The Effect of Government Procurement of Pharmaceuticals

我们的项目将研究政府采购处方药的激励措施如何影响制药公司的定价和创新。我们目前的研究集中在医疗补助计划中报销规则的两个潜在影响。第一个是由于向市场的很大一部分（19%）提供保险而对价格水平产生的直接影响。医疗补助为药品支付的价格是私人市场价格的函数;当一家公司向非医疗补助客户提高价格时，它的所有医疗补助销售都将获得更高的价格。医疗补助部分的数量下降是最小的，因为消费者由于全额保险而没有弹性的需求。我们实证调查是否医疗补助报销规则导致公司增加私人市场价格高于他们，否则将是，并找到初步证据表明，这是事实。我们还研究了限制医疗补助产品价格上涨的规则是否会导致制药公司推出新版本的治疗方法。药品价格的增长速度比CPI快得多，医疗补助在处方药销售中的份额在20世纪90年代大幅增加。因此，一家公司可能希望以快于CPI增长的速度提高医疗补助部分的价格，但规则不允许这样做。然而，公司可以推出其药物的新版本（包衣，胶囊，剂量）并以更高的价格推出。我们在20世纪90年代末新产品（NDC）引入的数据集上测试了这一假设，并发现证据表明，当品牌药物对Medicaid有大量销售时，公司确实会引入新产品以应对Medicaid份额。我们将在第一组发现的基础上，通过以下详细说明的各种规格检查来探索我们结果的稳健性，例如，估计我们对仿制药和特定药物的模型，以及医疗补助需求的合理外生增长。我们还将价格与一些与医疗补助完全无关的外部基准进行比较，例如新西兰的药品价格，中央政府的目标是根据药品的健康益处制定价格。如果我们上面描述的激励措施是重要的，我们预计会发现美国和外国价格之间的差异更大，医疗补助市场份额更高。 医疗补助市场的盈利能力增加可能会导致更多的公司对医疗补助接受者不同使用的药物进行研究，从而增加可用药物治疗的数量。 这种创新效应可以在一定程度上（也许完全）抵消私营部门消费者的消费者剩余损失，并可能减少医疗补助部门的公司利润。我们最初的策略是研究1984年和1990年由于联邦补充保障收入（SSI）计划资格的扩大而发生的医疗补助市场份额的巨大和意外增加的影响。不同诊断组之间的SSI增长差异很大，因此某些类别的处方药比其他药物受到的影响更大。然后，我们可以使用来自FDA和其他来源的信息，按药物类别和年份估计临床试验和其他创新措施的数量。确定这一创新效应的大小将使我们能够更全面地评估医疗补助对社会福利的影响。与医疗补助相比，联邦医疗保险计划不提供处方药的保险，尽管这一点将因最近的立法而改变。从2006年1月开始，医疗保险将使其4500万受益人可以选择从受到严格监管的私营公司购买保险。这些公司将有一定的自由裁量权，哪些药物包括在他们的处方集，但不是在一小部分的成本，他们必须支付。有双重资格获得医疗保险和医疗补助的个人将转向这些计划，因此医疗补助在药品市场的份额将下降。虽然“双杀”只占医疗补助受助人的13%，但它们占医疗补助处方药支出的60%。因此，医疗补助市场份额的变化将是巨大的，并且在治疗类别之间和治疗类别内部都将有所不同。我们将利用两个自然实验：医疗补助市场份额的下降和医疗保险参保者保险范围的变化。后一种影响因几个因素而变得复杂--医疗保险接受者可能选择不购买保险，保险范围可能会排挤本来会购买的保险，私人保险公司可能会有激励措施，影响公司为其药品设定的价格。我们的研究将调查这一政策变化对药品价格、创新和其他相关结果变量的影响。上述从公共价格到私人价格的反馈可能部分解释了为什么美国的药品价格相对较高。虽然任何采购方法都有其问题，但我们认为，到目前为止，决策者没有充分注意将公共和私营市场联系起来对私营部门消费者支付的价格的影响。我们的研究结果采取额外的政策意义时，人们认为，政府在这一领域的参与将很快扩大了很多，由于新的医疗保险处方药的好处。了解该计划及其采购结构的影响对于设计控制医疗保健计划支出，保护当前消费者剩余以及允许社会有益创新的政策至关重要。

Our project will examine how the incentives created by government procurement of prescription drugs influence pricing and innovation by pharmaceutical firms. Our current research focuses on two potential effects of the reimbursement rules in the Medicaid program. The first is the direct impact on price levels due to the provision of insurance to a large fraction (19%) of the market. The price Medicaid pays for a pharmaceutical product is a function of private market prices; as a firm raises its price to non-Medicaid customers, it will receive a higher price for all its Medicaid sales. Quantity decline in the Medicaid segment is minimal because consumers have inelastic demand due to full insurance. We empirically investigate whether the Medicaid reimbursement rules lead firms to increase private market prices above what they otherwise would be, and find preliminary evidence that this is the case. We also examine whether a rule limiting price increases on Medicaid products causes pharmaceutical firms to introduce new versions of their treatments. Prices for pharmaceuticals have increased much more rapidly than the CPI, and Medicaid's share of prescription drug sales increased substantially during the 1990s. A firm might therefore want to increase prices to the Medicaid segment faster than growth in the CPI, but the rules disallow this. However, a firm can introduce a new version (coating, capsule, dosage) of its drug and launch it at a higher price. We test this hypothesis on a dataset of new product (NDC) introductions in the late 1990s and find evidence that firms do introduce new products in response to Medicaid share when the branded drug has large sales to Medicaid.We will build on our first set of findings by exploring the robustness of our results with a variety of specification checks detailed below, such as estimating our model on generic drugs and on particular drugs with plausibly exogenous increases in Medicaid demand. We will also compare prices to some external benchmark that is totally unrelated