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sherrirose@stanford.edu
Professor, Health Policy
Professor, Computer Science (by courtesy)
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PhD
Sherri Rose, Ph.D. is a Professor of Health Policy and, by courtesy, of Computer Science at Stanford University, where she is Director of the Health Policy Data Science Lab. Her research is centered on developing and integrating innovative statistical machine learning approaches to improve human health and health equity. Within health policy, Dr. Rose works on ethical algorithms in health care, risk adjustment, chronic kidney disease, and health program evaluation. She has published interdisciplinary projects across varied outlets, including Biometrics, Journal of the American Statistical Association, Journal of Health Economics, Health Affairs, and New England Journal of Medicine. In 2011, Dr. Rose coauthored the first book on machine learning for causal inference, with a sequel text released in 2018.
Dr. Rose has been honored with an NIH Director’s Pioneer Award, NIH Director's New Innovator Award, the ISPOR Bernie J. O'Brien New Investigator Award, and multiple mid-career awards, including the Gertrude M. Cox Award. She is a Fellow of the American Statistical Association (ASA) and received the Mortimer Spiegelman Award, which recognizes the statistician under age 40 who has made the most significant contributions to public health statistics. In 2024, she received both the ASHEcon Willard G. Manning Memorial Award for Best Research in Health Econometrics and the ASA Outstanding Statistical Application Award. She was recently awarded the Open Science Champion Prize by Stanford University. Her research has been featured in The New York Times, USA Today, and The Boston Globe. She was Co-Editor-in-Chief of the journal Biostatistics from 2019-2023.
She received her Ph.D. in Biostatistics from the University of California, Berkeley and a B.S. in Statistics from The George Washington University before completing an NSF Mathematical Sciences Postdoctoral Research Fellowship at Johns Hopkins University.
Current Position: Vascular Surgery Integrated Resident at Stanford
Elizabeth has interests in identifying high-value surgical care, the impact of frailty on surgical outcomes, gender and racial/ethnic disparities in access to and outcomes following vascular surgery, and the epidemiology and evolution of surgical vascular disease in the United States
Owning a handgun is associated with a dramatically elevated risk of suicide, according to new Stanford research that followed 26 million California residents over a 12-year period. The higher suicide risk was driven by higher rates of suicide by firearm, the study found.
Men who owned handguns were eight times more likely than men who didn’t to die of self-inflicted gunshot wounds. Women who owned handguns were more than 35 times more likely than women who didn't to kill themselves with a gun.
While prior studies have found higher rates of suicide among people who live in homes with a gun, these studies have been relatively small in scale and the risk estimates have varied. The Stanford study is the largest to date, and it’s the first to track risks from the day of an owner’s first handgun acquisition.
“Our findings confirm what virtually every study that has investigated this question over the last 30 years has concluded: Ready access to a gun is a major risk factor for suicide,” said the study’s lead author, David Studdert, LLB, ScD, MPH, professor of medicine at Stanford Health Policy and of law at Stanford Law School.
The study published in The New England Journal of Medicine analyzed data on handgun acquisitions and deaths in a cohort of 26.3 million adult residents of California who had not previously owned handguns. The researchers followed the cohort from 2004 through 2016, and compared death rates among those who did and didn’t acquire handguns, with a particular focus on suicides by firearm versus other methods.
More than 1.4 million cohort members died during the study period. Nearly 18,000 of them died by suicide, of which 6,691 were suicides by firearms.
Often Impulsive Acts
“Suicide attempts are often impulsive acts, driven by transient life crises,” the authors write. “Most attempts are not fatal, and most people who attempt suicide do not go on to die in a future suicide. Whether a suicide attempt is fatal depends heavily on the lethality of the method used — and firearms are extremely lethal. These facts focus attention on firearm access as a risk factor for suicide especially in the United States, which has a higher prevalence of civilian-owned firearms than any other country and one of the highest rates of suicide by firearm.”
