Regulating innovation

Paul Demko reports:

[CMS] wants to require insurers to establish “pharmacy and therapeutics” committees that would meet at least four times a year to review drug formularies. […]

If an insurer rejects a customer’s request, under the proposed rule the individual would have the right to appeal that decision to an independent panel.

In addition, the agency offered more insight into what might constitute discrimination when it comes to drug formularies. For example, if a health plan places most or all drugs that treat a specific condition on the highest cost tier, the CMS warned that it would likely constitute discrimination. […]

The CMS indicated that it is also considering a requirement that plans post data on provider networks and drug formularies in a “machine-readable file.” That would allow third parties to extract the data and use it to create tools to help consumers make informed choices about what products will meet their needs.

This is relevant to two points I’ve made before: (1) There is good innovation and bad innovation. (2) For this very reason, there is a tension between innovation and consumer protection.

(Finally, I do not like “the CMS,” but I do not dispute that there’s a sense in which it is grammatically correct. There is good grammatical innovation and bad grammatical innovation …)



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