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An Opportunity for Demand Side Innovation

Rebecca S. Eisenberg & W. Nicholson Price II, Promoting Healthcare Innovation on the Demand Side, Oxford Academic J.L. & Biosciences (2017).

The intersection of healthcare information goods, resulting products, and the legal system is frequently reduced to unhelpful binary generalizations such as “regulation (particularly drug safety and data laws) impedes innovation.” Eisenberg and Price helpfully consign such caricatures to the past, substituting far more nuanced (and a lot more interesting) reflections on healthcare and innovation.

Their primary contribution is to describe a different idea of innovation; one based on the demand side rather than the supply side. This is to be contrasted with the “Innovation Law Beyond Intellectual Property (IP)” literature which has examined non-IP mechanisms such as grants, prizes, or insurance to incentivize innovation without utilizing exclusionary patent rights. Those approaches, while they may have been shaped on the demand side, are executed on the supply side (such as a government subsidy paid to a drug company to encourage production of an unprofitable drug). In contrast, Eisenberg and Price are interested in true demand-side innovation based on the data accessible to payers; providers or insurers and, optimally, vertically integrated stakeholders such as large HMOs. These payers, the authors argue, could leverage the enormous clinical and prescribing data sets they can access “to develop new information about drug toxicity, comparative effectiveness, precision medicine, and to perform other forms of innovation.” If successful, “[t]he incentives of payers to cut costs… could be a corrective counterweight to the incentives of product sellers to maximize their own patent-protected profits.”

This counterbalancing idea is a smart one given the poorly functioning marketplace that is healthcare’s fate. Currently, supply-side pharmaceutical companies can transfer their information goods into IP-protected profit centers. Thereafter, even major payers such as private insurance companies have difficulty negotiating down drug prices while federal law embarrassingly prohibits price negotiation for Medicare Part D drugs. Essentially, Eisenberg and Price are encouraging payers to undertake roles such as “new technology assessment” (NTA) that in other healthcare systems are undertaken by regulatory or independent agencies. For example, the UK’s National Institute for Health and Care Excellence and the German Institute for Quality and Efficiency in Health Care evaluate new drugs on the basis of their comparative or cost effectiveness. Their findings determine whether such drugs are included in the national formulary (UK) or subject to reference pricing (Germany). There are few regulatory analogs in the U.S. and the closest one, the Patient-Centered Outcomes Research Institute (PCORI), is expressly prohibited from using the classic NTA outcome measure, the quality-adjusted life year.

The authors recognize that the opportunity for demand-side innovation faces practical barriers. The data required is often hopelessly fragmented; payers may have the opportunity to innovate but, the vertically integrated aside, few will have the incentive; and (because no paper on innovation is complete without a criticism of dear HIPAA) they argue that data laws may hinder access to or use of clinical data. Equally, the examples the authors give of government programs that could help demand-side innovation (Meaningful Use, the FDA Sentinel System, and PCORI) are hardly shining examples of regulatory home runs. However, maybe some of the provisions of the recently enacted 21st Century Cures Act will turn those around. That legislation also raises the interesting question whether those on the supply side increasingly will be interested in demand-side data given the increasing role of patient experience and clinical data in the drug approval process.

The decline in the number of breakthrough drugs suggests supply-side innovation is slowing, and the authors also note the pharmaceutical industry’s ambivalence to a successful precision medicine initiative. Equally, we may not yet have reached the inflection point for data-driven analysis on the demand side, and we are a long way from realizing the benefits of patient access to useful information built on such data. However, although the balance of innovation power remains on the supply side, Eisenberg and Price provocatively suggest that should change. If the authors’ predictions play out it will be interesting to see whether the result will be demand-led safer and cheaper products, or whether the supply side will demand increased IP and other rewards to reassert the supply-side imbalance.

Cite as: Nicolas Terry, An Opportunity for Demand Side Innovation, JOTWELL (March 28, 2017) (reviewing Rebecca S. Eisenberg & W. Nicholson Price II, Promoting Healthcare Innovation on the Demand Side, Oxford Academic J.L. & Biosciences (2017)), https://health.jotwell.com/an-opportunity-for-demand-side-innovation/.

Targeted, Concise Treatments for the American Health Care System

  • David Orentlicher, Controlling Health Care Spending: More Patient “Skin in the Game?", 13 Indiana Health L. Rev. 348 (2016), available at SSRN.
  • Barbara A. Noah, The (Ir)rationality of (Un)informed Consent, 34 Quinnipiac L. Rev. 691 (2016), available at SSRN.

From a health law and policy perspective, the recent presidential election results have undoubtedly ushered in a new period of tremendous uncertainty. With President-elect Trump ascending to the office this year, it is likely that the health care delivery and financing system—to say nothing of the numerous health law syllabi in health care law courses across the country—will look radically different in the years to come. As I write, policymakers and prognosticators are debating which—and how many—pieces of the Affordable Care Act will survive. Nevertheless, no matter the makeup of American health care system in the future, many challenges the system currently faces will endure—and likely intensify. Chief among those concerns revolves around the strangling cost of American health care.

Examining the issue in two separate manifestations and focusing on patient decision-making in two separate contexts, David Orentlicher and Barbara Noah provide practical and succinct suggestions in well-written, recently-published essays, Controlling Health Care Spending: More Patient “Skin in the Game?” and The (Ir)rationality of (Un)informed Consent, respectively. Both tackle problems that contribute to the nagging challenge of cost—Orentlicher largely with an eye on influencing patient decision-making through coverage incentives and penalties, and Noah with an eye on improving patient clinical decision-making at the end-of-life. As overutilization and cost are a focus of much of my scholarship, I was delighted to discover both pieces and to engage with their insights as we overlook a new period of yawning uncertainty in health law and policy.

First, in his insightful essay, Professor David Orentlicher paints a dark picture of American health care cost and quality before diving into a few suggested policy changes. Orentlicher focuses on two main solutions: (1) recalibrating patient cost-sharing, and (2) using employer wellness programs to address inefficiencies and incentives. On improving patient cost-sharing, Orentlicher rightly observes the main challenge: if the insurance’s cost-sharing amount is too high, patients are deterred from seeking care (especially those of lower economic means), and if the cost-sharing is too low, patients will seek too much health care and waste resources.

