Monday, August 29, 2016

Health Care Reform Articles - August 29, 2016


by James Suroweicki - The New Yorker

Few companies are as unpopular as insurance companies, and no tears were shed for the insurance giant Aetna when, a couple of weeks ago, it announced that it had lost more than four hundred million dollars on Obamacare policies since the Obamacare exchanges were set up, in 2014, and was going to pull out of most of them. The news, which followed similar announcements by United Healthcare and Humana, was greeted with talk of “whining” insurers who “put profits before patients’ health” and are “willing to deny care to make a few extra dollars.” But the recriminations are misplaced. Aetna’s decision reflects an awkward reality: the jerry-rigged, politically compromised nature of Obamacare has made the program unstable, and unable to live up to its lofty promises.
It’s not that Obamacare has failed. As Larry Levitt, a health-care analyst at the Kaiser Family Foundation, told me, “The main goal of the law was to reduce the number of uninsured people, and twenty million more people are covered today because of it. It’s hard to call that a failure.” The reforms that Obamacare put in place have guaranteed access to insurance for people with preĆ«xisting conditions, and have done away with caps on how much insurance companies will spend. Access to health care is less precarious than it used to be.
Still, we’re a long way from the future that Barack Obama envisaged when, in 2009, addressing the American Medical Association, he called for “comprehensive reform that covers everyone” and provides “affordable health insurance to every single American.” Some thirty million Americans remain uninsured. Participants in the A.C.A. marketplaces are less numerous, and sicker, than anticipated: 8.3 million fewer people enrolled through the exchanges this year than the Congressional Budget Office had projected. As a result, insurers in much of the country are fleeing the marketplaces. Kaiser estimates that between twenty and twenty-five per cent of U.S. counties may have only one insurer offering coverage in 2017; there’s already a county in Arizona with no Obamacare insurer at all. And the insurers that remain in these markets tend to offer an increasingly narrow network of health-care providers.
Lack of competition is a recipe for high premiums or low benefits (or both), further deterring younger, healthier people from buying policies. Which means that the risk pool gets still older and sicker, which means that more insurance companies lose money and leave the market, which means that competition is reduced even further, which means: see above. The U.S. could well end up with a two-tier insurance market, in which people lucky enough to get insurance through their employers will get much better coverage and wider options than those on the individual market, even when both groups are paying the same amount in premiums.
Obamacare is being hobbled by the political compromises made to get it passed. The program’s basic principles were the right ones: everyone would be able to get insurance, regardless of preĆ«xisting conditions, and everyone would pay the same price for a given policy, with upward adjustments made only for older people and smokers. In short, insurance companies were prohibited from managing risk by charging healthy, low-risk people less than frailer, high-risk people. Since managing risk is typically key to how insurers make money, it would have made sense to leave them out and just enroll everyone in a government-run program like Medicare. Politics, of course, ruled that out. Shoring up the private-side approach would require penalties stiff enough to get young, healthy Americans to buy health insurance, but politics ruled that out as well.
Conservatives point to Obamacare’s marketplace woes as evidence that government should stop mucking around with health insurance. In fact, government hasn’t mucked around enough: if we want to make universal health insurance a reality, the government needs to do more, not less. That doesn’t require scrapping the current system: the Netherlands and Switzerland both demonstrate that you can get universal coverage through private insurers. But their examples also show that to do so we’d need to make it much harder to avoid buying insurance, and we’d need to expand subsidies to consumers.
Alternatively, we could implement the public option, which Obama himself called for in that 2009 speech: a federal program, modelled on Medicare, open to anyone on the individual market. The public option would guarantee that there was always at least one good choice available in the marketplace, and would provide competition for private insurers. If it used the government’s bargaining power to hold down costs and expand access, it could offer good benefits at a low enough price to attract younger, healthier patients.
There are solid arguments for both of these models. Either would work, if there were a shift in the political mood and it were given a shot. Even if nothing is done, Obamacare will continue to limp along, probably turning into something akin to Medicaid. But the departure of big insurers like Aetna has made it clear that, if we don’t do more to help cover people in the individual market, the program will never make good on its original promise of truly comprehensive reform. So don’t hate the players; fix the game. 

