Following up on the FEHBlog's entry last Friday about the new ACA guidance restricting reference pricing (also discussed in this Health Affairs blog entry), the FEHBlog noticed this Kaiser Health News article about a National Institute for Health Care Reform study questioning the utility of reference pricing. The FEHBlog continues to find the idea attractive because it places pressure on health care providers to tow the line.
Another idea that the FEHBlog has advocated is using Medicare's RBRVS as the benchmark for paying out of network providers because after all how can the providers challenge Medicare's schedule when the AMA plays a large role in its construction? Today, a Washington Post columnist hammered on a local health insurer for using the RBRVS as its out of network payment benchmark. Of course the real problem is created by providers who don't participate in provider networks. It's unfortunate that Congress in the ACA did not require doctors to publicize the networks in which they participate similar to the summary of benefits and coverage obligation that the law imposes on insurers.
Finally, the Washington Post reports that on Friday the Food and Drug Administration approved a new Gilead Sciences pill dubbed Harvoni to treat Hepatitis C that combines its blockbuster drug Sovaldi with two related drugs that form the complete treatment. Gilead plans to charge $94,500 for a 12 week course of treatment. The Wall Street Journal provides some additional background:
Harvoni’s price is comparable to the cost of the Sovaldi regimen, and is less than the roughly $150,000 paid for an unapproved combination of Sovaldi and a Johnson & Johnson JNJ -0.83% pill called Olysio that many patients have been taking this year, according to Gregg Alton, a Gilead executive.
Also, Mr. Alton said Harvoni will cost a third less--$63,000—for patients requiring eight weeks of treatment. Gilead estimates that about 35% to 40% of hepatitis C patients fall into this category, because their infections haven’t progressed far enough to scar the liver.
Insurers could “look at using the eight-week regimen more proactively as a way to reduce cost” long term because they wouldn’t have to pay for more longer and more expensive drug therapy later or for even costlier liver transplants after that, Mr. Alton said.
Yet insurers are counting on competition from other drug companies to reduce their costs. AbbVie Inc. ABBV -2.36% says the U.S. Food and Drug Administration is scheduled to decide on approving its new treatment before the end of the year.