Arnold Foundation Awards $7.2 Million to Lower Drug Prices

The Laura and John Arnold Foundation has awarded grants totaling $7.2 million to four organizations in support of efforts to make prescription drugs more affordable in the United States, the Wall Street Journal reports.

The grants will fund research and pilot projects designed to expand payment arrangements in which insurers and government health programs pay drug companies based on how well a treatment works in patients, rather than on the volume of medicines sold. Recipients include a project led by Peter Bach, head of Memorial Sloan Kettering Cancer Center's Center for Health Policy and Outcomes, which received $4.7 million over three years to enlist payers and manufacturers to test pricing that is more closely linked to a drug's value; and the Center for Evidence-based Policy at Oregon Health and Science University, which was awarded $1.6 million to examine how state-run Medicaid programs try to control drug prices and explore pilot programs that tie Medicaid reimbursement for drugs to improved patient health.

The foundation also awarded $748,445 to Brigham & Women's Hospital in Boston for a year-long project that will evaluate the effectiveness of federal incentives for drug development, and $200,000 to the National Academies of Sciences' Institute of Medicine in support of the development of policy recommendations aimed at making it easier for patients to access affordable drugs.

"Increased drug costs are really taking a significant toll on state budgets," Pam Curtis, director of the Center for Evidence-based Policy, told the Journal. "We see states reallocating resources for blockbuster, high-cost drugs, and that results in a squeeze in some other part of Medicaid."