As Obama’s term wanes, Obamacare needs checkup

Associated Press

WASHINGTON — With the hourglass running out for his administration, President Obama’s health care law is struggling in many parts of the country. Double-digit premium increases and exits by big-name insurers have caused some to wonder whether “Obamacare” will go down as a failed experiment.
If Democrat Hillary Clinton wins the White House, expect her to mount a rescue effort. But how much Clinton could do depends on finding willing partners in Congress and among Republican governors, a real political challenge.
“There are turbulent waters,” said Kathleen Sebelius, Obama’s first secretary of Health and Human Services. “But do I see this as a death knell? No.”
Next year’s health insurance sign-up season starts a week before the Nov. 8 election, and the previews have been brutal. Premiums are expected to go up sharply in many insurance marketplaces, which offer subsidized private coverage to people lacking access to job-based plans.
At the same time, retrenchment by insurers that have lost hundreds of millions of dollars means that more areas will become one-insurer markets, losing the benefits of competition. The consulting firm Avalere Health projects that seven states will only have one insurer in each of their marketplace regions next year.
Administration officials say insurers set prices too low in a bid to gain market share, and the correction is leading to sticker shock. Insurers blame the problems on sicker-than-expected customers, disappointing enrollment and a premium stabilization system that failed to work as advertised. They also say some people are gaming the system, taking advantage of guaranteed coverage to get medical care only when they are sick.
Not all state markets are in trouble. What is more important, most of the 11 million people covered through and its state-run counterparts will be cushioned from premium increases by government subsidies that rise with the cost.
But many customers may have to switch to less comprehensive plans to keep their monthly premiums down. And millions of people who buy individual policies outside the government marketplaces get no financial help. They will have to pay the full increases or go without coverage and risk fines. (People with employer coverage and Medicare are largely unaffected.)
Because the spigot of federal subsidies remains wide open, an implosion of health insurance markets around the country seems unlikely. More than 8 out of 10 customers get subsidies covering about 70 percent of their total premiums. Instead, the damage is likely to be gradual. Rising premiums deter healthy people from signing up, leaving an insurance pool that’s more expensive to cover each succeeding year.
“My real concern is 2018,” said Caroline Pearson, a senior vice president with Avalere. “If there is no improvement in enrollment, we could see big sections of the country without any plans participating.”
If Republican Donald Trump wins the White House, he’d start dismantling the Affordable Care Act. But Clinton would come with a long list of proposed fixes, from rearranging benefits to introducing a government-sponsored “public option” as an alternative to private insurers. Not all her ideas would require congressional action.
“She is going to find it important to continue to expand health care,” said Joel Ario, a former Obama administration official who’s now with the consulting firm Mannatt Health.
People in the Clinton camp say she recognizes that as president she’d have to get Obama’s law working better, and is taking nothing off the table.

Slamming 'Absurd' US Healthcare, Sanders Backs Single-Payer in Colorado

"It's hard to imagine a figure whose support of ColoradoCare is more meaningful than Senator Sanders"
by Nadia Prupis - Common Dreams
Sen. Bernie Sanders (I-Vt.) this week endorsed a Colorado ballot measure that would create single-payer healthcare in the state, urging his supporters to rally around the amendment and stating, "If that proposal can win in Colorado, I believe that idea will spread around the country."
"It is absurd, it is beyond belief, that here in America we remain the only major country on earth not to guarantee healthcare to all people," Sanders said at an event in Vermont on Wednesday, where he offered his official endorsement.
As the Denver Post reports, Colorado Amendment 69—known colloquially as ColoradoCare—would create a universal healthcare system funded by payroll taxes that would largely replace private health insurance. People could still choose to keep their own, although they would still be required to pay the tax.
Support for the measure from Sanders carries a lot of political weight; not only was universal healthcare a cornerstone of his presidential campaign—one of the signature issues that endeared him to progressive voters—but he also won the Colorado caucus in March.
Owen Perkins, a spokesperson for the ColoradoCareYES campaign, said in a statement this week that "It's hard to imagine a figure whose support of ColoradoCare is more meaningful than Senator Sanders."
"No one has done more to elevate the idea of Medicare-for-all in the United States in recent years, and by bringing the notion of universal healthcare into stadiums, auditoriums, town halls, and living rooms throughout the country, Senator Sanders has helped create the ideal environment for passing ColoradoCare," Perkins said.
If Colorado approves the amendment, it will be the first state in the nation to implement single-payer healthcare. And as Health Care for All Colorado executive director Donna Smith told Common Dreams in November, that could have national implications, because "we are not relying on the elected officials to advance universal healthcare."
"This may be a way for other states to learn from our work in Colorado and also pursue single-payer reform at the ballot as a way to overcome some of the political inertia that settles in when so many powerful, monied interests hold court over the legislative process," Smith said at the time. "The ballot about much more than achieving healthcare justice. It is also about citizens coming together and using the democratic process to successfully achieve healthcare justice."

Health-care exchange sign-ups fall far short of forecasts
by Carolyn Y. Johnson - Washington Post
Enrollment in the insurance exchanges for President Obama’s signature health-care law is at less than half the initial forecast, pushing several major insurance companies to stop offering health plans in certain markets because of significant financial losses. 
As a result, the administration’s promise of a menu of health-plan choices has been replaced by a grim, though preliminary, forecast: Next year, more than 1 in 4 counties are at risk of having a single insurer on its exchange, said Cynthia Cox, who studies health reform for the Kaiser Family Foundation.
Debate over how perilous the predicament is for the Affordable Care Act, commonly called Obamacare, is nearly as partisan as the divide over the law itself. But at the root of the problem is this: The success of the law depends fundamentally on the exchanges being profitable for insurers — and that requires more people to sign up. 
In February 2013, the Congressional Budget Office predicted that 24 million people would buy health coverage through the federally and state-operated online exchanges by this year. Just 11.1 million people were signed up as of late March.

