Hospitals hit back on drug pricing, but will they knock out the problem? – Ernst Berndt

From The Conversation

MIT Sloan Professor Ernst Berndt

MIT Sloan Professor Ernst Berndt

Drug manufacturing and pricing vaulted into the news several years ago when a privately held company raised the price of a drug used for infections from US$13.50 to $750 for one pill.

After an outcry from hospitals, the company later relented, dropping its price by a small margin. Still, this single dramatic increase shed light on the once obscure arena of older generic drugs that continue to be in short supply and whose prices occasionally skyrocket.

Frustrated with these shortages and alarmed by the potential for price gouging, a coalition of hospitals has recently struck back. Four not-for-profit, religiously affiliated hospital systems and the U.S. Veterans’ Administration announced their intent to form a company that would manufacture generic drugs, thereby helping to mitigate or eliminate shortages and prevent future massive price spikes for rarely used generic drugs.

I’m an economist who has studied the health care industry, including the U.S. generic industry, and I see a few regulatory and business hurdles to this approach.

Read More »

We found ways to shorten the turnaround time for diagnosing babies with HIV – Jónas Oddur Jónasson

MIT Sloan Asst. Prof. Jónas Oddur Jónasson

From The Conversation

They say timing is everything. And in sub-Saharan Africa, where roughly a third of untreated HIV infected babies die before they reach the age of one, a timely diagnosis is everything.

According to the latest UNAIDS data, 150, 000 children are infected with HIV in sub-Saharan Africa, annually. Due to the high number of children dying, diagnosing babies with HIV as early as possible is critical.

Public health officials have been grappling with this for many years. How can they reduce the time it takes to get newborns’ blood samples to the diagnostic lab and the test results back? This matters because it determines how soon babies can start medical treatment. The average turnaround time in sub-Saharan Africa often range from one to three months.

In general, shorter turnaround times can be achieved by improving the clinic-to-lab supply chain. This can happen through increasing the number of vehicles equipped to transport samples, hiring enough drivers, training enough medical personnel, buying the right type of diagnostic equipment, and improving communication systems.

African countries like Malawi and Nigeria have done this, with impressive results. Read More »