There were 24,432 gun suicides in the United States in 2018, according to the Centers for Disease Control and Prevention. Three-quarters of them involved handguns.
Handgun ownership may pose an especially high risk of suicide for women because of the pairing of their higher propensity to attempt suicide with access to and familiarity with an extremely lethal method.
Yifan Zhang, PhD
PhD, SHP biostatistician
The Stanford study took advantage of the unusually comprehensive body of information on firearm sales in California. All lawful gun purchases and transfers must be transacted through a licensed firearms dealer, who then relays the information to the state’s Department of Justice, where it is archived. The research team obtained records of all firearm acquisitions dating back to 1985, then linked them to death records.
The researchers found that people who owned handguns had rates of suicide that were nearly four times higher than people living in the same neighborhood who did not own handguns. The elevated risk was driven by higher rates of suicide by firearm. Handgun owners did not have higher rates of suicide by other methods or higher rates of death generally.
The researchers said the very high risk of suicide for female handgun owners, relative to female nonowners, was particularly noteworthy. It has long been known that women attempt suicide more frequently than men but have fewer completed suicides. The standard explanation is that the methods women tend to use are less lethal than those men tend to use. However, the study showed that this is not true for female gun owners.
“Women in our cohort who owned guns and died by suicide usually used a gun,” said Yifan Zhang, PhD, a biostatistician at Stanford Health Policy and co-author of the study. “Handgun ownership may pose an especially high risk of suicide for women because of the pairing of their higher propensity to attempt suicide with access to and familiarity with an extremely lethal method.”
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Disentangling Competing Explanations
One major challenge with studies examining the relationship between gun access and suicide risk has been determining whether people who purchase handguns already have plans in place to harm themselves, or whether the presence of a handgun creates new risks.
The unique, longitudinal nature of the Stanford study helped to disentangle these competing explanations.
“There appears to be some of both happening,” said senior author Matthew Miller, professor of health sciences and epidemiology at Northeastern University. “New handgun buyers had extremely high risks of dying by firearm suicide immediately after the purchase. However, more than half of all firearm suicides in this group occurred a year or more later. Consistent with prior work, our findings indicate that gun access poses a substantial and enduring risk.”
Other Stanford co-authors of the study are research analyst Lea Prince, PhD, and research assistant Erin Holsinger, MD — both at Stanford Health Policy; and Jonathan Rodden, PhD, professor of political science.
Researchers at Erasmus University, in the Netherlands, and the University of Melbourne, in Australia, also contributed to the work.
The research was supported by the Fund for a Safer Future and the Joyce Foundation, as well as Stanford Law School and the Stanford University School of Medicine.
David Studdert
Professor of Medicine and Law
Studdert is an expert in health law and empirical legal research.
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Mass Shootings: Public Face of a Much Larger Epidemic
Men who own handguns are eight times more likely to die of suicide by handgun than men who don’t have one — and women who own handguns are 35 times more likely than women who don’t, according to startling new research led by SHP's David Studdert.
Most of the stillbirths that occur around the world are among women who live in low- and middle-income countries. Some 2.5 million women suffer the heartbreaking loss each year.
Yet determining the causes and prevention of stillbirths has largely been ignored as a global health priority — the incidence not even included in the WHO Millennium Development Goals.
Stanford Health Policy’s Rosenkranz Prize Winner, Ashley Styczynski, MD, MPH, discovered the alarmingly high level of stillbirths while working in Bangladesh as a 2019-2020 Fogarty Fellow, studying antimicrobial resistance in newborns in the hospitals there.
The $100,000 Rosenkranz Prize is awarded to a Stanford researcher who is doing innovative work to improve health in the developing world.
“I was surprised to learn that the rates of stillbirths were comparable to sub-Saharan Africa and that in many cases they had no idea of the cause,” Styczynski said in a Skype call from Dhaka, where she has been living for eight months while conducting her antimicrobial resistance research.