Exchanges are marketplaces where people who do not receive health benefits through a job can buy private insurance, often with government subsidies.
Aetna, the nation's third largest health insurer, announced that it will pull back from Obamacare exchanges citing losses of more than $430 million since January 2014.(Daron Taylor/The Washington Post)
“Enrollment is key, first and foremost,” said Sara R. Collins, a vice president at the Commonwealth Fund, a nonpartisan foundation that funds health-care research. “They have to have this critical mass of people so that, by the law of averages, you’re going to get a mix of healthy and less healthy people.”
A big reason the CBO projections were so far off is that the agency overestimated how many people would lose insurance through their employers, which would force them into the exchanges. But there have been challenges getting the uninsured to sign up, too. 
The law requires every American to get health coverage or pay a penalty, but the penalty hasn’t been high enough to persuade many Americans to buy into the health plans. Even those who qualify for subsidized premiums sometimes balk at the high deductibles on some plans. 
And people who do outreach to the uninsured say the enrollment process itself has been more complex and confusing than Obama’s initial comparison to buying a plane ticket.
“This exchange will allow you to one-stop shop for a health-care plan, compare benefits and prices, and choose a plan that’s best for you and your family,” Obama said in a speech in 2009. “You will have your choice of a number of plans that offer a few different packages, but every plan would offer an affordable, basic package.”
In some markets, a shortfall in enrollment is testing insurers’ ability to balance the medical claims they pay out with income from premiums. In an announcement curtailing its involvement in the exchanges this month, Aetna cited financial losses traced to too many sick people signing up for care and not enough healthy ones.
The health-care law has been a political lightning rod from the beginning, and Republican legislators have used insurance companies’ withdrawals from the exchanges to reignite calls for the law’s repeal.
Kaiser tracks public data on insurer participation in the exchanges to project how many options counties will have, but the numbers are not final. This year, exchanges in about 7 percent of counties had just one insurer. Earlier this month, Aetna announced that it will pull out of 11 of the 15 states where it offers coverage on the health-care exchanges. Humana made a similar decision weeks earlier, planning to exit several states. And last spring, UnitedHealth Group said it would remain in three or fewer exchanges next year.
Obama has used the health-care law’s challenges to issue a new call for a public insurance option.
“Congress should revisit a public plan to compete alongside private insurers in areas of the country where competition is limited,” he wrote in an essay published in the Journal of the American Medical Association. “Adding a public plan in such areas would strengthen the Marketplace approach, giving consumers more affordable options while also creating savings for the federal government.”
Chicago resident Eva Saur, 32, is exactly the kind of healthy person insurers would like to have on their rolls. Saur hasn’t had coverage in nearly a decade, but she takes good care of her health. For the handful of times she’s been sick, a walk-in clinic at a pharmacy has been sufficient.
“I was raised — not against the system — but we had a doctor who would prescribe us herbs before a prescription” medication, Saur said. “For me, monetarily, it makes way more sense to do this.”
Saur’s tax penalty for being uninsured was a bit more than $600 last year, while the cheapest health plan she examined cost about as much for three months in premiums — and came with a $7,000 deductible.
The penalty for not signing up is increasing. Still, some policy experts insist it is not enough motivation to buy insurance.
“It was basically no stick at all. This is the classic case of where Johnny marked crayon on the wall, his mother said, ‘Don’t do that,’ and then slapped his hand a day later,” said Joseph Antos, a resident fellow at the American Enterprise Institute. “The connection between the offense and the penalty is a little remote.”
The health-care law has had unequivocal successes. In some areas, lots of insurers compete on the exchanges, which helps keep premiums low. In Cleveland and Los Angeles, the average premium for a benchmark health plan actually declined in 2016. The number of uninsured Americans continues to shrink, hitting 9.1 percent last year — the lowest level ever. 
The average premium for the people who receive tax credits – 85 percent of the people signed up through the exchanges — is just $106 per month. People who qualify for the income-based tax credits are largely sheltered from premium increases.
The first people to sign up for insurance through the exchanges were expected to be those with chronic diseases and high medical costs. Because insurers could no longer discriminate against those people, the law built in three mechanisms for the government to redistribute money from plans with healthier patients to those with sicker ones. Two of those programs expire at the end of the year. The third, called the “risk adjustment” program, transferred $4.6 billion between insurers in 2014.
Critics say there’s a fundamental problem with the system, and the risk-adjustment program needs to be fixed. But supporters of the law argue that the problem is temporary, the natural evolution of a nascent free-market system. Some of the first companies to enter the market made bad bets on how healthy customers would be, resulting in unprofitable health plans. Proponents say it’s natural for new entrants to replace them, with better information and more competitive plans.
Cigna, for example, has said it has filed to enter exchanges in three new states next year.
“There’s no bottleneck, this is just the natural growth pains of a new market,” said Jonathan Gruber, an economist at the Massachusetts Institute of Technology. “What happened is they set up this new market where insurers didn’t have experience; insurers made an estimate as to what people would cost and their estimate turned out to be too low.”
Supporters point to a recent government analysis that suggests the “risk pool” — the number of high-cost sick customers relative to healthy ones — is not worsening and could even be improving. Medical costs per enrollee in the marketplaces fell by 0.1 percent in 2015, while medical costs for people in the broader health-insurance market grew by at least 3 percent. In states with strong enrollment growth, there were greater reductions in members’ costs. 
Everyone agrees that more healthy people need to sign up. 
In June, the Obama administration unveiled its plan to target younger and healthier adults, including direct outreach to individuals and families who paid the penalty. It also released new guidance, encouraging insurance companies to communicate more with young adults being kicked off their family’s plan when they turn 26 years old. 
Even older adults are taking their chances without health-care coverage.
Donte Fitzhugh, 55, of Charlotte was laid off last year from a job as a call-center operations manager. COBRA, which allows former workers to extend their employer-provided health insurance if they pay the full premium, was expensive, and Fitzhugh didn’t sign up for the exchanges for very human reasons: He figured he’d find a job faster than he did. He thought every penny counted when he was unemployed. He didn’t have major health problems, and he got a coupon to help cover the costs of his hypertension medicine. 
As the window to sign up for health insurance passed without a new job, he kept procrastinating. Although health insurance from a new job will begin in October, he faces a penalty that will cost him hundreds of dollars.
“I believe in Obamacare. As an American, it’s my responsibility to have health insurance,” Fitzhugh said. “Since I didn’t have it, it’s going to impact me financially.”
Such are the barriers to insurance: Remaining uninsured can be more attractive or just easier than signing up to pay hundreds of dollars a month for something that many people don’t think they need.
Judy Robinson, a health insurance support specialist at the Charlottesville Free Clinic, has counseled hundreds of patients who are eligible for subsidized insurance on the exchanges but ultimately decide not to sign upShe said the subsidized insurance on the marketplace tends to be a good deal for those who make between 100 and 150 percent of the poverty level. But those who make more often are faced with large deductibles that don’t seem like a good deal to many people. 
Beyond the sticker price, she said it can require a lot of paperwork to demonstrate the annual income required to qualify for tax credits if people are juggling multiple part-time jobs. And sometimes, people are simply mistrustful.
“There’s a lot of people that live sort of off the grid, sort of semi-off the grid and they just don’t go to the doctor,” Robinson said. “The hospital is the place where you go to die, and doctors are just going to try and make you do procedures and get money out of you. That’s how they think.”
There are also those who want insurance but are struggling — and find themselves trapped by the high cost of health care. 
Donna Privigyi, 49, of Charlottesville has looked into insurance through the exchanges a few times. But over the past few years, much of her modest child-care salary and effort went toward trying to help support her adult son, Mark, who hadn’t been the same since the death of his younger brother. Donna was focused on trying to support her son. Health insurance — even rent — was an afterthought.
“With supporting my son, it didn’t matter,” Privigyi said. “I was just like, I can barely get by, just juggling the bills and taking care of him.”
Late last year, Mark died of a drug overdose, and Privigyi — consumed by grief — wasn’t thinking about insurance when the window to sign up opened and closed.
Then, in June, she got appendicitis. Her bills from two hospitals were $33,000. 
The argument for having health insurance is the pile of bills she has been collecting — now with late fees added. The obstacle to getting health insurance is that same stack of bills.
“It’s such a gamble, you know, until I figure out what to do with these medical bills,” Privigyi said. “They’re just adding on late fees. How can I even afford to sign up?”