to Medicaid, such as drug prices in New Zealand, where the central government aims to set prices based on the health benefits of the drugs. If the incentives we describe above are important, we expect to find a larger deviation between US and foreign prices for drugs with higher Medicaid market shares. Increased profitability in the Medicaid market may lead more firms to conduct research on drugs used differentially by Medicaid recipients and thus increase the number of available drug treatments. This innovation effect could to some extent (perhaps fully) offset the loss in consumer surplus incurred by private sector consumers and perhaps reduce firm profits from the Medicaid sector. Our initial strategy is to examine the effect of the large and unanticipated increase in the Medicaid market share that occurred in 1984 and 1990 as a result of expansions in eligibility for the federal Supplemental Security Income (SSI) program. The growth in SSIdiffered substantially across diagnosis groups and thus certain categories of prescription drugs were more affected than others. We can then use information from the FDA and other sources to estimate the number of clinical trials and other measures of innovation by drug category and year. Determining the magnitude of this innovation effect will allow us to provide a more comprehensive estimate of the effect of Medicaid on social welfare.In contrast to Medicaid, the federal Medicare program does not provide coverage for prescription drugs, though this is set to change as a result of recent legislation. Beginning in January of 2006, Medicare will give its 45 million beneficiaries the option to purchase insurance from tightly regulated private firms. These firms will have some discretion over which drugs to include in their formularies, though not over the fraction of costs that they must cover. Individuals who are dually eligible for Medicare and Medicaid will shift into these plans and thus Medicaid's share of the drug market will decline. While "dual eligibles" account for just 13% of Medicaid recipients, they account for 60% of Medicaid prescription drug spending. The change in Medicaid's market share will therefore be substantial and will vary both across and within therapeutic categories. We will exploit two natural experiments: the decline in the Medicaid market share and the change in the insurance coverage of Medicare enrollees. This latter effect is complicated by several factors - Medicare recipients may choose not to purchase the insurance, the coverage may crowd out insurance that would otherwise have been purchased, and private insurers may have incentives that affect the prices firms set for their drugs. Our research will investigate the effect of this policy change on pharmaceutical prices, innovation, and other outcome variables of interest.Many have argued that U.S. pays too much for prescription drugs. The feedback from public to private prices described above may partially explain why pharmaceutical prices in the US are relatively high. While any method of procurement has its problems, in our view, up to this point policy makers have not focused sufficient attention on the effect that linking public and private markets has on the prices paid by consumers in the private sector. Our results take on additional policy significance when one considers that government involvement in this sector will soon expand by a great deal due to the new Medicare prescription drug benefit. Understanding theeffects of the program and its procurement structure are extremely important for designing policies that control spending on healthcare programs, protect current consumer surplus, and allow for socially beneficial innovation.