Peter B. Bach
Department of Epidemiology and Biostatistics
Department of Medicine
Memorial Sloan Kettering Cancer Center
New York, NY 10065
NBER Working Papers and Publications
|September 2017||Returns to Pharmaceutical Innovation in the Market for Oral Chemotherapy in Response to Insurance Coverage Expansion|
with Caroline S. Bennette, Anirban Basu, Scott D. Ramsey, Zachary Helms: w23842
We estimated the average returns, in terms of patient survival, to the marginal innovations in oral chemotherapy market induced by Part D expansion of oral chemotherapy coverage for elderly individuals by mandating inclusion of “all or substantially all” oral anti-cancer medications on plans’ formularies. We exploited exogenous variation in the age of diagnosis for different cancer sites - and therefore the relative expansion in market size for different cancers under the Medicare’s prescription drug coverage – to isolate the effect of Part D on innovation and the health benefits that these innovative technologies provide. Using data from FDA and clinical studies from January 1994 to December 2016, we find that the approval rate for oral chemotherapies increased an additional 5.7% (95% CI:...
|January 2015||Pricing in the Market for Anticancer Drugs|
with David H. Howard, Ernst R. Berndt, Rena M. Conti: w20867
Drugs like bevacizumab ($50,000 per treatment episode) and ipilimumab ($120,000 per episode) have fueled the perception that the launch prices of anticancer drugs are increasing over time. Using an original dataset of 58 anticancer drugs approved between 1995 and 2013, we find that launch prices, adjusted for inflation and drugs’ survival benefits, increased by 10%, or about $8,500, per year. Although physicians are not penalized for prescribing costly drugs, they may be reluctant to prescribe drugs with prices that exceed subjective standards of fairness. Manufacturers may set higher launch prices over time as standards evolve. Pricing trends may also reflect manufacturers’ response to expansions in the 340B Drug Pricing Program, which requires manufacturers to provide steep discounts to ...
Published: David H. Howard & Peter B. Bach & Ernst R. Berndt & Rena M. Conti, 2015. "Pricing in the Market for Anticancer Drugs," Journal of Economic Perspectives, vol 29(1), pages 139-162.