Painted as EpiPen Villain, Mylan’s Chief Says She’s No Such Thing

by Katie Thomas - NYT

America has a new pharmaceutical villain. Her name is Heather Bresch.
As the chief executive of Mylan, the owner of the severe allergy treatment EpiPen, Ms. Bresch is at the center of the latest public outrage over high drug prices, excoriated for overseeing a fourfold price increase on EpiPen while taking a huge pay raise.
From talk shows to Twitter, her name is being mentioned alongside Martin Shkreli, the so-called Pharma Bro who ignited anger last fall over raising the price of the drug Daraprim, and J. Michael Pearson, the onetime McKinsey consultant who took over Valeant Pharmaceuticals International and sharply raised prices on lifesaving drugs.
But Mr. Shkreli and Mr. Pearson were outliers trying to upend the industry. At one point, the pharmaceutical industry’s main lobbying group disavowed them.
Not so with Ms. Bresch. In many ways, she is an ultimate insider. Her father is a United States senator. She runs one of the largest generic drug companies in the world. She also oversees the Generic Pharmaceutical Association — the generic industry’s lobbying group.
Now the question is whether her different position will give her a different result. Both Mr. Shkreli and Mr. Pearson were forced out of their companies.
Already, Ms. Bresch, 47, has moved more quickly than they did to quell public furor over prices. On Thursday, she announced that the company was increasing financial assistance to patients to reduce their out-of-pocket costs. But the company did not say it would lower the list price — which has risen to about $600 for a pack of two EpiPens, from about $100 when Mylan acquired the product in 2007.
In an interview, Ms. Bresch said the price increases on EpiPen weren’t even in the “same hemisphere” as what Mr. Shkreli did when he raised the price of Daraprim by 50 times overnight.
Over the years, her brash leadership style has bruised egos but also, some say, improved access to drugs and raised quality standards. Her company, Mylan, also has a reputation for bare-knuckled tactics that have angered competitors and investors alike.
“I think we mean what we say: You can do good and do well, and I think we strike that balance around the globe,” Ms. Bresch said. Still, she was unapologetic that Mylan’s actions were driven by profit. “I am running a business. I am a for-profit business. I am not hiding from that.”
How the company, and Ms. Bresch, strikes that balance seems to be quickly changing. Generic drug companies once dealt almost exclusively in making cheap copies of pills and railed passionately against the anticompetitive tactics of brand-name competitors. Now, through a series of acquisitions and mergers, the handful of large generic companies that are left are increasingly investing in expensive brand-name drugs, and in doing so, are embracing many of the tactics they once scorned.
“It’s like talking out of both sides of your mouth,” said Dinesh Thakur, an advocate for generic drug quality. “To me, I think, it’s opportunistic.”
In the interview, Ms. Bresch said the company’s latest actions would do the most to help patients where it mattered, by reducing their out-of-pocket costs. And she said that the $600 list price was necessary for the company to recoup its investment in the EpiPen, which includes raising awareness for severe allergic reaction and making improvements to the way the product works.
But she also sought to shift blame away from Mylan, saying that patients are feeling the pain in part because insurers have increased the amount that customers must pay in recent years.
“What else do you shop for that when you walk up to the counter, you have no idea what it’s going to cost you?” she said. “Tell me where that happens anywhere else in the system. It’s unconscionable.”
To some, the company’s response seemed to ring hollow. “It’s a real challenge to understand how a management team sits around a board table and makes a decision to raise the price of a lifesaving medication over and over and over, and when the P.R. storm hits, decides to blame someone else for that price increase,” said David Maris, an analyst for Wells Fargo. He had warned investors in June that Mylan’s price increases on EpiPen and other drugs could soon draw unwanted media scrutiny.
The company is not a stranger to controversy. Robert J. Coury, Mylan’s chairman who served as chief executive until 2011, came under scrutiny in 2012 for using the company’s corporate jet to travel to his son’s music concerts. And last year, The Wall Street Journal reported that one of the board members had undisclosed ties to the land where the company built its new Pittsburgh offices.
Ms. Bresch has also weathered her share of controversy, like when it was discovered that West Virginia University awarded her a business degree 10 years after she had attended the school, even though she had completed only about half of the coursework. A report by the university later concluded that officials wrongly awarded her the degree because she was the daughter of the then-governor Joe Manchin, now a Democratic senator representing West Virginia. Mr. Manchin and Ms. Bresch have said they did nothing wrong.
The company also angered shareholders when it switched its headquarters to the Netherlands, and then used a little-known provision in Dutch law to block a takeover by the pharmaceutical giant Teva, which many investors had favored. The move to the Netherlands in 2014, called an inversion, also reduced the company’s tax rate. Mylan is one of a string of pharmaceutical companies that have done inversions in recent years, prompting outcry in Washington and calls to limit the practice.
Ms. Bresch’s rising salary has also fueled anger over the EpiPen price increase. Since 2007, when EpiPen was acquired and she was the company’s chief operating officer, she earned about $2.5 million in total compensation. In 2015, her compensation was nearly $19 million. Mylan’s board has said in company filings that it believes her pay is justified because she has contributed significantly to the company’s growth in recent years.