After identifying this challenge, Professor Orentlicher presents targeted solutions. First, he notes that aggressive cost-sharing must be reserved for lower-value care; this way, patients are appropriately steered to the doctor when it is most efficient for them to visit. Second, Orentlicher notes the importance of reference pricing to standardize the cost of a given procedure or product, pushing patients to lower-cost providers. And third, he highlights “scaled” cost-sharing, in which he suggests that deductibles and other cost-sharing mechanisms be scaled to one’s familial income, and not a raw dollar amount. This would address the problem of those without disposable income avoiding the doctor too much, and those with more disposable income visiting the doctor too often.

Finally, Professor Orentlicher highlights the upside of employer wellness programs in cutting the cost of health care. Within this section, after describing some of the limitations and threats facing wellness programs, he encourages program designers to think about three main features for incentives: first, programs should reward short-term progress; second, programs should structure incentives indefinitely; and finally, programs must carefully consider the benefits and downsides of a system with either built-in rewards or penalties (Professor Orentlicher seems to suggest that rewards may work better).

Second, in her artfully titled essay, Professor Barbara Noah tackles the inadequacies of informed consent. She starts by highlighting the size and scope of the problems raised by dying in America—most notably that we overutilize certain care and that we underutilize other types of care—and forecasts that it is likely to worsen due to shifts in population. Referencing everyone’s different conception of, and approaches to, end-of-life decision-making, Professor Noah notes that a substantial amount of end-of-life care provides no measurable benefit. She laments the “default model” that pushes doctors to continue to provide care unless the patient undertakes a burdensome effort to opt out of often needless treatment.

Professor Noah does a masterful job of describing the difficulty facing patients at the end-of-life. After highlighting a number of other complicating factors, including cultural challenges (both of physicians’ concerns about liability and of society’s conception of death) and payment incentives, Noah attacks as impossible the idea of a “perfect” decision at the end-of-life in the face of a number of unconquerable obstacles. To explain this complication, Professor Noah effectively relies on recent work by philosophers to observe that clinical decision-making at the end-of-life is characterized by “necessary fallibility,” and is defined by unknowable and unpredictable variables. Sneakily, “unknown unknowns” may impact the real likelihood of survival, but cannot be fully understood during the clinical decision-making process. As a result, Noah argues, there is no “best” approach or treatment for a patient who may be facing the end of his or her life. This uncertainty swamps the abilities of both the provider and patient to come to a rational “best” clinical decision.

Noah finishes by pointing out a number of pressures that impact the decision-making process—from optimism bias, to a false belief that patients can achieve a perfect and rational end-of-life decision, to an inability to convey the hard edges of what can be known. She notes that we must continue to strive for informed consent, but must recognize that the doctrine is limited and imperfect. In the end, it comes down to patients being able to face the situation with as much knowledge as possible while understanding this imperfection of the decision-making process, and, above all perhaps, the fragility of life.

Both Orentlicher and Noah provide clear and focused works geared toward improving the delivery of American health care with an eye toward building a more just and efficient system. Their pieces remind all Americans—during this time of remarkable uncertainty—that some of the same old challenges will remain in need of adequate legal and policy-based solutions.

David Orentlicher, Controlling Health Care Spending: More Patient “Skin in the Game?", 13 Indiana Health L. Rev. 348 (2016); Barbara A. Noah, The (Ir)rationality of (Un)informed Consent, 34 Quinnipiac L. Rev. 691 (2016).

Reconciling the First Amendment with the Regulation of Professional-Client Communications

Claudia E. Haupt, Unprofessional Advice, 19 U. Pa. J. Const. L. (forthcoming 2017), available at SSRN.

The application of First Amendment principles to professional speech raises a seemingly irresolvable challenge. On the one hand, a core First Amendment principle is that government should not discriminate against speech based solely on its content. On the other hand, it is well settled that physicians and other professionals can be subject to malpractice liability for giving “unprofessional” advice—despite the fact that doing so depends precisely on the sort of content discrimination that the First Amendment normally does not allow. In light of this discrepancy, some have suggested that professional-client interactions should be treated as an exception to normal First Amendment principles, in order to preserve the law’s ability to protect clients from unprofessional advice.

Rejecting that approach, Claudia Haupt’s forthcoming article, Unprofessional Advice, argues that efforts to limit unprofessional advice are entirely consistent with “the claim that “[p]rofessional speech should receive robust First Amendment protection.” The article builds on Haupt’s previous work, Professional Speech, which set out a comprehensive theoretical and doctrinal framework for understanding professional speech. Taken together, the two pieces provide a coherent and convincing approach to resolving several ongoing policy debates.

Haupt’s argument rests on a novel understanding of what it means to be a professional. She argues that the professions are not simply occupational categories defined by state licensing requirements, but instead “are best conceptualized as knowledge communities whose main reason for existence is the generation and dissemination of knowledge.” Although these knowledge communities are not “monolithic,” they are defined by “shared notions of validity” that “limit the range of opinions that may be found valid within the profession.” Based on this conceptualization, she argues that the First Amendment’s protection of professional speech extends only to “assessments based on the profession’s shared ways of knowing and reasoning.” Individuals who purport to provide professional services while “refusing to follow the shared ways of knowing and reasoning due to exogenous beliefs” have thus forfeited any First Amendment protection by “plac[ing] themselves outside the knowledge community.”

Haupt justifies this distinction by pointing to the “asymmetry of knowledge” that typically characterizes the professional-client relationship, which makes it impossible for most clients to independently assess the validity of professional advice. In light of this asymmetry, clients must simply trust that the professional is providing “competent and comprehensive professional advice in accordance with the professional’s insights.” Professionals who fail to provide advice grounded in the profession’s shared ways of knowing and reasoning have therefore violated the patient’s trust.

This understanding of the scope of First Amendment protection of professional speech has several important implications. For example, it suggests that professional advice based on ways of knowing and reasoning external to the knowledge community—such as a pharmacist’s religiously-motivated refusal to advise clients on the availability of certain contraceptives—should receive no First Amendment protection. Indeed, Haupt goes further by criticizing even voluntary governmental efforts to accommodate these outsider perspectives against accepted professional positions. For example, she criticizes the Department of Education’s attempt to persuade the American Psychological Association’s Committee on Accreditation to maintain an exemption for religious programs that classify homosexuality as a mental disorder. Such efforts, she argues, constitute inappropriate “state interference endorsing the outlier status of certain professionals against the rest of the profession.”

Haupt’s approach also supports robust First Amendment protection for advice grounded in the professional community’s “shared ways of knowing and reasoning,” even for members of the profession whose “alternative assessments based on a shared methodology” lead to recommendations that are not embraced by the profession as a whole. As an example, she cites the Ninth Circuit’s decision in Conant v. Walters, which invalidated a federal policy under which physicians who recommended medical marijuana to their patients could lose their licenses to prescribe controlled substances. The Ninth Circuit’s decision “protected the scope of professional advice consistent with the knowledge community’s emergent knowledge, despite ongoing scientific debate.”

