Price fixing is not OK when you want to do it but is OK when I want to do it.

The NYT reports a story this morning on attempts of the state of Massachusetts to rein in the growth of spending on prescription drugs. Nothing new or surprising here. Medicaid costs are growing and projections across the board for all states are that if nothing different is done , Medicaid costs will crowd out all other state spending over the next 10-20 years.

The Massachusetts experiment is contingent upon getting a Medicaid waiver from the Feds. Seems reasonable given the basic premise of the waiver concept. Try things in a limited space and if they work, they can be adopted elsewhere. What is difficult to understand is the push back and particularly where the push back is coming from. The AMA, ACP, and the ACS, as well as a number of big pharmaceutical firms (J&J, Merck, Lilly, Teva, and Pfizer)  are pushing back against this proposal.

I get the drug companies resistance. They desire the largest degrees of freedom to push their pricing power. They may say they are motivated by getting the best drugs to patients and that may be true to some extent. We should not be so naive to believe that is their primary motivation. However, the MD professional societies are another matter, especially the AMA. Here you have an organization that is behind the largest price fixing apparatus in a segment of the economy that constitutes nearly 20% of GDP.

The mantra is that such efforts will limit patient access to life saving therapies. However, the ongoing price fixing actions of the AMA have limited patient access to life saving expertise for more than 25 years. We still allow for pharmaceuticals to be priced at various tiers based upon a host of factors but according to the AMA, all expertise is generic and linked to common billing codes which do not account for quality or unique expertise. That is entirely acceptable even though it has devastating effects on access to expertise, especially diagnostic expertise or chronic care management.

In digging deeper into the AMA position, I found this news story from Axios last October. It almost defies comprehension. (Axios Link)

Context: McAneny, an oncologist, made her comments in Chicago at a meeting of the AMA's Relative Value Scale Update Committee, an influential panel known as the RUC. A crowd member asked her if the AMA was "missing an opportunity to throw the weight of our collective influence" behind asking the federal government to negotiate drug prices, which Medicare cannot do by law.  The AMA has been outspoken about rising drug prices and the factors behind them. "There's a lot of places where we can look at significant amounts of waste," McAneny said after calling out pharmacy benefit managers, insurance companies and specialty pharmacies.

However, official AMA policy currently "opposes the use of price controls in any segment of the health care industry, and continues to promote market-based strategies to achieve access to and affordability of health care goods and services." Instead, it backs transparency measures like requiring drug companies to post prices in ads.

Looking ahead: The RUC's main business of examining new payment rates for physician services starts Thursday. Medicare has said it would adopt nearly all of the RUC's recommendations for the upcoming year.

Here we had the AMA President railing against price fixing at the meeting of the AMA RUC, their own price fixing entity.