Ms. Bresch, who has worked at Mylan for 25 years, said her West Virginia upbringing had informed her approach to serving as chief executive. “There is a work ethic and grit about that that allows me to help make a difference,” she said.
Some of the chafing at her style, she said, is because people are resistant to change. Her top accomplishments, she said, include getting a federal law passed that required more inspections of overseas drug manufacturers, and improving access to AIDS drugs for patients overseas. “To make change happen, to make a difference, mediocrity doesn’t get you there,” she said.
Even as they have ruffled feathers within the industry, Ms. Bresch and Mylan have earned measured praise from consumer advocates, who said she wielded her influence in ways that helped consumers.
James Love, director of the consumers group Knowledge Ecology International, said Ms. Bresch opened doors at the Office of the United States Trade Representative when his group and others were working to change provisions in the proposed Trans-Pacific Partnership that they said would have limited access to drugs by people overseas. Mylan, as a seller of generic drugs, shared their interest, he said.
“They came in with some very talented people in the negotiations, and they knew what was going on politically,” Mr. Love said.
Still, he said, he opposes their position on the EpiPen and said his group was composing a letter of complaint to the Federal Trade Commission.
“I’m appalled at the price increase,” he said. “I don’t want to sugarcoat that.”

States of Cruelty

by Paul Krugman - NYT

Something terrible has happened to pregnant women in Texas: their mortality rate has doubled in recent years, and is now comparable to rates in places like Russia or Ukraine. Although researchers into this disaster are careful to say that it can’t be attributed to any one cause, the death surge does coincide with the state’s defunding of Planned Parenthood, which led to the closing of many clinics. And all of this should be seen against the general background of Texas policy, which is extremely hostile toward anything that helps low-income residents.
There’s an important civics lesson here. While many people are focused on national politics, with reason — one sociopath in the White House can ruin your whole day — many crucial decisions are taken at the state and local levels. If the people we elect to these offices are irresponsible, cruel, or both, they can do a lot of damage.
This is especially true when it comes to health care. Even before the Affordable Care Act went into effect, there was wide variation in state policies, especially toward the poor and near-poor. Medicaid has always been a joint federal-state program, in which states have considerable leeway about whom to cover. States with consistently conservative governments generally offered benefits to as few people as the law allowed, sometimes only to adults with children in truly dire poverty. States with more liberal governments extended benefits much more widely. These policy differences were one main reason for a huge divergence in the percentage of the population without insurance, with Texas consistently coming in first in that dismal ranking.
And the gaps have only grown wider since Obamacare went into effect, for two reasons. First, the Supreme Court made the federally-funded expansion of Medicaid, a crucial part of the reform, optional at the state level. This should be a no-brainer: If Washington is willing to provide health insurance to many of your state’s residents — and in so doing pump dollars into your state’s economy — why wouldn’t you say yes? But 19 states, Texas among them, are still refusing free money, denying health care to millions.
Beyond this is the question of whether states are trying to make health reform succeed. California — where Democrats are firmly in control, thanks to the GOP’s alienation of minority voters — shows how it’s supposed to work: The state established its own health exchange, carefully promoting and regulating competition, and engaged in outreach to inform the public and encourage enrollment. The result has been dramatic success in holding down costs and reducing the number of uninsured.
Needless to say, nothing like this has happened in red states. And while the number of uninsured has declined even in these states, thanks to the federal exchanges, the gap between red and blue states has widened.
But why are states like Texas so dead-set against helping the unfortunate, even if the feds are willing to pick up the tab?
You still hear claims that it’s all about economics, that small government and free markets are the key to prosperity. And it’s true that Texas has long led the nation in employment growth. But there are other reasons for that growth, especially energy and cheap housing.
And we’ve lately seen strong evidence from the states that refutes this small-government ideology. On one side, there’s the Kansas experiment — the governor’s own term for it — in which sharp tax cuts were supposed to cause dramatic job growth, but have in practice been a complete bust. On the other side there’s California’s turn to the left under Jerry Brown, which conservatives predicted would ruin the state but which has actually been accompanied by an employment boom.
So the economic case for being cruel to the unfortunate has lost whatever slight credibility it may once have had. Yet the cruelty goes on. Why?
A large part of the answer, surely, is the usual one: It’s about race. Medicaid expansion disproportionately benefits nonwhite Americans; so does spending on public health more generally. And opposition to these programs is concentrated in states where voters in local elections don’t like the idea of helping neighbors who don’t look like them.
In the specific case of Planned Parenthood, this usual answer is overlaid with other, equally nasty issues, including — or so I’d say — a substantial infusion of misogyny.
But it doesn’t have to be this way. Most Americans are, I believe, far more generous than the politicians leading many of our states. The problem is that too many of us don’t vote in state and local elections, or realize how much cruelty is being carried out in our name. The point is that America would become a better place if more of us started paying attention to politics beyond the presidential race.