Haupt’s scholarship appears at an important moment in the application of First Amendment jurisprudence to physician-patient communications. In addition to numerous cases challenging compelled physician disclosures in the abortion context, the Eleventh Circuit is soon expected to issue an en banc decision in a case challenging a Florida statute prohibiting physicians from routinely asking their patients if they own firearms. The Florida statute is inconsistent with recommendations of numerous professional medical associations, including the American Academy of Pediatrics, which “recommends that pediatricians incorporate questions about the presence and availability of firearms into their patient history.” Yet, a panel of the Eleventh Circuit determined that these professional opinions are irrelevant, on the ground that “Florida may regulate professional standards of medical care within its borders—regardless of what medical associations may recommend.”

By grounding First Amendment protection of professional speech in the protection of knowledge communities, Haupt provides a powerful basis for resisting efforts to prevent physicians from asking the kind of questions that their professional standards require. At the same time, it leaves ample room for regulating professional communications that fall outside professional norms.

Cite as: Carl Coleman, Reconciling the First Amendment with the Regulation of Professional-Client Communications, JOTWELL (January 27, 2017) (reviewing Claudia E. Haupt, Unprofessional Advice, 19 U. Pa. J. Const. L. (forthcoming 2017), available at SSRN), https://health.jotwell.com/reconciling-the-first-amendment-with-the-regulation-of-professional-client-communications/.

Living with Alzheimer’s: A Fate Worse than Death?

Rebecca Dresser, A Fate Worse than Death? How Biomarkers for Alzheimer's Disease Could Affect End-of-Life Choices, 12 Ind. Health L. Rev. 651 (2015), available at SSRN.

According to the Alzheimer’s Association’s 2016 Alzheimer’s Disease Facts and Figures, one in nine persons in the U.S. over the age of 65 suffers from Alzheimer’s disease, with the prevalence rising to one in three persons over the age of 85. With lengthening life spans and the Baby Boom generation’s aging, the number of Americans with Alzheimer’s is projected to increase dramatically in the coming decades, from 5.2 million in 2016 to somewhere between 13.8 and 16 million in 2050. The sheer enormity of this projected number sobers medical researchers and health policy makers, inspiring initiatives to develop preventive and curative therapies and humane and sustainable care financing and delivery models.

By contrast, just one case of Alzheimer’s haunts most members of the public: the case they, or a loved one, might develop in the future. The title of Rebecca Dresser‘s article acknowledges this fear. In A Fate Worse than Death? How Biomarkers for Alzheimer’s Disease Could Affect End-of-Life Choices, Dresser considers how knowledge of an increased personal risk of developing Alzheimer’s, gained from biomarker tests, might prompt persons to take steps aimed at avoiding a prolonged course of illness. Wishing to act before symptoms of the disease render them incapable of action, persons fearful of their relatively high risk of developing Alzheimer’s might commit pre-emptive suicide. Less drastically, they might execute advance directives instructing that they should not receive life-saving medical care—or even food and water—once the Alzheimer’s manifests and erases their competency. They might even seek to take advantage of laws in the handful of jurisdictions sanctioning physician-assisted death by executing an advance request for assisted death. For each of these potential responses, Dresser cogently and concisely considers the feasibility and legality of the particular strategy for avoiding “a fate worse than death.”

This analytical part of the article is useful and thought provoking, but what I really love about this short piece is Dresser’s examination of policy responses to the increasing number of people who may be terrified by the results of their Alzheimer’s biomarker tests. These responses include the obvious need for adequate disclosure protocols and counseling of persons considering the testing, but Dresser emphasizes the need to address people’s fears head on by developing a deeper medical and public understanding of what it is actually like to live with Alzheimer’s. According to Dresser, empirical evidence suggests that many Alzheimer’s patients have a good quality of life, and that the effects of the disease may be more distressing for family members than for patients themselves. If indeed the fear associated with anticipating Alzheimer’s is often worse than having the disease, people who receive positive biomarker results should know that before they make decisions to shorten or end their lives.

The other reason I appreciate Dresser’s latest article so much, though, is that it reminded me of a longer article she wrote more than two decades ago. I first read Missing Persons: Legal Perceptions of Incompetent Patients, 46 Rutgers L. Rev. 609 (1994), years ago, and it made a strong impression on me. Reading A Fate Worse than Death? prompted me to go back to and reread Missing Persons. The earlier article explored how the autonomy model for end-of-life decision making fails, in many cases, to provide a reliable resolution of cases involving incompetent patients. It challenged the largely unquestioned primacy of autonomy as the North Star for deciding on treatments for incompetent patients, a challenge that I do not believe has been adequately answered in the past two decades.

In both articles, Dresser stresses the need to understand the lived experience of persons with dementia. Rather than assuming that their earlier, dread-inspired projections of their future wishes should control medical decisions, we should ask how those persons might subjectively experience different treatment options available today. This approach accords with the disability community’s insistence that decisions about people with disabilities be informed by their actual lived experience, instead of being infected with cultural biases against disability. Dresser does not insist that continued life will always be valuable for a person with severely compromised cognitive faculties, but she contends that the appropriate inquiry involves the subjective value of continued life to the person whose life is at issue. In short, A Fate Worse than Death? reminds readers that uninformed stereotypes are a dangerous basis on which to make life-shortening decisions.

Cite as: Mary Crossley, Living with Alzheimer’s: A Fate Worse than Death?, JOTWELL (December 14, 2016) (reviewing Rebecca Dresser, A Fate Worse than Death? How Biomarkers for Alzheimer's Disease Could Affect End-of-Life Choices, 12 Ind. Health L. Rev. 651 (2015), available at SSRN), https://health.jotwell.com/living-with-alzheimers-a-fate-worse-than-death/.

Yes, Cross-Market Hospital Mergers Can Really Drive Up Costs

Leemore S. Dafny, Katherine Ho & Robin S. Lee, The Price Effects of Cross-Market Hospital Mergers (NBER Working Paper No. w22106, 2016).

The Price Effects of Cross-Market Hospital Mergers, by economists Leemore S. Dafny, Kate Ho, and Robin S. Lee is a must-read for anyone interested in healthcare price and competition. Now, don’t get scared off by the fancy equations and economic terms like “concavity”—there is more than enough substance in plain English to make this paper accessible to an interested non-economist. The paper provides a missing link in current antitrust enforcement efforts by providing both theoretical and empirical evidence demonstrating that cross-market mergers can harm competition in ways that could violate both state and federal antitrust laws. Despite anecdotal claims to the contrary, antitrust enforcers have argued for years that cross-market mergers could not drive up the price of healthcare. Yet, we have continued to see significant consolidation in the healthcare system, both within and across geographic and product markets, along with the price increases that tend to accompany that consolidation.