Rosenkranz Prize Winner Ashley Styczynski takes specimen samples with women in Dhaka, Bangladesh, for her research on antimicrobial resistance in newborns. This research led to her prize-winning proposal to investigate the alarmingly high rate of stillbirths in the South Asian nation.
The South Asian nation is among the top 10 countries with the highest number of stillbirths, with an average of 25.4 stillbirths per 1,000 births. Studies have implicated maternal infections as the cause; one ongoing study in Bangladesh has recovered bacteria from blood samples in stillborn babies in whom no prior maternal infection was suspected.
Styczynski believes intrauterine infections may be an underrecognized factor contributing to the excess stillbirths in Bangladesh. She intends to perform metagenomic sequencing on placental tissues of stillborn babies, a process that will allow her to examine the genes in the organisms of those tissues and evaluate the bacterial diversity.
“The alternative hypothesis would be that stillbirths are caused by non-infectious etiologies, which I will be assessing through interviews,” Styczynski wrote in her Rosenkranz application.
Those interviews will be with mothers to evaluate for frequency of infectious symptoms during pregnancy, including fever, rash, cough, dysuria and diarrhea, as well as possible toxin exposures. She will compare the findings with the metagenomic sequencing results to determine how frequently potential pathogens may be presenting as subclinical infections.
My goal is to reduce excess stillbirths by identifying risk factors and pathogens that may be contributing to stillbirths and, ultimately, to design prevention strategies.
Ashley Styczynski
Rosenkranz Prize Winner
“By applying advanced technologies and software platforms, this research will not only enhance our understanding of causes of stillbirths in Bangladesh, but it may also provide insights into causes of early neonatal deaths," Styczynski said.
Bangladesh, one of the poorest and most densely populated nations in the world, offers a rich variety of emerging and known diseases that go undetected.
“The panoply of infections that could contribute to stillbirths is really unknown,” Styczynski said. “That’s why metagenomics is a great tool here. It just hasn’t been accessible here because of the expense. Now this tool will begin to unpack what’s causing these stillbirths.”
The Rosenkranz Prize was started and endowed by the family of the late Dr. George Rosenkranz, who devoted his career to improving health-care access across the world and helped synthesize the active ingredient for the first oral birth control pill.
“No one is more deserving of the Rosenkranz Prize than Dr. Ashley Styczynski”, said Dr. Ricardo Rosenkranz. “Because of her tenacity, originality and focus, Dr. Styczynski exemplifies the ideal Rosenkranz Prize recipient. She has chosen an often overlooked adverse outcome that may prove to be mitigated by her findings. As a neonatologist interested in health disparities, I fully realize the potential relevance and urgency of her work and am excited to see it come to fruition. As the son of George Rosenkranz, for whom this prize is lovingly named, I know that my father would appreciate Dr. Styczynski’s pioneering spirit as well as her desire to affect global positive change by improving medical outcomes in vulnerable communities. We can’t wait to celebrate her work back at Stanford in the near future."
Sheltering in Place
Styczynski spoke from her flat in Dhaka, where she has been confined for three weeks as the world’s third-most populated city prepares for the onslaught of the coronavirus. The country is on lockdown; no international flights in or out.
As of Thursday, there were 1,572 cases in Bangladesh and 60 deaths, according to the widely used Johns Hopkins Coronavirus Map.
But Styczynski believes that’s about 1% of the actual disease activity in the country because testing was so slow to start. She said there is great stigma in the country over testing — red flags are put on the homes of those who have been diagnosed with COVID-19 — because it breaks up the unity of families and the surrounding community. Health-care workers are being kicked out of apartments by frightened landlords and people are afraid to use the health-care system for fear of infection.
“So, the hospitals are quite empty — more so than they’ve ever been,” she said.
Styczynski likened it to waiting for the tsunami that you know is coming.
