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16-12-2012 | Article

The week in review, December 9-15, 2012

medwireNews: This week's stories include: Out-of-network clarity; Supreme Court's involvement with pay-for-delay; Obama administration's final say on Medicaid expansion funding; skewed perceptions of health risk based on price; industry bias in clinical trials.

Unclear network pricing

Health issues often occur unexpectedly as do their respective costs. This is especially true in emergency situations when urgency trumps whether or not medical care is within a private insurer's network.

But even under less pressing circumstances, it is difficult for patients to be able to disentangle which medical services and the doctors who provide them are outside an insurers network, resulting in patients paying a larger portion of the bill.

A study looking into this found that unexpected out-of-network costs are a problem that inpatients encounter all too frequently.

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Final say on fair-minded costs

It has become a common occurrence for companies who produce a generic form of a drug to agree to hold off from doing so for a fee that is paid by the patent holding company.

This so-called "pay-for-delay" has been understood by previous courts as a legitimate arrangement that resolves patent litigation. But the Supreme Court will now have the final say when they review and consider whether this "reverse payment" is a possible antitrust maneuver to keep brand name drug prices and profits as high as possible.

Described as the health care reform case of 2013, the ruling will have massive implications on future drug prices.

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For the sake of clarity

Many republican governors have griped about the details and timing of setting up the health exchanges and deciding whether they are going to accept federal funding for Medicaid expansion.

With regard to the expansion, several of these governors have also sought to negotiate with the Obama administration on the extent and nature of this state-level reform.

To address the many questions that governors have raised about the specifics of what states need to do if they are to receive federal backing, the Department of Health and Human Services put out a memo that drew clear lines.

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Judging a health risk by its drug price

When it comes to material goods such as cosmetics, cars, and television sets consumers have a good supply-and-demand understanding of their prices. But when consumers consider the prices of medical goods that have a lifesaving function, the value is not so much one of cost but a health need.

This multifaceted psychology about drug prices will be hugely important as the Affordable Care Act pushes for drug cost transparency to help consumers make health decisions.

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Conflict of interest

Pharmaceutical companies sponsor a large quantity of clinical trials of novel treatments. Some calculations even figure that pharmaceutical companies altogether fund more research than the National Institutes of Health.

When it comes to trusting drug trials that are paid for by those that have a vested interest, studies find that physicians put less weight on clinical research if a pharmaceutical company put up the funding - even if the work was of high quality.

Validating this weariness is a recent review that compared various drug studies and found that industries that have a financial stake in the outcomes of the trials had more favorable results and conclusions.

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By Peter Sergo, medwireNews Reporter