Cross-market mergers have gone entirely without scrutiny from federal and state antitrust enforcers, who have argued that causes of action based on such mergers lack both a theoretical and empirical basis. However, a handful of scholars and international regulators—e.g. Vistnes & Sarafides and the European Commission—have begun to argue more forcefully that cross-market mergers can drive up costs even in markets that lack overlapping product and geographic markets, by creating what they call “portfolio power.” But, until now, there has been a lack of empirical evidence to demonstrate that cross-market hospital consolidation could drive up costs.

Dafny, Ho & Lee offer both theoretical explanations of how cross-market mergers can harm competition, as well as the empirical data to back up their ideas. Their theoretical model is based on insight from Ho & Lee’s 2015 paper, Insurer Competition in Healthcare Markets, which demonstrated that the merger of hospitals in different markets could influence insurer reimbursement rates, if those insurers had customers (employers) who employed workers in both markets. Employers would be looking to identify insurance plans whose networks provided the greatest value across all markets. As a result, an insurer’s network would not be as attractive to the employer if it did not include both hospitals, even if they were not in the same geographic market. So the merger would make the utility loss of both hospitals greater than the sum of the losses of each hospital independently in the absence of the merger. As a result, the merger provides the merging hospitals more bargaining power despite their lack of shared product or geographic markets. This directly contradicts current thinking in antitrust enforcement.

What Dafny, Ho & Lee argue in this article is that this principle extends beyond just employers looking to insure employees in different geographic markets, and holds true for consumers in the same geographic market looking to purchase different products and for insurers looking to build a network across markets. Imagine that you are deciding between health plans for your family and you care most about a network that covers both your kids’ pediatrician and your cardiologist. A plan that includes both is the most desirable, a plan that includes one or the other is slightly less, but a plan that includes neither is probably out of the question. Dafny et al. call this the “Common Consumer Effect.” The main idea is that a merger that includes both the pediatrician and the cardiologist would give the merged provider organization more utility, and therefore more bargaining power, than the sum of their independent utilities. Importantly, the common consumer effect results from a change in the parties’ outside options, not from increased negotiating skill, which opens the door to antitrust enforcement.

The same theory also applies when there are no common customers, but instead common insurers—The Common Insurer Effect. Dafny et al. hypothesized that cross-market mergers can enable a hospital system to recoup revenues lost due to political or legislative constraints in one market (caps on increases) by acquiring a hospital in a non-constrained market, and then increasing rates in the non-constrained hospital and requiring all insurers to include both hospitals in their network.

To test their theories, Dafny, Ho & Lee examined two distinct samples of acute care hospital mergers over the period of 1996-2010, and examined the price trajectories after those mergers for three groups of hospitals: (i) hospitals acquiring a new system member in the same state, but not in the same narrow geographic market (adjacent treatment hospitals); (ii) hospitals acquiring a new system member out of state (non-adjacent treatment hospitals); and (iii) hospitals that are not members of target or acquiring systems.

Their research found that the prices for adjacent treatment hospitals increased 6 – 9% relative to controls, while non-adjacent treatment hospital price changes tended to be negative and statistically insignificant. Further, when they examined the degree of insurer overlap between the merging hospitals—it absorbed the entire price effect for adjacent hospitals, meaning that a common insurer is required for there to be a cross market price effect, which is consistent with their theoretical model. It also suggests that consolidation in the insurance market may enhance these effects. They also found a small effect showing that the distance to different hospitals also had an impact (within the common insurer) suggesting a common customer effect as well.

This research calls into significant question a common assumption in antitrust enforcement- that insurers’ willingness to pay for a particular provider is linear. This assumption of linearity means that only mergers with overlapping product and geographic markets can result in anticompetitive price increases. Instead, the research suggests that both within-market and cross-market mergers between hospitals sharing a common consumer can result in higher willingness to pay by insurers and price increases. Further, merging hospitals with no common consumer or geographic market may be able increase prices via a common insurer effect through the use of double marginalization and use of an unconstrained market to alleviate price constraints in another market. Based on these findings, antitrust enforcers should more carefully scrutinize the potential impacts of cross-market mergers for harm to competition and actionable antitrust offenses.

Cite as: Jaime King, Yes, Cross-Market Hospital Mergers Can Really Drive Up Costs, JOTWELL (November 15, 2016) (reviewing Leemore S. Dafny, Katherine Ho & Robin S. Lee, The Price Effects of Cross-Market Hospital Mergers (NBER Working Paper No. w22106, 2016)), https://health.jotwell.com/yes-cross-market-hospital-mergers-can-really-drive-up-costs/.

A Definitive Primer and Prescription on Social Determinants of Health

Wendy K. Mariner, Beyond Lifestyle: Governing the Social Determinants of Health, 42 Am. J.L. & Med. 284 (2016).

I recently received a call from my university’s general counsel’s office, looking for health law advice about patient no-shows at a campus community health clinic. We discussed tort theories, including establishment of the physician-patient relationship and patient abandonment, as well as privacy issues with respect to contacting patients via email, phone, or a friend or relative. I then offered that the clinic might consider looking more deeply at the reasons for the patients’ lack of follow-through with appointments and treatment, including various social, economic, transportation, childcare, and other lifestyle barriers. I roughly described the concept of “social determinants of health,” which captures the problems to which I was referring. I explained how our law students working with medical-legal partnership clinics face similar challenges: clients may initially present with significant legal needs, which they are highly motivated to address, but then fail to keep follow-up appointments. The attorney was intrigued and asked me to forward some relevant literature on the various issues that I had identified.

It was easy enough to find cites for the torts and privacy topics, but surprisingly more difficult to identify a clear, definitive article describing the essential concept of social determinants of health. Given the increasing prevalence of the term within not only public health but also health law circles, I was surprised at my difficulty finding literature that explained this now-essential concept in a way that the uninitiated could understand. Thus, I was delighted last week to come across Wendy K. Mariner’s Beyond Lifestyle: Governing the Social Determinants of Health.