“That’s why I wanted to jump in to stave off the morbidity and mortality that will be inundating one of the most populated countries in the world,” she said. Some 165 million people are packed into 50,250 square miles — a land mass about the same size as New York State, which has some 19.5 million people.
Ashley Styczynski goes through a thermoscanner was when I was testing out the triage system at an upazila health complex.
The Centers for Disease Control and Prevention (CDC) has a small team of four people working in Bangladesh. Having spent two years as an Epidemic Intelligence Service Officer at the CDC, Styczynski has now joined its Bangladesh team and is also working with the infection prevention and control team of the International Centre for Diarrhoeal Disease Research, Bangladesh.
“Many people here in Dhaka live in high-density apartments with six to 12 people living in the same room,” she said. “How do you isolate when you have a one-room home?”
Ninety percent of the population are daily wage earners, Styczynski noted, who say they’d rather take their chances with coronavirus than die of starvation.
They take those chances at great risk. There is one ventilator for every 100,000 people in Bangladesh and the district hospitals have maybe one to two days of oxygen supply, Styczynski said.
They started out training military hospitals on medical triage, quarantine and isolation, and infection prevention strategies.
“We’ve also been going to some district hospitals to assess some of the challenges they are facing and to identify some of the gaps in preparedness so that we can communicate back to the Ministry of Health how they can better support these district hospitals,” she said.
Her pandemic travels to the district hospitals and preparedness work has allowed her to gather contextual data for her colleagues back at Stanford who are working to address the lack of personal protective equipment (PPE) in low-resourced countries.
“We hope we can generate some evidence very quickly so that we can share some of this information to better protect health-care workers in other low-resource countries,” she said.
Despite her research being temporarily sidelined, Styczynski is upbeat.
“This is what I signed up for as a Fogarty fellow, to help build local capacity,” she said. “But I am also an infectious disease specialist, and these are the types of situations we run towards rather than away from. We build our career for moments like these.”
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Ashley Styczynski (center) evaluating the set-up in one military hospital in Dhaka in preparation for COVID patients. There is only one ventilator available for every 100,000 people in the South Asian nation.
Ashley Styczynski
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Subtitle
Stanford postdoc Ashley Styczynski will investigate the epidemiology behind the alarmingly high rate of stillbirths in Bangladesh while helping prepare for the coming onslaught of coronavirus in the densely populated South Asian nation.
(This is excerpted from a story from The Mercury News.)
Long motorcades of volunteers converged at three Stanford University research sites this week, donating blood for a new test that identifies the prevalence of coronavirus in our community – and could help reveal the full scope of Santa Clara County’s epidemic.
The 2,500 test slots on Friday and Saturday filled up within hours, as news of the project — the first large scale study of its type in the U.S. — spread quickly through the county, according to this Mercury News story.
The test detects protective antibodies to the virus rather than the virus itself. This gives scientists a snapshot of how many people in the county have already been infected, but weren’t seriously sick and didn’t realize it. And it tells residents whether they carry potentially protective antibodies – so may be immune to future infection.
“This is critical information,” said principal investigator Eran Bendavid, an infectious disease specialist and associate professor of medicine with Stanford Health Policy. “We will show the country what to do and how to do it,” he said.
The project, coordinated with the Santa Clara County Department of Health, was applauded by Gov. Gavin Newsom during a Saturday press conference in Sacramento, who called it “the first home-grown serum test in the state of California.”
As we watch President Trump tell the states they have to do more to find their own personal protective equipment for their health-care workers, governors lash back with demands for a national leader who will unlock the emergency powers of the federal government.
The response to the COVID-19 pandemic has exposed major weaknesses in the federalist system of public health governance, which divides powers among the federal, state and local governments, argues SHP’s Michelle Mello in this New England Journal of Medicinecommentary.
The coronavirus, she writes, “is exactly the type of infectious disease for which federal public health powers and emergencies were conceived: it is highly transmissible, crosses borders efficiently, and threatens our national infrastructure and economy.”
