PAM 3110 Final Exam Questions With Complete Questions And Answers.

High-income countries ranked by drug spending - correct answer #1 US, Canada, Japan, France Of high income countries, the US spends the greatest percentage of its medical spending on drugs T/F - correct answer FALSE, Korea does, we are seventh What has driven higher drug spending in the US healthcare market? - correct answer Higher prices and greater usage of new more expensive drugs, but not an increase in prescriptions (Germany, Japan, UK, Spain, and Canada all have a higher prescription quantity index) What are the two ways that drugs obtain approval in Europe? - correct answer European Medicine Agencies, Mutual Recognition Procedure (one company's FDA-like entity evaluates it). Moral of the story: approval and negotiation is decentralized and occurs in each country What are the 6 major pharmaceutical spending control strategies in Europe to reduce prices and restrict the use of new expensive drugs? - correct answer Internal (within a country) reference pricing, external (to other countries) reference pricing, cost effectiveness analysis (CEA), pay-for-performance = risk sharing, physicians fixed budget per patient (capitation), parallel importing = trade What is the main difference between how drug prices are set in the US and how they are set in Europe? - correct answer In the US the prices of drugs are set in the market, while in Europe drug companies must negotiate with one entity (the government) which gives European countries leverage as they can just say f*** your drug Internal reference pricing - correct answer drugs are clustered by compound (branded and generics), all drugs within a class (statins), or all drugs that treat the same condition How does internal reference pricing work? - correct answer All private health insurers pay the same price, the price of the least expensive drug in a cluster. If a company charges more than the reference price, the patient pays the balance. Firms are hesitant to charge more than the reference price (Lipitor's market share fell a lot when it did) Describe the 2011 German law put in place that requires the government to negotiate directly with firms - correct answer The government chooses a competitor, and gives the new drug a grade based on how big of an improvement it is over the compared standard. The bigger the improvement the higher the premium they can charge. Once this has been determined, this is the price that all health insurers in Germany will pay for the drug. A few firms have decided not to do business in Germany due to external referencing in other countries (Germany is referenced by 19 other countries) How does Canada determine what price it will pay for drugs? - correct answer They base the price of their drug off the median price of the same drug or similar drug's prices in seven specific countries (France, Italy, and Spain also use external reference pricing similar to this) How does external pricing change negotiations? - correct answer It links markets and tends to equalize prices, regardless of willingness or ability to pay for drugs (erodes price discrimination) ICER - correct answer Change in cost/Change in health What is the body that assigns treatments with ICER values in the UK? - correct answer The UK National Institute for Health and Care Excellence (NICE) Benefits of cost effectiveness analysis pricing? - correct answer It allows countries to receive the greatest health benefit on a limited budget by only promoting health services with small ICERs, also creates credible negotiating power Downsides of cost effectiveness analysis pricing? - correct answer Countries that do this often see later launch dates, because launching a drug at a low price in one country can undermine the price in others (because of external reference pricing) Some examples of pay-for-performance pricing - correct answer UK: multiple schlerosis drugs: patient outcomes will be monitored and drug companies will repay the government if effectiveness targets are not met. Velcade has a similar deal. Italy: Nexavar, Sutent: drug company receives full price only if the patients respond to these kidney cancer drugs Canada: Taxotere: patients are monitored for the first six months, firm must repay the government if targets are not met What is the benefit of using more new expensive drugs? (in the breast cancer drugs referenced in the slides) - correct answer They will lead to better health outcomes Why do European patients get less costly drugs? - correct answer They are subject to capitation and are monitored for the drugs that they prescribe. Physicians that consistently prescribe more expensive drugs are pressured not to do so. How would pharmaceutical firms respond to the US allowing the importing of cheaper drugs from Canada - correct answer 1) They might increase the price of drugs in Canada 2) They might decrease the supply of drugs to Canada 3) They may stop selling drugs in Canada all together What are other concerns about shipping drugs between countries? - correct answer Fake drugs (Fake Avastin from Turkey to the UK to the US) What would happen if the US adopted the price saving strategies employed elsewhere in the world? - correct answer 1) The US and American insurance companies would definitely save money 2) Pharmaceutical firms would spend less money on research and development (or so they claim), which would in turn lead to less new drugs being developed down the road What is some evidence that higher profits indeed leads to more innovation? - correct answer The orphan drug act led to more drugs that treated rare conditions, when medicare was instituted it lead to more drugs that treated conditions that affect the elderly, policies that increased expected profits of vaccines led to more vaccines, larger markets attract more R&D activity and innovation, firms target long late stage cancer drugs in places with long patent lives (because stage 3 trials are long) How did the 2009 Stimulus Law and the 2010 ACA usher in CEA into the US - correct answer the federal government and health insurers (through taxes) will provide $500,000,000 per year to establish the Patient-Centered Outcomes Research Institute (PCORI) What does the Patient-Centered Outcomes Research Unit do? - correct answer establish a comparative effectiveness research agenda and finance specific studies: head-to-head studies of already approved drugs, devices, or medical treatments in randomized real-world settings. Prices/costs are not considered and medicare is not able to use the research to determine what it will cover Comparative effectivess - correct answer concerned only with the denominator of the ICER ratio (the health outcomes), does not consider prices What are the benefits of comparative effectiveness research in the US? - correct answer We can see real-world results of drugs that may have been approved against a placebo or a drug that was not the standard of care. More direct comparative data for standards of care and other alternatives