Fossett on the Mess Over Who Will Own California Stem Cell Cures
Discussions over intellectual property are not the usual places where decisions over pricing, coverage, and accessibility get made. These decisions are usually made by public and private payers about particular drugs used to treat particular conditions that have been through clinical trials, received FDA approval for particular uses, and have at least partially known strengths and weaknesses relative to other treatments for the condition. At least as importantly, they take place in the context of particular sets of economic relationships that aren’t the same for all specialties or all drugs. Specialists such as oncologists who administer drugs in their offices, for example, get considerable income from “buy and bill” arrangements under which they buy therapeutic agents and “sell” them to the insurance company paying the bills, usually at a considerable mark-up, while physicians who treat by prescription are less dependent on pharmaceuticals for income. We know none of these things about whatever therapies will emerge from CIRM’s research program and won’t know them for a while, so it’s difficult to say what a “fair” outcome is going to wind up looking like.
Perhaps more importantly, trying to tie product pricing to the award of a research grant really doesn’t address the question of appropriate access because CIRM’s not the one that will be making the decisions about how and whether stem cell therapies will be available under what conditions and to whom, either in California or elsewhere. These decisions will be made by Medicaid programs, Medicare, and private insurance companies; all of whom will be trying to balance access to new treatments with affordability. In typical American fashion, these decisions will likely be made in a decentralized fashion and they won’t be the same everywhere. Jamie Robinson of Berkeley, who’s one of my favorite health economists (that’s a VERY short list), has a great article in the last issue of Health Affairs on how insurance companies are managing the use and cost of the current wave of biopharmaceuticals. There are also several excellent articles in that same issue on Medicare’s attempts to set a reasonable policy for dealing with newly emerging technologies. What’s NOT there, and should be, is any description or assessment of how state Medicaid agencies are making these same determinations. Demands that California get a price break on stem cell therapies are probably unavoidable politically, but advocates who want to insure that lower income groups get appropriate access to these therapies should be looking to Medicaid rather than CIRM to make that happen.
Jim Fossett, AMBI/Rockefeller Institute Federalism and Bioethics Initiative