Drug Pricing, Broken Incentives, and the 340b program Fixes Washington Won't Touch

Episode SummaryRyan Long — former senior policy advisor to Speaker Kevin McCarthy and current non-resident senior scholar at the USC Schaefer Institute — joins Drs. Koka and DiGiorgio for a deep dive into the structural failures driving American drug pricing. The conversation covers the list-to-net price bubble and why patients pay cost-sharing on a fictitious number, how the IRA's price-setting mechanism disincentivizes both new drug development and subsequent indications, and why the 340B program — sold politically as a lifeline for safety net hospitals — systematically funnels the most money to wealthy health systems with high commercial payer mixes. Long argues the fix isn't tweaking the formula; it's scrapping the drug arbitrage mechanism entirely and replacing it with a direct, transparent grant program that actually reaches the hospitals that need it.Chapter Markers00:00 Introduction — Ryan Long's 25 Years in Health Policy02:08 Drug Pricing 101: List Price vs. Net Price and Why It Matters06:39 GLP-1s as a Case Study: Insurance Pullback and the Price War That Followed11:17 The Medicare Bridge Program and Government Price Setting for GLP-1s14:11 Why Drug Companies Set List Prices High at Launch16:10 The Inflation Reduction Act: Price Controls, Rebate Penalties, and Innovation Risk20:57 Brand-to-Brand Competition and the FDA's Role28:52 GLP-1s Under Medicare: Is the $50/Month Bridge Program Good Policy?36:50 The Medicaid Drug Rebate Program and the Best Price Provision38:08 The Origins of 340B: What the Program Was Actually Designed to Do42:24 Qui Bono — How 340B Revenue Is Really Generated50:17 Contract Pharmacies and the For-Profit Middlemen in 340B56:31 The Humira Biosimilar Case and the Rebate Trap1:02:58 The 1987 Supreme Court Case That Supercharged the Rebate Structure1:05:26 Broad Reform Proposals: From 340B Overhaul to Consolidation1:09:19 Closing Thoughts and Where to Find Ryan's WorkCo-Host Handles@anish_koka and @drdigiorgioShow Handle@drsloungepodSubscribe LinksSpotify: https://open.spotify.com/show/44vw8eirsKKnjgNIrdDvrRApple Podcasts: https://podcasts.apple.com/us/podcast/the-doctors-lounge/id1832097658YouTube: https://www.youtube.com/@TheDoctorsLoungePod