Vermont becomes first state to require drug makers to justify price hikes
Despite opposition from the pharmaceutical industry, Vermont late last week became the first state in the country to require drug makers to justify price hikes for medicines.
Tag Archives: Drug Prices
‘Value Creation’ And ‘Value Shifting’ In Health Care
http://healthaffairs.org/blog/2016/06/01/value-creation-and-value-shifting-in-health-care/
The whole industry seems to be reading from the same playbook: Pair up with a company that makes the same product to become a leading provider, and thus gain more clout to negotiate business with hospitals and health insurers. There is ample empirical research in health economics showing that consolidation on the supply side of the health care sector has served to drive up prices. It is another way of saying that it supports value shifting, rather than value creation.
My gratuitous advice to the drug industry, and to the health care industry in general, is to be very mindful of the distinction between value creation and value shifting in their pricing policies, lest they eventually invoke the wrath of the losers in that game, with dire consequences.
HENRY KOTULA 