“Strong, decisive national action is therefore imperative,” writes Mello, a professor of medicine and a professor of law, and Rebecca L. Haffajee, a policy researcher at the RAND Corporation. “Yet the federal response has been alarmingly slow to develop, fostering confusion about the nature of the virus and necessary steps to address it.”
The authors warn this “lack of interjurisdictional coordination has and will cost lives.”
Though states must respect constitutionally protected individual rights — such as due process, equal protection and freedom of travel and association — the Constitution puts primary responsibility for public health with the states, cities and counties. It gives them the right to exercise broad police powers to protect their citizens’ health during ordinary times.
In extraordinary times — like the one we’re experiencing now — states and the federal government can activate emergency powers to expand their abilities to act swiftly and protect human life and health. All 50 states and dozens of localities and the federal government have declared emergencies.
“The resulting executive powers are sweeping: they can range from halting business operations, to restricting freedom of movement, to limiting civil rights and liberties, to commandeering property,” Mello and Haffajee write in the NEJM Perspective.
This emergency legal framework has led to too few checks-and-balances on poor decisions—historically, in the direction of being overly aggressive, write the authors. They note a good example is when New Jersey’s governor ordered a nurse returning from Sierra Leone during the 2014 Ebola outbreak into quarantine, contrary to Centers for Disease Control and Prevention guidelines.
Too Little Too Late?
“Today, we find ourselves in the opposite situation: the federal government has done too little,” the authors write. “Perhaps because of misleading early statements from federal officials about the gravity of the COVID-19 threat, public sentiment has weighed against taking steps that would impose hardships on families and businesses.”
The tumbling stock market and unprecedented 10 million unemployment claims last month also have created further pressure by the federal government to project a sense of calm.
“The resulting laconic federal response has meant that a precious opportunity to contain COVID-19 through swift, unified national action has been lost — a scenario that mirrors what occurred in Italy,” they write.
So the states had to pick up where the federal government fell short, the authors note. Many jurisdictions issued stay-at-home orders; others did not. As of March 31, more than a dozen governors had yet to issue statewide stay-at-home orders and eight had only ordered partial measures. Yet many jurisdictions turn a blind eye, they note, to noncompliance with social-distancing recommendations issued by the CDC, as evidenced by crowded beaches and children congregating in public parks.
“This is the dark side of federalism: it encourages a patchwork response to epidemics,” the authors write.
“A federal takeover of all public health orders would be out of step with our federalist structure,” the authors state, but there remain three good options:
“The White House must reverse its current trajectory toward prematurely weakening existing federal measures and the resolve of governors who are enforcing stay-at-home orders and school closures.” Trump said last week he wanted the United States “opened up and raring to go by Easter.” A few days later, he heeded the call of medical experts and extended social-distancing guidelines until the end of April, but public health experts believe the crisis will likely be with us longer.
Congress should “use its spending power to further encourage states to follow a uniform playbook for community mitigation that includes measures for effective enforcement of public health orders.” It could threaten to withhold some federal funds from states that do not comply.
“Congress could leverage its interstate-commerce powers to regular economic activities that affect the interstate spread” of COVID-19, such as restricting large businesses from traveling and operating across state lines in ways that expose workers to risk.
The White House could also make further use of the Defense Production Act (DPA) to direct private companies to produce badly needed ventilators and personal protective equipment for health-care workers, the authors write. Trump has ordered General Motors to manufacture ventilators and the $2 trillion stimulus package includes $1 billion for DPA projects.
“Learning is difficult in the midst of an emergency, but one lesson from the COVID-19 epidemic is already clear: when epidemiologists warn that a pathogen has pandemic potential, the time to fly the flag of local freedom is over,” the authors conclude. “Yet national leadership in epidemic response works only if it is evidence-based. It is critical that the U.S. response to COVID-19 going forward be not only national, but rational.”
