Delinking Reimbursement image

Minnesota Law Review, Vol. 102, Issue 6 (July 2018)
Rachel Sachs (Academic Fellow Alumna)

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Introduction:

Recently, scholars and policymakers on both sides of the aisle have become interested in the legal and regulatory structures surrounding pharmaceutical approval and reimbursement in this country. Scholars focusing on the Food and Drug Administration (FDA) have considered the ways in which it ought to regulate emerging technologies, debated the optimal level of evidence required for approval, and explored the ways in which pharmaceutical companies seek to game various FDA requirements to extend their patent monopolies. Scholars focusing on reimbursement have argued that existing payment systems do not provide optimal incentives to payers or providers, and have examined the relationship between insurance regulation and patient costs for new drugs.

In the policy arena, efforts like the 21st Century Cures Act claim to modernize the FDA, encouraging agency officials to think carefully about the development of new healthcare technologies in an age of personalized medicine. At the same time, concerns about the ever-increasing prices of drugs have led to a host of proposals for reform, some wholesale and some piecemeal. Although legislators have yet to take meaningful action to lower drug prices on the federal level, state legislators have aimed to fill the void, advancing eighty bills on the topic in thirty states in 2017 alone.

Yet too often, those who focus on the FDA and those who focus on reimbursement fail to appreciate the links between the two programs. At least in the United States, FDA approval and insurance reimbursement for prescription drugs are tightly linked by law, in a way that affects policy choices on both sides of the equation. It is critical that scholars and policymakers come to understand this linkage. Understanding the relationship between approval and reimbursement is key to effective policymaking. Lawmakers must seek to ensure that policies are actually capable of having their intended effect, and that they do not also have significant unintended consequences. This Article considers the ways in which approval and reimbursement are linked in the United States and envisions a system in which the two are delinked, if only partially.

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bioethics health care finance health care reform health law policy insurance rachel sachs