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September 2015

Having “Skin in the Game” and Allowing Cross-Border Importation of Drugs to Lower High Prices of Cancer Drugs

Author Affiliations
  • 1Department of Leukemia, The University of Texas MD Anderson Cancer Center, Houston
  • 2Epocrates Medical Information, AthenaHealth, San Francisco, California
  • 3Princess Margaret Cancer Centre, University of Toronto, Toronto, Ontario, Canada
JAMA Oncol. 2015;1(6):729-730. doi:10.1001/jamaoncol.2015.1024

In the dialogue on health care costs and high cancer drug prices, discussions revolve around strategies to lower prices, patients having “skin in the game,” the differential prices of drugs in the United States vs abroad, and cross-border drug importation. How are these topics interconnected?

The origin of the expression “skin in the game” is unknown. It is attributed to William Shakespeare’s play, The Merchant of Venice, in which Shylock requests that Antonio promises a pound of his own flesh as collateral to be exacted by Shylock if Antonio’s friend Bassanio defaults on a loan to which Antonio is guarantor. It has also been attributed to Warren Buffett, when he raised his first fund of $105 000 from 11 physicians and placed himself a token sum of $100 as his skin in the game.1 “Skin in the game” refers to the risk invested by a principal, presumably to perform better with the investment. The skin in the game concept has become popular in health care to denote out-of-pocket expenses incurred by patients. The theory is that if patients pay out-of-pocket, they will be more prudent with choices of treatments. This would lower individual and general health care costs. If a patient is given a choice between 2 equally effective drugs (eg, antibiotics, cardiac medications), they will choose the $10 generic drug over the $1000 patented drug because the out-of-pocket expenses (about 20%) will be $2 vs $200.

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