procedures with one or more associated post-operative visits reported was 3.7 percent for procedures with 10-day global periods and 70.9 percent for procedures with 90-day global periods. The ratios of observed to expected post-operative visits provided for procedures with 10- and 90-day global periods were 0.04 and 0.39, respectively. The low proportion of expected post-operative visits provided suggests the need to revalue procedures with a global period.

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Specialty payment model opportunities and assessment
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ISBN: 9780833090218 0833090216 Year: 2015 Publisher: Santa Monica, Calif. RAND Corporation

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Health sector reform in the Kurdistan region, Iraq : financing reform, primary care, and patient safety
Authors: --- --- --- --- --- et al.
Year: 2014 Publisher: Santa Monica : RAND Health,

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In 2010, the Kurdistan Regional Government asked the RAND Corporation to help guide reform of the health care system in the Kurdistan Region of Iraq. The overarching goal of reform was to help establish a health system that would provide high-quality services efficiently to everyone to prevent, treat, and manage physical and mental illnesses and injuries. This report summarizes the second phase of RAND's work, when researchers analyzed three distinct but intertwined health policy issue areas: development of financing policy, implementation of early primary care recommendations, and evaluation of quality and patient safety. For health financing, the researchers reviewed the relevant literature, explored the issue in discussions with key stakeholders, developed and assessed various policy options, and developed plans or approaches to overcome barriers and achieve stated policy objectives. In the area of primary care, they developed and helped to implement a new management information system. In the area of quality and patient safety, they reviewed relevant literature, discussed issues and options with health leaders, and recommended an approach toward incremental implementation.


Book
Pharmaceutical Pricing in Emerging Markets : Effects of Income, Competition and Procurement
Authors: --- --- ---
Year: 2011 Publisher: Cambridge, Mass. National Bureau of Economic Research

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Abstract

This paper analyzes determinants of ex-manufacturer prices for originator and generic drugs across a large sample of countries. We focus on drugs to treat HIV/AIDS, TB and malaria in middle and low income countries (MLICs), with robustness checks to other therapeutic categories and other countries. We examine effects of per capita income, income dispersion, number and type of therapeutic and generic competitors, and whether the drugs are sold to retail pharmacies vs. tendered procurement by NGOs. The cross-national income elasticity of prices is 0.4 across high and low income countries, but is only 0.15 between MLICs, implying that drugs are least affordable relative to income in the lowest income countries. Within-country income inequality contributes to relatively high prices in MLICs. Number of therapeutic and generic competitors only weakly affects prices to retail pharmacies, plausibly because uncertain quality leads to competition on brand rather than price. Tendered procurement attracts multi-national generic suppliers and significantly reduces prices for originators and generics, compared to prices to retail pharmacies.

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Book
International Prescription Drug Price Comparisons: Current Empirical Estimates and Comparisons with Previous Studies
Authors: --- --- --- --- --- et al.
Year: 2021 Publisher: Santa Monica, Calif. RAND Corporation

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The United States spends more on prescription drugs on a per capita basis than most other countries do. Understanding the extent to which drug prices are higher in the United States than in other countries—after accounting for differences in the volume and mix of drugs—is useful when developing and targeting policies to address both growth in drug spending and the financial impact of prescription drugs on consumers. Although several prior studies systematically compare drug prices in the United States with those in other countries, the most recent of these studies used data that are almost a decade old. This report summarizes findings related to international prescription drug price comparisons presented in prior studies and presents new price comparisons that are based on 2018 data—both overall results and narrower analyses on specific categories of drugs, such as brand-name originator drugs, unbranded generic drugs, biologics, and nonbiologic drugs. The report also presents results from sensitivity analyses using different methodological steps and assumptions, such as prices and volume aggregated at different levels and volume weights calculated in different ways. The findings indicate that 2018 drug prices in the United States were substantially higher than those in each of 32 comparison countries when considering all drugs together. Compared with all comparison countries combined, U.S. prices were 256 percent of those in other countries. Prices remained substantially higher than prices in other countries—but with a smaller difference than in our main results—when we adjusted U.S. prices downward based on published estimates of the relative differences between manufacturer and net prices for drugs. U.S. prices for most subsets of drugs, and particularly brand-name originator drugs, were higher than those in comparison countries. The one exception was unbranded generic drugs, for which U.S. prices were on average 84 percent of those in other countries.

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