The Effect of Government Procurement of Pharmaceuticals

我们的项目将研究政府采购处方药所产生的激励如何影响制药公司的定价和创新。我们目前的研究重点是医疗补助计划中报销规则的两个潜在影响。首先是向很大一部分(19%)市场提供保险对价格水平的直接影响。医疗补助为药品支付的价格是私人市场价格的函数；当一家公司提高对非医疗补助客户的价格时，它将获得更高的医疗补助销售价格。医疗补助部分的数量降幅很小，因为由于全额保险，消费者的需求缺乏弹性。我们实证调查了医疗补助报销规则是否导致公司将私人市场价格提高到高于否则的水平，并发现了初步证据表明情况确实如此。我们还研究了限制医疗补助产品价格上涨的规定是否会导致制药公司推出新版本的治疗方法。药品价格的上涨速度比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，一家公司可能希望提高医疗补助部分的价格，速度快于CPI的增长，但规则不允许这样做。然而，公司可以推出新版本的药物(包衣、胶囊、剂量)，并以更高的价格推出。我们在20世纪90年代末推出的新产品(NDC)的数据集上测试了这一假设，并发现有证据表明，当品牌药物对Medicaid的销量较大时，公司确实会推出新产品以响应Medicaid份额。我们将基于第一组发现，通过以下详细说明的各种规格检查来探索结果的稳健性，例如估计我们关于仿制药和特定药物的模型，这些药物似乎具有看似外源性的医疗补助需求增长。我们还将把价格与一些与医疗补助完全无关的外部基准进行比较，比如新西兰的药品价格，新西兰中央政府的目标是根据药品对健康的好处来制定价格。如果我们上面描述的激励措施很重要，我们预计会发现，对于医疗补助市场份额较高的药品，美国和外国的价格之间会有更大的偏差。医疗补助市场盈利能力的提高可能会导致更多的公司对医疗补助接受者使用的不同药物进行研究，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(可能完全)抵消私营部门消费者产生的消费者盈余的损失，并可能减少医疗补助部门的企业利润。我们最初的战略是研究1984年和1990年由于联邦补充保障收入(SSI)计划资格扩大而导致的医疗补助市场份额大幅和意想不到的增长的影响。SSI的增长在不同的诊断群体中差异很大，因此某些类别的处方药受到的影响比其他类别的更大。然后，我们可以使用FDA和其他来源的信息来按药物类别和年份估计临床试验和其他创新措施的数量。确定这种创新效应的大小将使我们能够更全面地估计医疗补助对社会福利的影响。与医疗补助不同，联邦医疗保险计划不包括处方药，尽管这种情况将因最近的立法而发生变化。从2006年1月开始，联邦医疗保险将允许4500万受益人选择从受到严格监管的私营公司购买保险。这些公司将在将哪些药物纳入他们的处方中方面拥有一定的自由裁量权，尽管不会涉及他们必须覆盖的部分成本。同时有资格享受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会下降。虽然“双重资格”只占医疗补助受助人的13%，但他们却占到医疗补助处方药支出的60%。因此，医疗补助的市场份额的变化将是巨大的，并且在不同的治疗类别和治疗类别内都会有所不同。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人保险覆盖面的变化。后一种影响因几个因素而变得复杂--联邦医疗保险接受者可能选择不购买保险，保险覆盖范围可能会排挤原本会购买的保险，私营保险公司可能会有影响公司为其药品设定的价格的激励措施。我们的研究将调查这一政策变化对药品价格、创新和其他利益结果变量的影响。许多人认为美国为处方药支付的费用太高。上述从公共价格到私人价格的反馈可能在一定程度上解释了为什么美国的药品价格相对较高。尽管任何采购方法都有其问题，但我们认为，到目前为止，政策制定者还没有充分注意到将公共市场和私人市场联系起来对私营部门消费者支付的价格的影响。当人们考虑到由于新的医疗保险处方药福利，政府在这一领域的参与将很快大幅扩大时，我们的结果具有额外的政策意义。了解该计划及其采购结构的影响，对于设计控制医疗计划支出、保护当前消费者剩余并允许进行有益于社会的创新的政策极其重要。

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.