The fallout over EpiPen pricing continues. On Monday, a group of U.S. senators challenged the pharmaceutical company Mylan, which owns the device, to refund $50 million to the Department of Defense. The move followed a Reuters report that the Pentagon’s spending on the EpiPen rose from $9 million in 2008 to $57 million over the past year as a result of price hikes, volume, and lower rebates from Mylan.
Vinod Sahney, University Distinguished Professor in the Department of Mechanical and Industrial Engineering, could help ensure such controversies don’t occur in the future. Sahney has been appointed by the National Academies of Sciences, Engineering, and Medicine to a select committee charged with examining patient access to affordable, effective therapies with an emphasis on drug pricing and the role of insurance in healthcare.
The project, called Ensuring Patient Access to Affordable Drug Therapies, brings together 16 thought leaders from diverse backgrounds, including the military, academia, medicine, Congress, state health departments, and the National Institutes of Health, as well as former executives from the pharmaceutical industry. Sahney, who served as senior vice president and chief strategy officer of Blue Cross Blue Shield of Massachusetts before coming to Northeastern, will bring his expertise in systems science as well as insurance company operations to the project.
“The key issue we will be examining is how to make drugs more affordable and accessible, including whether drug companies’ pricing policies are reasonable as they relate to cost increases for the consumer,” says Sahney. Consider the EpiPen, he says. “Are the huge price increases justified, or are they just what the market will bear?”
It’s important to ensure that everyone has access to affordable drugs, whether the drug is in high demand for, say, chronic conditions, or used by only small numbers of people.
— Vinod Sahney, University Distinguished Professor
Over its 15-month tenure, the committee will also investigate how other developed countries, such as Canada, Germany, and Sweden, control healthcare costs in general and drug costs, which make up some 15 percent of those overall costs, in particular.
“If our price for a certain drug goes up 10 percent but the same drug in Canada goes up only 5 percent, we want to understand why,” says Sahney. “Are the charges for advertising? For new drug development? What can we learn from the practices of other countries?”
Access for all
In addition to pricing the members will concentrate on access, in general and for the poor, evaluating available drug discount programs such as 340B. “This is why a systems perspective is so important,” says Sahney, who for 25 years was senior vice president of the Henry Ford Health System, a healthcare and medical services provider headquartered in Detroit. “For example, you might suggest a policy that would lower a drug’s cost but at the same time limit its access or curtail new drug development. You need to be able to take all elements of the system into consideration.”
Outside experts in economics, data analytics, and other areas will inform the discussions. The committee will then draft a report that will be reviewed by an independent panel. The aim is to release a finished product online to the public, members of Congress, and policy makers by the fall of 2017.
“We want to look at the issue from all sides,” says Sahney. His position as senior fellow at the Institute for Health Care Improvement and adjunct professor of health policy and management at the Harvard T.H. Chan School of Public Health have contributed to his ability to do just that. “It’s important to ensure that everyone has access to affordable drugs, whether the drug is in high demand for, say, chronic conditions, or used by only small numbers of people,” he says.
However, pharmaceutical companies might balk at putting significant resources into developing drugs in the latter case, as they might not be able to recover their costs, which could limit development of important therapies in the future. In response, Sahney raises the question: “What kind of policies should be in place to ensure that the government will help subsidize their development?”