"If it’s true that the novel coronavirus would kill millions without shelter-in-place orders and quarantines, then the extraordinary measures being carried out in cities and states around the country are surely justified. But there’s little evidence to confirm that premise—and projections of the death toll could plausibly be orders of magnitude too high.
"Fear of Covid-19 is based on its high estimated case fatality rate — 2% to 4% of people with confirmed Covid-19 have died, according to the World Health Organization and others. So if 100 million Americans ultimately get the disease, 2 million to 4 million could die. We believe that estimate is deeply flawed. The true fatality rate is the portion of those infected who die, not the deaths from identified positive cases."
"The latter rate is misleading because of selection bias in testing. The degree of bias is uncertainbecause available data are limited. But it could make the difference between an epidemic that kills 20,000 and one that kills 2 million. If the number of actual infections is much larger than the number of cases—orders of magnitude larger—then the true fatality rate is much lower as well. That’s not only plausible but likely based on what we know so far."
NEW YORK, NY - MARCH 24: Doctors test hospital staff with flu-like symptoms for coronavirus (COVID-19) in set-up tents to triage possible COVID-19 patients outside before they enter the main Emergency department area at St. Barnabas hospital in the Bronx on March 24, 2020 in New York City. New York City has about a third of the nation’s confirmed coronavirus cases, making it the center of the outbreak in the United States. (Photo by Misha Friedman/Getty Images)
As the deaths and detected cases from the COVID-19 epidemic continue to rise globally, government planners and policymakers require projections of its future course and impacts. They also need to understand how potential interventions might “flatten the curve.”
“It’s important to understand these overall effects by geographic area, demographic group, and for special populations like health-care workers,” says Stanford Health Policy’s Jeremy Goldhaber-Fiebert, who will be teaching a new class in the spring on infectious disease modeling with Stanford Medicine’s Jason Andrews. “Doing this requires mathematical models that incorporate the best available clinical, epidemiological, and policy data along with their associated uncertainties — the state-of-the-art of infectious disease modeling.”
Goldhaber-Fiebert and Andrews will debut the new course, Models for Understanding and Controlling Global Infectious Diseases (HUMBIO 154D for undergrads and HRP204 for graduate students) in the upcoming spring quarter. Stanford Provost Persis Drell announced last week that all spring courses at the university will now be taught online and pushed the start of the new quarter April 6.
Andrews is an infectious disease physician and assistant professor of medicine and Goldhaber-Fiebert, an associate professor of medicine, is a decision scientist.
The class will enable students to become critical consumers of studies using infectious disease modeling and to learn the building blocks for constructing infectious disease models themselves.
Despite the course being new and listed in the middle of winter quarter, they have seen enrollment rise from eight — prior to the rise of COVID-19 in the U.S. and its direct impacts on Stanford’s operations — to nearly 30 students as of March 22.
“Together Jason and I are leading one of several efforts on COVID-19 modeling here in Stanford,” said Goldhaber-Fiebert. “And we anticipate that the course will increase the number of Stanford students with the necessary skills to contribute to Stanford’s leadership in this area.”
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Jeremy Goldhaber-Fiebert (right) talks to a student after one of his health policy classes. (Photo: Rod Searcey)
Most Americans don’t realize there are silent brokers helping to fix the price of their prescription drugs — or that it’s a $100 billion annual business accounting for half of Big Pharma sales.
They’re called pharmacy benefit managers (PBMs), with CVS Caremark, Express Scripts and Optum RX dominating the market. Their chief function is to develop and maintain a list called the “formulary,” a list of drugs that will be covered by health-care plans. The formulary groups drugs into tiers with different levels of patient cost sharing.
They also pool volume across health plans to negotiate with drug manufacturers and retailers on prescription drug pricing. And PBMs reap rewards from rebates and fees that drug manufacturers pay them, as well as from a ‘pharmacy spread’ where PBMs bill health plans more than they reimburse pharmacies.
All of this comes at a cost to patients.
