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Selling prescription drugs is a classic principal-agent problem. The key decision-makers are the doctors who write the prescriptions, but they're not the ones paying for the drugs, or taking them. So competing on, for instance, price is dumb. Doctors may not even know how much the drugs they provide cost, and they don't have much in the way of fiduciary responsibility to insurance companies. Competing on effectiveness is better; I gather that most doctors do care about their patients' health. But at some level the simplest way to sell prescription drugs is to bribe doctors to prescribe them. This is all well known, and bad and illegal. You can't just bribe doctors to prescribe your drugs, come on. So you have to fall back to competing on effectiveness. (Matt Levine, 6/10)

Skyrocketing drug prices are forcing states to take unprecedented measures to rein in health care spending. Vermont just became the nation’s first state to require prescription drug pricing transparency. The New York and Massachusetts attorneys general have launched investigations into major pharmaceutical companies’ and insurers’ drug pricing policies and strategies. These are important steps. But they ignore a key driver of the problem: secondary patents. (Priti Radhakrishnan, 6/14)

Philadelphia tort attorney Stephen Sheller argues in his new book that the 2000 election of George W. Bush brought about what he calls "Pharmageddon," in which pharmaceutical industry CEOs "were permitted to buy elections, purchase state legislatures, appoint judges, and write laws to benefit themselves." Sheller details how both Bush presidents, several of their cabinet members and other appointees acquired stock in Eli Lilly and, in various ways, "were beholden to the industry." Although Sheller makes a compelling case, the pharmaceutical industry has paid politicians to rig the system in its favor long before 2000. (Daniel R. Hoffman, 6/14)

Part B drug payment policy. Boring. Obscure. But an ongoing battle over these policies will affect you — especially what you pay for drugs. Everyone is outraged over exorbitant — and ever-rising — prescription drug prices. Over the last two years drug prices have gone up double digits even when general inflation — and even health care inflation — has been historically low. Politicians have proposed many ideas to curb them: Drug importation from Canada; Medicare drug price negotiation. And in California voters will decide on an initiative that ties what state agencies pay for drugs to the price paid by the Veteran’s Administration, which are among the lowest in the country. (Ezekiel J. Emanuel, 6/9)

The specter of drug pricing can’t seem to disappear from public discourse. On the one hand, this isn’t a bad thing – wanting to tie drug prices (and healthcare prices overall) to some measure of value is a noble goal. But the devil is in the details – and Vermont’s attempt to “do something” on drug pricing moves the needle in the wrong direction. The non-controversial-sounding bill – “An act relating to prescription drugs” – was signed by Governor Shumlin several days ago and sold as “healthcare transparency” legislation. One part of the bill does indeed deal with transparency. Health insurers are required to make information on their formularies easily available and hospitals are required to make cost-sharing information available to affiliated physicians. (Yevgeniy Feyman, 6/10)

There has been a great deal of recent news coverage of Medicare’s proposal for a “value-based” payment program for prescription drugs. Two important ideas are missing from these discussions: The need to increase competition among drug manufacturers by allowing the safe importation of brand name prescription drugs from select countries, and the need to negotiate bulk buying as almost every other western country has been doing for years. (Robert Denz, 6/10)

The pharma industry has an image problem, no doubt, and it’s not just about drug pricing. Underneath the outcry of the past nine months has been a drumbeat of accusations, investigations and settlements with U.S. prosecutors--even some outright arrests and criminal convictions for over-aggressive marketing. Not to mention the opioid epidemic that’s put makers of painkillers on trial for their promotional practices. Top companies and industry advocates have fought back with public comments and, now, beefed-up ad campaigns designed to polish that tarnished reputation. But that’s not enough, argues the Harvard Business Review. Not enough to fix pharma’s reputation, and certainly not enough to fix the underlying problems triggering the scrutiny. So, what if drugmakers radically overhauled their pay structure, too? (Tracy Staton, 6/14)