Frontiers in Health Policy Research.

• Position: Conferences

The NBER's seventh annual conference on "Frontiers in Health Policy Research," organized by David M. Cutler, NBER and Harvard University, and Alan M. Garber, NBER and Stanford University; took place on June 6 in Washington, DC. The program was:

Patricia M. Danzon, NBER and University of Pennsylvania, and Jonathan D. Ketcham, University of California, Berkeley "Reference Pricing of Pharmaceuticals: Evidence from Germany, the Netherlands, and New Zealand"

Mark V. Pauly, NBER and University of Pennsylvania, "Adverse Selection and the Challenges to Stand-Alone Prescription Drug Insurance"

Wiliam H. Crown and Jonathan Maguire, Medstat; Ernst Berndt, NBER and MIT; and Kenneth E. Haver and Whitney P. Witt, Massachusetts General Hospital, "Benefit Plan Design and Prescription Drug Utilization Among Asthmatics: Do Patient Copayments Matter?"

Jay Bhattacharya, NBER and Stanford University; David M. Cutler; Dana Goldman, Michael Hurd, and Darius Lakdawalla, NBER and Rand Corporation; and Constanjin Panis, Rand Corporation, "Disability. Forecasts and Future Medicare Costs"

Nancy Beaulieu, NBER and Harvard University, "Health Plan Conversions: Are they in the Public Interest?"

Danzon and Ketcham describe three prototypical systems of therapeutic reference pricing (RP) for pharmaceuticals--Germany, the Netherlands, and New Zealand--and examine their effects on: the availability of new drugs; manufacturer prices, reimbursement levels, and out-of-pocket surcharges to patients; and market shares of originator and generic products. The results differ across countries in predictable ways, depending on system design and other cost control policies. The most aggressive RP system has severely limited the availability of new drugs, particularly more expensive drugs, disproportionately reduced reimbursement and sales for originator products, and exposed patients to out-of-pocket costs. The authors find little evidence that therapeutic referencing has stimulated competition.

Pauly investigates a possible predictor of adverse selection problems in unsubsidized "stand-alone" prescription drug insurance: the persistence of an individual's high spending over multiple years. Using MEDSTAT claims data and data from the Medicare survey of Current Beneficiaries, he finds that persistence is much higher for outpatient drug expenses than for other categories of medical expenses. He then uses these estimates to develop a model of adverse selection in competitive insurance...