Drug Pricing, Broken Incentives, and the 340b program Fixes Washington Won't Touch — The Doctors’ Lounge

Episode Summary

Ryan Long — former senior policy advisor to Speaker Kevin McCarthy and current non-resident senior scholar at the USC Schaefer Institute — joins Drs. Koka and DiGiorgio for a deep dive into the structural failures driving American drug pricing. The conversation covers the list-to-net price bubble and why patients pay cost-sharing on a fictitious number, how the IRA's price-setting mechanism disincentivizes both new drug development and subsequent indications, and why the 340B program — sold politically as a lifeline for safety net hospitals — systematically funnels the most money to wealthy health systems with high commercial payer mixes. Long argues the fix isn't tweaking the formula; it's scrapping the drug arbitrage mechanism entirely and replacing it with a direct, transparent grant program that actually reaches the hospitals that need it.

Chapter Markers

00:00 Introduction — Ryan Long's 25 Years in Health Policy

02:08 Drug Pricing 101: List Price vs. Net Price and Why It Matters

06:39 GLP-1s as a Case Study: Insurance Pullback and the Price War That Followed

11:17 The Medicare Bridge Program and Government Price Setting for GLP-1s

14:11 Why Drug Companies Set List Prices High at Launch

16:10 The Inflation Reduction Act: Price Controls, Rebate Penalties, and Innovation Risk

20:57 Brand-to-Brand Competition and the FDA's Role

28:52 GLP-1s Under Medicare: Is the $50/Month Bridge Program Good Policy?

36:50 The Medicaid Drug Rebate Program and the Best Price Provision

38:08 The Origins of 340B: What the Program Was Actually Designed to Do

42:24 Qui Bono — How 340B Revenue Is Really Generated