US Price Control, Outcomes-Based Contracting: Reflections Of Former VA Secretary Shulkin

The former Secretary of the US Department of Veterans Affairs, David Shulkin, discusses in an interview the US Inflation Reduction Act, telehealth, interoperability of healthcare data, and Mark Cuban’s pharma venture.

David Shulkin, Former Secretary of the US Department of Veterans Affairs • Source: Shulkin Solutions

As pharma readies to deal with the landmark US Inflation Reduction Act (IRA), which establishes unprecedented powers for price controls in Medicare, a former government official asserts that industry is not likely to face a big financial hit but ought to address the issue of affordability in earnest or risk more drastic action.

In an interview during his recent visit to India, David Shulkin, former Secretary of the US Department of Veterans Affairs in the Trump Administration, stated that while the impact of the IRA isn’t likely to be that “severe,” what’s important is that a “signal is sent” based on public

The Departments of Defense and Veterans Affairs has been able negotiate drug prices for their health programs for decades. Any learnings you could share?

Shulkin: The Department of Veteran Affairs and the Department of Defense buy drugs together and takes an approach that a restricted formulary, if it is put together properly, is not harmful to the population. That frankly surprised me when I came from running private hospitals.

I felt that restricting a formulary wouldn’t be accepted, but in the Department of Veterans Affairs and the Department of Defense that formulary is actually fairly well accepted.

To develop a formulary you need to do appropriate research and get the appropriate clinical input to make good decisions, and VA has invested heavily in the research infrastructure to be able to make those decisions. In fact, the way that the VA and the Department of Defense does this is probably very similar to what you see in European countries, and probably also in India, in terms of doing a thorough analysis on the value/the outcome and the benefit of the drugs

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