In her succinct article, Professor Mariner places the concept in a broader context that the specific application that I described to the attorney who called me. Social determinants of health is not a local or national problem but a global concern that calls for global solutions, on the level of other, more clearly recognized and accepted public health strategies to address the spread of infectious diseases. Although public health measures at various times have been challenged as overly coercive and paternalistic, the public now mostly accepts the need for vaccination, sanitation, quarantine, and even compelled treatment as strategies to control disease outbreaks, including highly salient recent examples of Zika and Ebola.

Despite the acceptance of those traditional public health strategies, Professor Mariner explains that health policy needs to broaden, or perhaps shift, its focus to more prevalent causes of poor health. With compelling data, she demonstrates that chronic diseases, including heart disease, stroke, and chronic obstructive pulmonary disease, have well surpassed communicable diseases as the leading causes of death internationally. The article then clearly defines the concept of social determinants of health, situating it along with biomedical and environmental causes of health, as identified in scholarly literature and international health policy declarations. Professor Mariner examines competing models of social determinants, some linear and others more interactive and layered. Regardless of the model, the essential point is the same: Health is impacted by a wide range of factors, including but not limited to discrimination, education, gender, political participation, poverty, housing, access to health care, occupation, and agricultural practices. Thus, the prescription for improving population health must address far more than contagious disease outbreaks.

Professor Mariner notes that even where health policymakers have embraced the prevalence of chronic diseases as a significant problem, their interventions have often missed the mark. The current approach to chronic, non-communicable diseases is to focus on individual lifestyle “choices,” such as substance use, diet, and physical activities. I place “choices” in quotations to emphasize Professor Mariner’s next significant point, which is that, by looking through the social determinants of a health lens, one recognizes that social, economic, and environmental factors greatly constrain individuals’ opportunities to engage in healthy behaviors. With that insight, health policy can be appropriately redirected to the underlying causes of inequality and redistribution of societal resources.

To that end, Professor Mariner proposes a human rights approach. The first step is recognizing the wider range of fundamental causes of illness and injury, as the social determinants concept does. The second step requires political forces to align in recognizing health as a fundamental human right, as a number of international covenants and treaties already do. Combining these two steps means turning policymaking attention to inequalities in access to income, education, employment, housing, political voice, clean environment, and health care, while proceeding cautiously with respect to wellness programs and other interventions that focus on individual responsibility instead of underlying causes of poor health.

The article concludes on a cautionary note, noting significant obstacles to addressing social determinants of health through the human rights approach. For one, many international human rights declarations and health policy recommendations lack enforcement mechanisms. Also, countries often resist adopting policies that would seem to impede economic progress and international trade. Those two obstacles are particularly salient in the United States, where we have yet to ratify a number of international declarations recognizing health as a human right and continue to prioritize commercial trade over social policies. But despite the challenges of implementing her prescription, Professor Mariner’s article boldly and clearly outlines an essential concept for health policy going forward. The particulars of how specific countries will incorporate social determinants into their health law and policy agendas remains to be seen.

Cite as: Elizabeth Weeks Leonard, A Definitive Primer and Prescription on Social Determinants of Health, JOTWELL (October 17, 2016) (reviewing Wendy K. Mariner, Beyond Lifestyle: Governing the Social Determinants of Health, 42 Am. J.L. & Med. 284 (2016)), https://health.jotwell.com/a-definitive-primer-and-prescription-on-social-determinants-of-health/.

The Case for Integrating Health Care and Social Services

Elizabeth H. Bradley & Lauren A. Taylor, The American Health Care Paradox: Why Spending More is Getting Us Less (2013).

Although the U.S. spends far more per person on medical care than any other nation, the results have been less than impressive. Relative to other developed nations, the U.S. consistently performs worse on a wide range of health measures, including infant mortality, premature deaths, life expectancy, and prevalence of heart disease, diabetes, and other chronic illnesses. Many health care experts have pointed to inefficiencies in our health care system as the cause for this paradox. Bradley and Taylor identify another culprit — too little attention to the social, environmental, and behavioral factors that impact health.

The book begins with a summary of the authors’ previous research comparing spending on health care and social services among OECD countries. This research found that when spending on health care is combined with spending on social services, the U.S only ranks in the middle of OECD countries. More importantly, the U.S. is an outlier when comparing the ratio of a nation’s social to health spending, with the U.S. allocating a far greater share of its gross domestic product to health care than to social services. This suggests that the U.S. is shortchanging the social services that help people live healthier lives, including public health, housing, education, community safety, and income support. The authors’ conclusion finds support in their recently published study comparing state spending, Variation in Heath Outcomes: The Role of Spending on Social Services, Public Health, and Health Care, 2000-09, 35 Health Affairs 760 (May 2016), which found that states with a higher ratio of social to health spending had better health outcomes. Chapter 3 of the book brings the data to life by profiling three individuals who incurred significant (and expensive) health problems when their social and behavioral health needs went unmet.

But Bradley and Taylor do not simply argue that the U.S. could get more bang for the buck if it rebalanced spending between health care and social services. Rather, they make the equally important and often overlooked point that the U.S. must do a better job of integrating health and social services. Chapter 2 provides a historical overview of the U.S. health care and social services sectors, highlighting the fragmentation plaguing both sectors. Chapter 4 compares the health and social services systems of the U.S. and Scandinavian countries. The authors make a not wholly convincing argument that cultural and political differences between the U.S. and Scandinavian countries are smaller than generally believed and that the U.S. therefore can learn much from these countries. More usefully, the Scandinavian examples concretely illustrate the value of coordinating health and social services, as well as the importance of assigning accountability for a population’s health to a centralized entity (with locally elected government officials serving this role in Scandinavian countries). Chapter 5 further underlines the potential for synergy between the health care and social services sectors with a description of four organizations in the U.S. that are successfully coordinating health care and social services.

The book also provides some useful lessons for those seeking to better integrate health care and social services. Chapter 6 analyzes previous efforts in the U.S. to integrate health care and social services, namely the push for neighborhood health centers in the 1960s and health maintenance organizations in the 1970s and 80s. The authors explain how both efforts were undermined by powerful interests opposed to these developments and an American culture that values personal responsibility. Chapter 7 highlights other challenges, most importantly how the fragmentation of health care and social services is reinforced by a political system that primarily makes decisions about social services at a local level while decisions about health care services are made at the state and federal levels. Proponents of future efforts to integrate health care and social services will need to consider how best to overcome these political forces.

While the authors do not offer specific prescriptions for how to correct the paradox they identify, their insights teach us that reforming the health care sector in isolation from the social services sector is not the solution. In doing so, they help reframe the conversation about how to improve Americans’ health.