Friday, August 26, 2016

Health Care Reform Articles - August 26, 2016

Why a single-payer healthcare system is inevitable

by Robert Reich - Christian Science Monitor

The best argument for a single-payer health plan is the recent decision by giant health insurer Aetna to bail out next year from 11 of the 15 states where it sells Obamacare plans. Aetna’s decision follows similar moves by UnitedHealth Group, the nation’s largest health insurer, and by Humana, another one of the giants.
All claim they’re not making enough money because too many people with serious health problems are using the Obamacare exchanges, and not enough healthy people are signing up.
The problem isn’t Obamacare per se. It lies in the structure of private markets for health insurance – which creates powerful incentives to avoid sick people and attract healthy ones. Obamacare is just making this structural problem more obvious.
In a nutshell, the more sick people and the fewer healthy people a private for-profit insurer attracts, the less competitive that insurer becomes relative to other insurers that don’t attract as high a percentage of the sick but a higher percentage of the healthy.
Eventually, insurers that take in too many sick and too few healthy people are driven out of business.
If insurers had no idea who’d be sick and who’d be healthy when they sign up for insurance (and keep them insured at the same price even after they become sick), this wouldn’t be a problem. But they do know – and they’re developing more and more sophisticated ways of finding out.
Health insurers spend lots of time, effort, and money trying to attract people who have high odds of staying healthy (the young and the fit) while doing whatever they can to fend off those who have high odds of getting sick (the older, infirm, and the unfit).
As a result we end up with the most bizarre health-insurance system imaginable: One ever better designed to avoid sick people.
If this weren’t enough to convince rational people to do what most other advanced nations have done – create a single-payer system that insures everyone, funded by taxpayers –  consider that America’s giant health insurers are now busily consolidating into ever-larger behemoths.
UnitedHealth is already humongous.
Aetna, meanwhile, is trying to buy Humana in a deal that will create the second-largest health insurer in the nation, with 33 million members. The Justice Department has so far blocked the deal.
Insurers say they’re consolidating in order to reap economies of scale. But there’s little evidence that large size generates cost savings.
In reality, they’re becoming huge to get more bargaining leverage over everyone they do business with – hospitals, doctors, employers, the government, and consumers. That way they make even bigger profits.
But these bigger profits come at the expense of hospitals, doctors, employers, the government, and, ultimately, taxpayers and consumers.
There’s abundant evidence, for example, that when health insurers merge, premiums rise. researchers found, for example, that after Aetna merged with Prudential HealthCare in 1999, premiums rose 7 percent higher than had the merger not occurred.
What to do? In the short term, Obamacare can be patched up by enlarging government subsidies for purchasing insurance, and ensuring that healthy Americans buy insurance, as the law requires.
But these are band aids. The real choice in the future is either a hugely expensive for-profit oligopoly with the market power to charge high prices even to healthy people and stop insuring sick people.
Or else a government-run single payer system – such as is in place in almost every other advanced economy – dedicated to lower premiums and better care for everyone.
We’re going to have to choose eventually.

