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Are doctors the key to lower drug prices?

A major driver of high drug prices is the lack of value consciousness on the part of prescribing physicians.

By Bob Kocher and Peter R. Orszag | Updated on July 30, 2018
Pill packets When the doctors are at least partially on the hook, they prescribe lower-cost drugs when possible and use expensive drugs only when they are most likely to work. (Photo: Shutterstock)

The U.S. is grappling with how to rein in high drug prices. Unfortunately, most of the proposed solutions work better on a bumper sticker than in reality. The debate, however, tends to ignore a key player — the prescribing doctor — who could have a central role in a more sustainable approach to better value in drug pricing.

A major driver of high drug prices is the lack of value consciousness on the part of prescribing physicians. Fee-for-service medicine creates incentives for doctors to care only about effectiveness and patient convenience when prescribing. In most cases, they are not even aware of the price of a drug or how much it costs the patient. To combat physician insensitivity to price, health plans have evolved a series of strategies, but they work imperfectly and often alienate patients and physicians.

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