Cite as: Jessica Lind Mantel, The Case for Integrating Health Care and Social Services, JOTWELL (September 16, 2016) (reviewing Elizabeth H. Bradley & Lauren A. Taylor, The American Health Care Paradox: Why Spending More is Getting Us Less (2013)), https://health.jotwell.com/the-case-for-integrating-health-care-and-social-services/.

An Internationally Justiciable Right

Lisa Forman, Can Minimum Core Obligations Survive a Reasonableness Standard of Review Under the Optional Protocol to the International Covenant on Economic, Social and Cultural Rights?, 47 Ottawa L. Rev. (forthcoming), available at SSRN.

The U.S. legal discourse on health rights is impoverished, neglected, and underinformed. The right to health is reflexively dismissed as one of the affirmative rights that our tradition of negative liberties renders irrelevant. And there (I exaggerate only slightly) conversation stops. But when we inspect this conversation-stopper, it is based on overgeneralization. The truth is more fact-dependent. Lisa Forman, in Can Minimum Core Obligations Survive a Reasonableness Standard of Review Under the Optional Protocol to the International Covenant on Economic, Social and Cultural Rights? (forthcoming in the Ottawa Law Review), gives us a window into the granular.

Managing to adjudicate an “unwieldy” health right

Although the right to health, as a right of the economic, social, and cultural variety, is often thought to be a right to some affirmative state provision rather than a negative liberty from state action, this assumption is belied by laws in the U.S. that can function as negative rights to health. For instance, some laws protect private use of plant varieties relating to essential foodstuffs against enforcement of government-granted monopolies, or provide procedural rights for a health impact assessment prior to government action that harms health. Those examples reveal statutes or regulations that restrict governmental power to infringe on individuals’ right to health. Nevertheless, once labeled as “positive rights,” health rights frequently assume a reputation as unmanageable. Forman voices this conventional wisdom succinctly: the realization of the right to health, under this skeptical view, “requir[es] extensive state action and resources, so that judicial enforcement would reallocate budgets and alter social policy, breaching the appropriate democratic separation of powers and wreck[ing] budgets.” And yet, jurisdictions outside the U.S. manage to adjudicate such rights day in and day out, handling them just as the legal system treats all kinds of other unmanageable questions, by generating thick, fact-rich jurisprudence.

Forman is among my trusted voices in the argument for a right to health with “bite.” Indeed, she is looking at the shape of the serration. The right to health operates in other contexts, justiciable in jurisdictions such as South Africa, Colombia, and Israel, but also within a body of international law binding on the global community. All countries are subject to human rights obligations under the United Nations Charter. The Universal Declaration of Human Rights (UDHR), which all U.N. members unanimously adopted in 1948, is not itself a treaty, but the common authoritative elaboration of the human rights obligations imposed by the Charter, including rights relating to health and medical care. The International Covenant on Economic, Social and Cultural Rights (ICESCR), now ratified by roughly two-thirds of countries (not including the U.S.), is a more detailed specification of the economic, social, and cultural human rights provisions of the UDHR.

In this article, Forman alerts us to a rather striking development. The Committee on Economic, Social and Cultural Rights (CESCR)—which is the UN Committee charged with overseeing the realization of the ICESCR rights—has issued an optional protocol governing individual claims that can be filed with the Committee over violations of the rights. This development makes the right to health, as Forman says, “an internationally justiciable right.” This protocol came into force in 2013, and Forman updates us on the specific questions that loom large for the practical implementation of a right to health.

Forman, in a number of contexts before, has expressed her view that giving content to a right to health should involve delineation of a minimum core. Debate continues to surround whether that core would or should be non-derogable, even in the face of resource limitations, or the “progressive” process of realizing the right. Alternatively, some view the core within a hierarchy of health interests that should be prioritized in the progressive realization of the right to health.

But Forman here flags that the optional protocol sidesteps commitment to the strongest conception of a minimum core right to health. Article 8(4) of the protocol establishes that any State’s policies will be judged not by fidelity to the minimum core, but by their adherence to a “reasonableness” standard.

Does this formulation have bite? Does it provide a manageable standard for justiciability? Forman says, “The threat of rejecting core obligations in favour of reasonableness is that as long as a state establishes that it is acting reasonably to progressively realize rights within resources, almost any extent of deprivation could be permitted.” But Forman’s tone is less that of hostile foe than friendly critic. She is vocal in holding institutions accountable against the potential weaknesses of such an approach, while hopeful that the approach can push our understanding and practice forward. Reasonableness in the health rights discourse is at least as manageable as the standard for courts’ substantive oversight of agency action, as observed before by Cass Sunstein.

It may be that this right, without more, cannot, “respond to…neoliberalism’s obliteration of the ceiling on inequality,” as suggested by Samuel Moyn. But that is not the same as saying the right cannot achieve normative significance. The right will bite if there is a body of jurisprudence specifying it further, and, with this protocol in effect, this jurisprudence will develop further; we will be able to see the conception taking shape, we can reference it, and we will crystallize our expectations around it.

We already see this process in other jurisdictions, where other jurisprudences are doing just that, and indeed they are borrowing from one another. Forman writes of how the final drafting of Article 8(4) of the optional protocol involves a direct quote from the South African Constitutional Court decision Government of the Republic of South Africa v. Grootboom, after an NGO representative looked up the language on her laptop.

Lessons for U.S.

What of the U.S. legal discourse? Our willful blindness and neglect of health rights discourse means we break faith with one of the first principles of lawyering: the primacy and richness of facts. Health rights don’t always come up in the manner we suppose (Christina Ho, Are We Suffering from an Undiagnosed Right to Health, Am. J. L. & Med. (forthcoming 2016)), and thus we underestimate how the facts can guide us by constituting case law and a jurisprudence that provides shared parameters and understandings. For now, we can see that these arguments and conceptions are in the process of being fleshed out and will be available for the conversation we may yet have one day in the U.S.

Cite as: Christina Ho, An Internationally Justiciable Right, JOTWELL (August 3, 2016) (reviewing Lisa Forman, Can Minimum Core Obligations Survive a Reasonableness Standard of Review Under the Optional Protocol to the International Covenant on Economic, Social and Cultural Rights?, 47 Ottawa L. Rev. (forthcoming), available at SSRN), https://health.jotwell.com/an-internationally-justiciable-right/.

