Five Elements Influencing Medicaid Prescription Drug Access & Coverage
November 29, 2016
The National Academies of Sciences, Engineering, and Medicine (NASEM), formerly the Institute of Medicine, recently convened its first Committee on Ensuring Patient Access to Affordable Drug Therapies. The committee is charged with developing a final report that identifies issues in drug pricing and recommendations for that could potentially alleviates these issues if implemented.
The Institute for Medicaid Innovation was invited to present, offering the Medicaid perspective on drug pricing and its impact on those enrolled in Medicaid. The presentation included an overview of Medicaid drug pricing, trends, a synthesis of notable developments, and a discussion of key issues as they relate to the task of the committee. We also provided thoughts and perspectives on drug pricing and affordability from the perspective of Medicaid consumers.
As an overarching conceptual framework for our presentation, we proposed that discussions around drug pricing include five key elements regardless of type of insurance coverage. These elements include quality, cost, access, emotion, and ethics.
Oftentimes, quality, cost, and access are referred to as the value proposition. This implies that decisions around prescription drug access and coverage are dependent on the components of the value, or lack thereof, related to a particular drug. For instance, if a low-cost drug with high access offers low quality, what is the value in prescribing this drug? Conversely, a highly effective drug that costs a lot of money may be inaccessible due to its cost. Therefore, the value of the drug may be limited. In addition to the value proposition, we must consider the elements of emotion and ethics. As an example, the emotional response of individuals, families, and communities plays an important role in discussions about access to a high-cost, life-saving drugs. This is further compounded by the ethical considerations.
As the committee develops its recommendations on drug pricing we encouraged them to consider these elements.