Editorial: Government should not rely on private insurers

Editorial Board - The Des Moines Register

Aetna announced last week that it was reducing participation in health insurance exchanges created by the Affordable Care Act. It will sell plans in only four states next year, including Iowa, down from 15 this year. This follows similar market exits from UnitedHealth Group and Humana.
This is yet another reminder of why government should not rely on private companies to deliver health insurance to Americans. History has repeatedly shown this is a costly, dangerous and unsustainable idea. Yet politicians refuse to listen to history.
When Medicare was created in 1965, the goal was to insure seniors through a program administered by the government. In traditional Medicare, Uncle Sam directly pays providers for health services. The program is reliable, predictable and has low administrative costs. But politicians saw an opportunity to funnel public money to for-profit insurers to take over the job of administering benefits.
In the 1990s, private “Medicare+Choice” plans saved taxpayers no money while insurers demanded more and more money from the government. The companies failed to turn a healthy profit and disappeared. Fortunately, seniors could return to traditional, government-run Medicare.
Instead of learning from that experience, Congress embraced private insurers again in 2003. Medicare Advantage plans resulted in taxpayers paying 14 percent more per senior than the cost of care in traditional Medicare. Yet these plans are popular with seniors, who pay lower monthly premiums — and vote. Earlier this year, the GAO reported the feds improperly paid Medicare Advantage companies $14.1 billion in 2013. That’s billion with a "b."
Lucky private insurers. Unlucky taxpayers. Reckless politicians.
Then there are governors, including Terry Branstad, who insist on handing over Medicaid administration to for-profit companies. Let’s take a look at how this has worked in Florida, where former Gov. Jeb Bush pushed the idea, arguing the cost of Medicaid operated by the state was “unsustainable."
Privatization was rolled out statewide in 2014. Almost immediately, insurers complained they were losing money. They asked the state for a $400 million raise and a 12 percent increase in rates. This, of course, jeopardized any savings taxpayers may have realized. Two months ago Florida received a surprise Medicaid bill: It owed $433 million in unpaid reimbursements to insurers.
Then there is the Affordable Care Act.
One of the law’s fundamental flaws is its reliance on private insurers to provide coverage to millions of Americans through exchanges. With no “public option” safety net to offer government coverage if companies jump ship, the insurers have incredible political and financial power. They can, in fact, try to hold the government hostage. Pay higher reimbursements, don't dispute our business decisions, do what we say or we are dropping out of exchanges.
Enter Aetna.
In a July 5 letter, Chief Executive Mark Bertolini informed the Justice Department that if it sued to block Aetna’s dealt to acquire Humana Inc., the insurer would reduce its presence in exchanges. The Obama administration says such a merger would increase consumer costs.
“If the deal were challenged and/or blocked we would need to take immediate actions to mitigate public exchange and ACA small group losses,” he wrote.
Is that a warning? A threat? And how is the Obama administration supposed to respond?
The Justice Department sued to block the merger. Then Aetna announced it was scaling back its offerings in exchanges.
Americans’ access to health insurance should not depend on the profit margins, business dealings, or mergers of for-profit companies. Not in Medicare. Not in Medicaid. And not in exchanges created by health reform law. Instead of funneling tax dollars to private companies, government is better equipped to administer insurance. It is not beholden to stockholders. It does not seek to turn a profit. And it will not abandon the responsibility of providing health coverage to Americans.

EpiPen Price Rise Sparks Concern for Allergy Sufferers

by Tara Parker Pope and Rachel Rabkin Peachman

A steep increase in the price of the EpiPen, a lifesaving injection device for people with severe allergies, has sparked outrage among consumers and lawmakers who worry that parents won’t be able to afford the pens for children heading back to school.
With a quick stab to the thigh, the EpiPen dispenses epinephrine, a drug that reverses swelling, closing of the airways and other symptoms of a severe allergic reaction to bee stings, peanuts or other allergens. 
Mylan, the pharmaceutical company, acquired the decades-old product in 2007, when pharmacies paid less than $100 for a two-pen set, and has since been steadily raising the wholesale price. In 2009, a pharmacy paid $103.50 for a set. By July 2013 the price was up to $264.50, and it rose 75 percent to $461 by last May. This May the price spiked again to $608.61, according to data provided by Elsevier Clinical Solutions’ Gold Standard Drug Database.
Doctors advise allergic patients to carry two EpiPens with them at all times in case an extra dose is needed to quell a severe reaction. Most parents buy multiple EpiPens for home, in the car and school and may replace them annually, depending on the expiration date. 
Mylan has declined to comment on the price hike, issuing a statement pointing the finger at high-deductible health plans that require consumers to pay much more out of pocket for many drugs. The company said a $100 coupon they offer for the product means most people don’t pay anything for the pens.
But how the price hike affects consumers varies widely, depending on the prices charged by their local pharmacy and the details of their insurance plan. People without insurance or with high-deductible insurance plans can’t always use the coupon and are paying about $640 a set, said Michael Rea, the chief executive of Rx Savings Solutions in Overland Park, Kan. Other patients say that even with good insurance, their copayments are as much as four times higher than in the past. 
Naomi Shulman of Northampton, Mass., has a 12-year-old daughter who is allergic to cashews and keeps EpiPens at home and school. Last year, Ms. Schulman’s out-of-pocket copayment for an EpiPen two-pack was $100. But because EpiPens may expire after a year, Ms. Shulman had to buy another two-pack to send along to her daughter’s camp this summer. Her cost for the same two pens was $400.
“I called the insurance company and asked why it was so high and was told that, actually, it’s $700 total, and my co-pay is $400,” she said. 
For the first time in 10 years, Ms. Shulman said she briefly considered forgoing the purchase, but didn’t want to risk it. “It’s very wrong,” she said. “It’s gouging parents about their children’s lives. It’s not like letting them sniffle. It’s life or death.”
Lauren Barr of Clark, N.J., said her copayment on EpiPens has risen from $141 to $245 in a year, and she will spend $735 this year for a supply of three EpiPen sets. Her 6-year-old daughter Leah is allergic to rice, tree nuts and mushrooms.
“The price of EpiPens has been getting progressively worse over the years, but now it is just obscene,” Ms. Barr said.
The price hike has caught the attention of Washington lawmakers. Senator Amy Klobuchar, Democrat of Minnesota, who has a daughter who carries an EpiPen, has called on the Senate Judiciary Committee and the Federal Trade Commission to review whether the price hikes violate any anti-competition rules. Last year, the drug maker Sanofi recalled a competing product, Auvi-Q, because it may not have been delivering the correct amount of epinephrine, leaving the EpiPen as the primary emergency treatment for severe allergic reactions.
“This is a mainstream product that people carry, and it’s getting harder and harder for people to afford it,” said Senator Klobuchar. “It’s just another example of what we keep seeing, outrageous price increases when a monopoly situation ends up in a company’s lap.”
Senator Chuck Grassley of Iowa called on Mylan to explain the price hikes, noting that they impose a burden on both parents and school districts, who often keep supplies of the pen at the ready.
A petition to Congress protesting the price increase, called “Stop the EpiPen Price Gouging,” has emerged on social media. It has collected more than 48,000 signatures. 
Tonya Winders, president of the Allergy & Asthma Network, said her group is planning to work with other advocacy organizations to make the EpiPen a more universally-covered expense through a federal preventative services task force. She said most families are not feeling the impact of the EpiPen price hike because they have commercial insurance plans with lower copayments and deductibles. The families most affected by the price hike are those who don’t have insurance or those with high-deductible health plans, she said.
“A lot of the families that are being hit with sticker shock are the ones that opted into high-deductible health plans in 2016,” Ms. Winders said. “We believe that Mylan should design a program specifically for those in that high-deductible rate.”
In April, a pharmacist told Sarah Brown of Boulder, Colo., that her copayment on an EpiPen two-pack would be $585, even with a $100 coupon from Mylan. She said she had no choice but to take her chances and hold on to her expired EpiPens instead. “It was a gamble,” she said.
In August, Ms. Brown’s family switched insurance plans so they could afford three packs for home, school and a grandmother’s house. Now, with the new policy and the Mylan coupon, she gets her pens at no charge. “The difference in insurance coverage means being able to afford them or not,” Ms. Brown said.

