James Robinson receives grant to research US infused drug prices

photo of James Robinson, PhD, MPH
Campus professor James Robinson was awarded grant money to analyze data regarding drug prices in the United States, which are often greatly increased by hospitals for profit.

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Campus public health professor James Robinson was awarded a $49,000 grant to research the prices of infused drugs in the United States on Jan. 1.

Unlike traditional drugs that can be purchased at a pharmacy, infused drugs are administered in hospitals and physicians’ offices, usually through non-oral methods, according to Robinson. Infused drugs are typically used to treat serious conditions such as cancer, rheumatoid arthritis and multiple sclerosis, Robinson added. His research will focus on understanding how much hospitals charge for these drugs and the reasons behind their pricing.

Robinson will collaborate with UC San Francisco professor Sanket Dhruva and RAND Corporation policy researcher Christopher Whaley.

“​​On the one hand, prices create profits for drug companies, which then invest some of those profits in research and development and generate new drugs,” Robinson said. “On the other hand, high prices are bad from the point of view of patients and insurers that pay for these drugs because it creates budgetary stress and, for patients, cost-sharing obstacles to getting the care that they need.”

According to Robinson, there is a chain of transactions that occurs in order to administer drugs to patients. Hospitals, which serve as a middleman, first purchase the drugs from pharmaceutical companies and then charge insurance companies and patients, often with a substantial price markup.

When hospitals raise prices to patients and insurance companies, their profits do not go to pharmaceutical companies, Robinson said. Robinson warned that this limits innovation for pharmaceutical companies who generally rely on their profits to invest in research and development for new drugs.

“These drugs have become a major profit center for hospitals,” Robinson said. “That raises the cost of drug treatment without increasing the revenues available for drug innovation.”

Robinson’s research will work with a national dataset of insurance claims for several hundred thousand patients from the federation of insurance companies Blue Cross Blue Shield. The dataset will include information about prices that hospitals charge patients and Blue Cross Blue Shield, particularly for drugs that treat complex inflammatory and autoimmune conditions such as rheumatoid arthritis.

The research grant was awarded by the National Institute for Health Care Management Foundation, according to a press release from campus’ School of Public Health. Robinson said the funding will be used to hire data science students to work with the large dataset and conduct statistical analyses on the data.

“Public policy is really a matter of balancing those two competing objectives: innovation and access,” Robinson said.

Contact Amudha Sairam at [email protected] and follow her on Twitter at @AmudhaSairam.