On medication waste

Kaiser Health News reported on inaction with regards to drugs that the federal government pays for but are thrown away. Against the backdrop of rising drug costs, policymakers realized that valuable drugs were being discarded because of packaging constraints. The issue is that different patients need different amounts of medication (for example, some prescription amounts might vary with body weight), and that once opened, the packaging cannot be resealed to save the drug for future use. Medicare pays for each dose, so extra medication is discarded. That might not sound like a big deal, but when a single dose can cost thousands of dollars, the value of the extra medication can add up -- one 2016 study estimated about $2.8 billion of drug waste annually.

Drug manufacturers could address the challenge in a number of ways. For example, manufacturers could sell a variety of vial sizes so that a more appropriate dose could be selected per patient. Alternatively, manufacturers could simply sell small doses (perhaps a fourth of the current size, adjusting the price accordingly), and some patients could receive multiple vials' worth of medication as a "dose." More work would be to research how the medication could be preserved across multiple openings of the packaging. For now, manufacturers seem to have chosen the path that is easiest (and probably most profitable) for them: sell larger vials that can serve the vast majority of patients. Their strategy could also make sense if they take the position that the marginal cost of the incremental amount of medication is negligible and that their costs are really fixed costs (e.g. research and development) or per vial (e.g. packaging). In that case, Medicare could perhaps save money if it were able to order large vats of medication and repackage them into smaller vials in an appropriate environment (e.g. sterile and inert).

What Kaiser Health News highlights in its article is mostly about the lack of disclosure of financial conflicts of interest among the researchers who were paid by the federal government to study the issue. One report generated suggested a "whole of government" approach which seems to suggest a larger effort from the government to facilitate the development of medications for reusable packaging, which seems like it would take much longer to develop than to negotiate other solutions. Indeed, it seems suspicious that the report apparently discourages the tracking of waste, which is a position that drug manufacturers -- which have other financial relationships with the researchers -- would prefer (less visibility into the issue). One researcher defended that particular point by suggesting that Medicare's efforts to reduce drug waste might be nullified if drug manufacturers simply raised prices. That leads into a separate discussion of Medicare's inability to negotiate with drug manufacturers regarding pricing. Regardless, Kaiser Health News' point stands: researchers and their institutions (in this case, The National Academy of Science) should clearly disclose financial conflicts of interest, especially on papers that might affect policy.