Restoring the Integrity of the Pharmaceutical Science Record: Two Tales of Transparency

Inappropriate prescription and overconsumption of pharmaceuticals is one of the most pressing public health concerns in North America. Aggressive pharmaceutical promotion practices are widely recognized as a major contributing factor. Two recent medical journal articles provide further evidence of serious problems with the scientific record that has become an intrinsic part of pharmaceutical marketing. They document each in their own way the corruption of scientific practices in which academic scientists appear to play a significant role, but also indicate how the scientific community and civil society can help correct the record and expose misconduct. The papers further illustrate how legal tools can enable them to do so. They both affirm the importance of transparency, which many in the medical and health policy community increasingly support as essential to restore confidence in the science surrounding pharmaceuticals.

Jon N. Jureidini, Jay D. Amsterdam, and Leemon B. McHenry’s paper in the International Journal of Risk and Safety in Medicine is a case study of how the pharmaceutical company Foster used a scientific publication to boost prescription of its blockbuster anti-depressant citalopram. A paper by Joanna Le Noury and colleagues in the British Medical Journal is the first publication produced as part of an innovative initiative by the scientific community aimed at correcting the scientific record on a host of pharmaceutical products. The study involves a reanalysis of the raw data of a Smithkline Beecham (now GSK)-sponsored published study on the efficacy of paroxetine and imipramine for the treatment of depression in adolescents.

That both publications deal with anti-depressants is not entirely surprising. They have been among the most prescribed—in fact overprescribed—drugs of the last decades. The vagueness of diagnostic criteria and the subjective nature of efficacy measurements in relation to most mental health conditions further facilitate data manipulation. Yet it should not lull us into thinking that the problems are restricted to psychiatric drugs. Both papers confirm what has been exposed in the medical and increasingly also the health law and policy literature for some time, and in relation to a variety of products: that industry control over the design, conduct, analysis, and reporting of clinical drug trials has turned many scientific publications into marketing tools. It has enabled the industry to selectively report positive results, hide negative results, manipulate statistical tools for favorable outcomes, and underplay problems.

The Jureidini et al. analysis, based on data unsealed by a U.S. court as part of a court-approved settlement in a class action litigation procedure, provides fascinating evidence of how a company can conspire with a medical writing agency and—certainly indirectly—academic scientists, to use flawed scientific publications as marketing tools. The authors obtained access to a host of documents, including correspondence, e-mail exchanges, protocols, trial results, and drafts of ghostwritten documents. They examined the original protocol and clinical trials data of a study on citalopram’s efficacy and safety for the treatment of major depression with the final published outcome. Their unsurprising conclusion is that the published paper mischaracterized primary outcomes and adverse events, hid negative secondary outcomes, and added post hoc outcomes that put a more positive spin on the data. Their analysis of the correspondence and e-mails between the medical communications agency and company marketing officials interestingly reveals that the paper was entirely written in-house and explicitly approached as a PR document. Yet, 18 academic scientists became authors of the paper, including the elected president of the American Academy of Child and Adolescent Psychiatry as the first author. The paper quotes some remarkable exchanges that should make any academic author on the paper blush, if not outright fear sanctions for violation of authorship standards. Correspondence reveals that a full draft was produced before the authors were even contacted. Yet, the academic authors later maintained that they didn’t know that a guest writer of a medical communications firm had been involved.

The Le Noury et al. study is the first study to come out of the so-called RIAT initiative: Restoring Incomplete and Abandoned Trials. The RIAT initiative was launched in 2013 with a high profile publication in the British Medical Journal. With this initiative, prominent scientists launched a public call to sponsors and investigators of unpublished (abandoned) studies to correct the published record on pharmaceutical products. They pointed out that increasing amounts of previously hidden information had become publicly available, including through access-to-information requests with the European Medicines Agency (EMA). A preliminary analysis of these data already suggested, according to the RIAT authors, that several clinical trial publications related to widely prescribed pharmaceuticals were questionable and might be in need of correction. The RIAT proposal put the sponsors and authors of these publications before an awkward dilemma: either they correct their publication themselves within a year—likely having to admit that they made “errors”—or the RIAT initiative would invite volunteers in the scientific community to conduct their own analysis based on the full data set, and submit these “restorative” publications to correct the scientific record. Several leading international medical journals explicitly supported this initiative and announced they were interested in publishing the outcomes of these studies. The 2015 Le Noury et al. article is the first of these restorative publications, written by independent authors not involved in the first study. Not surprisingly, their thorough analysis of the full data set confirms what many had already been arguing for years, namely that paroxetine is no better than placebo for the treatment of depression in children and adolescents, and is associated with a risk of serious side effects, including suicidal ideation and self-harm. Publications by leading psychiatrists had come to the opposite conclusion at the time. Also not surprisingly, these authors still maintain that their original publication remains valid.

Several commentators, including myself, have argued for a complete overhaul of the drug regulatory review system because of the significant impact of the discussed problems on public health and health care expenditures. The two papers both uniquely show what can and should be done in the absence of such reform and how legal tools can empower the scientific community to counter problems that have been created to a significant extent by ill-conceived regulatory and legal rules. The drug regulations requiring the submission of detailed clinical trials data are indeed responsible for the creation of a billion-dollar pharmaceutical knowledge industry. And trade secret rules are increasingly invoked to keep some of the data underlying regulatory submissions and scientific publications hidden. It is precisely the existence of this knowledge production industry, protected by legal rules, that has given the pharmaceutical industry enormous power over the creation, analysis, and selective distribution of research results. Since the U.S. or other governments will not likely take over the conduct of clinical trials or set up a very different and more independent clinical trials structure anytime soon, transparency can help restore the scientific record, expose problems, and provide tools for civil society to hold regulatory agencies accountable for their decision-making.

The papers also show what works best for what purpose. Both papers relied on transparency, but they obtained their data through different legal mechanisms. Jureidini et al. were dependent on a court order, and thereby had access to communications among the company, a medical writing agency, and academics for their analysis. Their paper gives unique insight into the concrete involvement of, and collaboration between, medical writers and academics in these marketing schemes. Yet, as the authors rightly point out, pharmaceutical litigation often ends up in settlements where confidentiality agreements are a part of the deal. As plaintiff lawyers may offer confidentiality of the data to obtain better compensation, a potential conflict of interest exists between plaintiffs’ lawyers and their clients, on the one hand, and the public interest in access to data, on the other. Moreover, this form of disclosure obviously happens only when someone has made the effort to go to court for the alleged harms caused by a pharmaceutical product. Court-ordered unsealing therefore cannot be relied upon as a systematic tool for public health.

