EP426: Cost Containment Versus Value-based Drug Purchasing, With Nina Lathia, RPh, MSc, PhD

In this episode of 'Relentless Health Value,' host Stacey Richter discusses with Nina Lathia the complex debate between cost containment and value-based drug purchasing strategies. They delve into the negative impacts of poor pharmacy benefit strategies, such as increased healthcare costs, bankruptcies, and reduced member satisfaction. They explore why employers struggle with value-based purchasing due to factors like lack of price negotiation power, siloed pharmacy spending, short-term actuarial horizons, and FDA's approval based on limited evidence. The episode provides actionable advice on establishing a value-based formulary, including having a clear goal, considering overall healthcare spend, understanding drug value-based pricing, exploring risk-sharing agreements, and ensuring effective communication with plan members. Lathia, a pharmacist and consultant with a Ph.D. in health economics, shares her expertise on making evidence-based drug purchasing decisions that balance cost and clinical effectiveness. === LINKS === 🔗  Show Notes with all mentioned links:   https://cc-lnk.com/EP426 ✉️  Enjoy this podcast? Subscribe to the free weekly newsletter: https://relentlesshealthvalue.com/join-the-relentless-tribe 🫙  Support the podcast with a small donation to the Tip Jar: https://relentlesshealthvalue.com/join-the-relentless-tribe 🎤  Listen on Apple Podcasts  https://podcasts.apple.com/us/podcast/feed/id892082003?ls=1 🎤  Listen on Spotify  https://open.spotify.com/show/6UjgzI7bScDrWvZEk2f46b 📺  Subscribe to our YouTube channel   https://www.youtube.com/@RelentlessHealthValue === CONNECT WITH THE RHV TEAM === ✭ LinkedIn   https://www.linkedin.com/company/relentless-health-value/ ✭ Threads  https://www.threads.net/@relentlesshealthvalue/ ✭ Bluesky   https://bsky.app/profile/relentleshealth.bsky.social ✭ X   https://twitter.com/relentleshealth/   06:34 What does cost containment mean? 07:43 Why is it important to consider health outcomes? 10:00 What does value-based purchasing mean in Pharma? 11:09 What are the principles of cost-effectiveness analysis? 12:50 Pharmacy plan time horizons versus employer time horizons. 14:42 Why is it increasingly important for payers to take a more global look at health and cost outcomes? 16:14 Why is the first step establishing a value-based price for drugs? 16:43 Why is the second step thinking about risk-sharing agreements with manufacturers? 18:57 LinkedIn article by Bryce Platt, PharmD. 19:20 What should an employer do if there's only one drug option and the price is too high? 21:20 What's a specialty carve-out solution? 21:26 EP352 and EP353 with Pramod John, PhD, of VIVIO. 22:10 Why should employers get more comfortable with saying "no" to certain drugs? 25:36 Why is patient engagement key? 28:23 What does "good" look like for employers implementing drug-spend changes? 29:51 EP337 with Olivia Webb.