PhRMA: Advance Price Notification Not the Solution

from tHEORetically Speaking: The HealthEconomics.Com Blog at on March 30, 2018 at 04:47PM

PhRMA’s Saumil Pandya and Emily Donaldson say in an article published Thursday that advance price notification, a proposal gaining traction across the country to boost drug pricing transparency, will likely do little to help its cause.

The authors say proponents “fail to recognize the real hurdles and risks” that would arise from advance price notification.

“Advance notification of price increases does not save money for patients or payers, including the government,” they say.

According to the authors, advance notification could also put at risk previous measures by regulators and the industry aimed to eliminate “practices to profit from fluctuations in price.”

“By notifying payers of anticipated price increases in advance, distributors – especially those that do not previously negotiate contractual agreements with manufacturers – are incentivized to purchase and stockpile medicines at the old price, and wait to sell them at the new price once the increase goes into effect,” they write.

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