Le Noury et al. obtained most of their data as a result of the EMA’s data access policy, arguably the most comprehensive data access policy by a drug regulatory agency. The new data policy starts from the premises that disclosure is the rule, clinical data submitted to the drug regulator are generally not confidential commercial information, and that exceptions to disclosure have to be justified. (This is in contrast to other countries, such as Canada, where drug regulators appear to have accepted industry’s argument that most of these data constitute confidential commercial information and that regulators are therefore under specific obligations to keep the data secret.) The EMA policy is not perfect and its implementation may often face difficulties. But the EMA’s more flexible approach to data sharing, which is reflected in this new policy but was also already present in the data sharing practices it has been following in the last couple of years, resulted in the release of more than 1.5 million pages of previously hidden data. A strong data disclosure policy, clear rules for disclosure, and a regulatory affirmation that these clinical data should generally not be considered confidential, are indeed the preferred approach to promote public health. They are not a panacea, since it still requires a significant mobilization of the scientific community and civil society to conduct these analyses. But they are an important means to restore the scientific record and to hold drug regulatory agencies also potentially accountable for their decisions.

Let me add a final note from an academic integrity perspective. Both papers reveal problems of scientific integrity in pharmaceutical industry-sponsored publications and raise serious questions about the collaboration of academic scientists. In light of what is being exposed in these and in many other related publications, it is remarkable how academic institutions remain silent about the alleged scientific misconduct by some of their researchers.

Cite as: Trudo Lemmens, Restoring the Integrity of the Pharmaceutical Science Record: Two Tales of Transparency, JOTWELL (July 14, 2016) (reviewing Jon N. Jureidini, Jay D. Amsterdam & Leemon B. McHenry, The Citalopram CIT-MD-18 Pediatric Depression on Trial: Deconstruction of Medical Ghostwriting, Data Mischaracterisation and Academic Malfeasance, 28 Int’l J. Risk & Safety Med. 33 (2016); Joanna Le Noury et al., Restoring Study 329: Efficacy and Harms of Paroxetine and Imipramine in Treatment of Major Depression in Adolescence, 351 Brit. Med. J. 4320 (2015)), http://health.jotwell.com/restoring-the-integrity-of-the-pharmaceutical-science-record-two-tales-of-transparency/.

Health Insurance as Innovation Incentive

Rachel Sachs, Prizing Insurance: Prescription Drug Insurance as Innovation Incentive, 30 Harv. J. of L. and Tech. (forthcoming 2016), available at SSRN.

In Prizing Insurance: Prescription Drug Insurance as Innovation Incentive, Rachel Sachs brings together the often disparate worlds of intellectual property theory and health insurance design, to argue that prescription drug insurance could be structured to offer a better incentive for pharmaceutical companies to develop drugs that treat conditions primarily affecting low-income Americans. Typically, health insurance design is evaluated from an access and utilization perspective. Professor Sachs suggests we should broaden that view, at least when it comes to drug coverage, to evaluate the effect insurance coverage has on research and development incentives.

To make her point, Professor Sachs works through the example of the innovation incentives for drugs that would be primarily prescribed to low-income populations in the U.S., such as those that would treat various tropical diseases. While there are many factors that influence the development of drugs, one of those incentives is financial. And when it comes to diseases that affect primarily low-income individuals, the financial analysis disfavors significant innovation investment. After all, if the population to be treated is either uninsured or covered through only Medicaid, the “prize” for developing a treatment may be insufficient to support investment. Medicaid arguably contributes to this lack of incentive given its relatively low payment rates for pharmaceuticals, which are significantly below other market payers in the U.S. The novel argument Professor Sachs makes is that insurance design could be modified to help achieve socially desirable innovation that the market would not otherwise reward.

The article begins by explaining how the patent and FDA regulatory systems do not necessarily produce socially optimal innovation. For example, she argues that exclusivity periods and clinical trial limitations can distort the incentives for innovation, favoring certain types of drugs and interventions over others. In addition, while she acknowledges that market incentives do often reward the creation of socially desirable drugs and treatments, the mechanism is imperfect because of ability-to-pay concerns and a lack of consumer salience. In the end, the types of innovations that are incentivized are not necessarily the ones with the greatest social value or those that would address the most significant disease burdens.

After establishing the current distortions in innovation incentives, Professor Sachs moves on to discuss various policy levers that might be used to address such distortions. First, she explains why reforms aimed at the current intellectual property and FDA regimes are unlikely to be wholly effective. From there, she makes the case that insurance design itself could be used to create targeted incentives for socially desirable innovations in the pharmaceutical arena, and it is here that Professor Sachs introduces a novel way of evaluating insurance. She focuses on Medicaid, given that it is the primary source of coverage for low-income Americans and she wants to concentrate on populations for whom the usual market mechanisms would fail to produce socially optimal investment. Pursuant to federal statute, state Medicaid programs are entitled to specific percentage discounts on the average manufacturer price of all pharmaceuticals. While that pricing structure makes sense from an access and cost perspective, it lowers the incentive for pharmaceutical companies to develop drugs that primarily serve the Medicaid population. She argues that Medicaid drug pricing could be tweaked to function more like a prize for innovation, without necessarily undermining cost or access concerns.

Innovation incentives in the pharmaceutical industry in the United States are complicated by our disparate insurance markets. Medicaid pays comparatively low prices for pharmaceuticals, with Medicare and private insurance paying more. As a result, all other things being equal, pharmaceutical companies should favor innovation that will have higher utilization among the higher-paying populations – leaving the Medicaid market as the most unattractive in the U.S. While some commentators have argued that the solution is to “equalize down” – moving payment rates for non-Medicaid payers down to Medicaid levels, Professor Sachs argues that we should strategically “equalize up” – raising Medicaid rates to help achieve socially desirable innovation. She walks through possibilities for achieving this result at the federal level, and also discusses how enterprising states might implement such strategies on their own.

Professor Sachs’ article deftly brings together an understanding of patent and FDA regulation, along with insurance pricing mechanisms, to give a more complete picture of healthcare innovation than is standard. As someone who spends a lot of time thinking about health insurance regulation, I valued both the explanation of why the patent and FDA regulatory systems under-incentivize certain types of innovation, as well as Sachs’ position that evaluation of insurance design should go beyond cost, access, and utilization. While this article focuses specifically on the development of drugs to treat neglected diseases that affect primarily low-income populations, it could easily be applied to other areas in which insurance reimbursement structure impacts health care innovation.

Cite as: Amy Monahan, Health Insurance as Innovation Incentive, JOTWELL (June 9, 2016) (reviewing Rachel Sachs, Prizing Insurance: Prescription Drug Insurance as Innovation Incentive, 30 Harv. J. of L. and Tech. (forthcoming 2016), available at SSRN), https://health.jotwell.com/health-insurance-as-innovation-incentive/.