“Patients typically only think about what they pay out-of-pocket at the pharmacy counter,” said Alex Chan, a PhD candidate in health economics at Stanford Health Policy. He and Kevin Schulman, a professor of medicine and professor of economics, by courtesy, at the Stanford Graduate School of Business, have just published a paper in JAMA Health Forumthat examines these silent and powerful intermediaries.
“As PBMs leverage the formulary design to secure more and more rebates and fees from manufacturers, these drug manufacturers raise the list price in response,” Chan said. “The patients’ out-of-pocket cost at the counter would increase but at a less noticeable rate given that they co-pay are just a percentage of the list prices.”
Unless these rebates are passed along to consumers as reduced premiums, the net effect is an increase in premiums. Furthermore, if formulary design is used to help PBMs secure better rebates, PBMs may prioritize expensive drugs over more cost-effective drugs.
Transparency
These pharmacy benefit managers have come under scrutiny as health policy experts learn more about the scale of prescription drug rebates and other questionable practices used by these intermediaries in the prescription drug market. For example, PBMs can include “gag clauses” that prohibits pharmacists from telling customers about cheaper drug options.
They ask themselves: What is the underlying value of PBMs for both payers and patients?
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Chan and his co-author Kevin Schulman acknowledge that PBMs play an important role in many transactions of the U.S. economy.
“They create value by providing information on the quality and value of products and services and by providing negotiation leverage as they amass scale by aggregating smaller buyers (or sellers),” they write. “Consumers can be sure to share in this value under three conditions: when there is competition among intermediaries, when pricing is transparent, and when it is clearly defined who is negotiating on whose behalf.”
But when these conditions are not met, they add: “We can find that intermediaries can hold a powerful and self-serving position in a market.”
Chan and Schulman found that in the drug prescription market, there are significant concerns about the value of these PBMs:
Rather than a market where there is competition among PBMs, consolidation has resulted in a situation in which the three largest PBMs have about 80% of market share. There are significant barriers to competition among PBMs. If a health system wants to switch PBMs, it requires a significant investment in a “request-for-proposal” process.
Drug-specific rebates are kept confidential between PBMs and drug manufacturers, and health plans have little ability to clearly assess the cost-savings for their members or to gauge the appropriateness of the rebate passthroughs.
Under the rebate model, the role of the PBM has evolved to serving as an agent of both the payer and the manufacturer. The interests of payers and manufacturers are often in conflict, especially with respect to expenditures.
"One of the largest criticisms of PBMs is the lack of transparency surrounding the structure and scale of payments from manufacturers to the PBM,” the authors write. “The current PBM business is shrouded in secrecy.”
Only the PBM knows the actual scope of payments from drug manufacturers, such as rebates and service fees. They note that in 2016, for 13 pharmaceutical companies, payments to PBMs and other intermediaries (such as wholesalers) were $100 billion — or 50% of gross sales.
“Without transparency, a PBM might develop formularies that maximize payments to the PBM rather than maximize value to patients,” Chan and Schulman write.
Suspicion over just that led health insurance company Anthem to sue Express Scripts for $15 billion in 2016 for overpayments on drug pricing. In the end, Anthem cut ties with Express Scripts to develop its own PBM.
“The PBMs have grown out of sync with what we can reasonably expect to be a value-adding intermediary,” Chan said. “It is hard to really tell how much inefficiencies have been created due to this lack of transparency.”
Legal Solutions
The authors note that Congress has taken steps to shed light on PBMs through the Patient Right to Know Drug Prices Act and the Know the Lowest Price Act, both adopted in 2018. These laws outlaw PBMs gag clauses that forbid pharmacists from telling consumers that their price through a PBM was higher than the as price for the same product.
Chan said these laws are a move toward the direction of providing patients with more transparency about their options.
“An even more promising direction would be for legislation to make a stronger push towards public disclosure of rebates, discounts, and price concessions, along with lower barriers to entry to the PBM market,” he said.