Congress Presses Pharmaceutical Company to Explain Surge in Cost of EpiPen

by Carl Hulse - NYT

It’s back-to-school time — as well as campaign season — and lawmakers are becoming increasingly focused on the growing cost of pens: EpiPens, that is.
Members of Congress are expressing rising alarm about the increasing costs of the lifesaving injection device for people with severe allergies, and they are hearing from anxious parents.
Senator Charles E. Grassley, the Iowa Republican who leads the Judiciary Committee, was the latest to weigh in on Monday, sending a letter to the head of the pharmaceutical company Mylan, which produces EpiPens. Mr. Grassley demanded an explanation for the 400 percent price increase — to as much as $600 — since the company acquired the product in 2007.
“Access to epinephrine can mean the difference between life and death, especially for children,” Mr. Grassley wrote, noting that many of the children who need EpiPens are enrolled in government health care programs. “It follows that many of the children who are prescribed EpiPens are covered by Medicaid, and therefore, the taxpayers are picking up the tab for this medication.”
Senator Amy Klobuchar, Democrat of Minnesota, called earlier for a Judiciary Committee inquiry into the pricing and an investigation by the Federal Trade Commission.
“Many Americans, including my own daughter, rely on this lifesaving product to treat severe allergic reactions,” she wrote to the head of the commission.
In explaining the increase, Mylan has noted that product improvements have driven up the costs of the devices, that most EpiPens are covered by insurance and that the company also provides discounts. But company executives should prepare to answer many more questions from Capitol Hill in the weeks ahead.

The EpiPen, a Case Study in Health Care System Dysfunction

by Aaron E. Carroll - NYT

Three times in the last two weeks, people — a patient, a colleague and my wife — told me stories about how out of control the price of EpiPens were. Monday, my New York Times colleagues recounted in detail how expensive the devices have become in recent years. All tell the tale of how much even basic health care can cost in the United States.
But by digging a bit further, the story of EpiPens can also explain so much of what’s wrong with our health care system.
When people think of allergies to drugs, food or a bee sting, they often think of a rash. And in fact that’s how many allergic reactions develop and proceed. Most can be treated with diphenhydramine (Benadryl) and careful observation. But some are more serious. Between 1 and 2 percent of people can develop what’s known as anaphylaxis, when the airways you need to breathe swell and close.
Luckily, there’s a simple treatment for such reactions. Epinephrine — or adrenaline — is a hormone naturally produced by the adrenal glands. It’s part of your “fight or flight” response, and it causes your heart to beat faster, your blood vessels to constrict, your pupils to dilate and — most important here — your airways to open.
Epinephrine is very, very cheap. Even in the developing world, it costs less than a dollar per milliliter, and there’s less than a third of that in an EpiPen.
But to save a life, epinephrine must be delivered quickly, and in the proper amounts. People suffering severe allergic reactions often can’t do it themselves. Drawing the drug into a syringe and then administering it to someone else requires training and precision that most people lack.
For that, there is the EpiPen.
What makes this auto-injection device so special is not the drug, but the ease with which it automatically administers the correct dose without delay. The instructionsare right on the side, and even if you don’t read them, it’s pretty easy to figure out. Pull off the safety cap, put the tip against the thigh, and push. Boom. Epinephrine delivered.
The EpiPen isn’t new; it has been in use since 1977. Research and development costs were recouped long ago. Nine years ago, it was bought by the pharmaceutical company Mylan, which then began to sell the device. When Mylan bought it, EpiPens cost about $57 each.
Few competitors existed, and for various reasons, that has remained the case. The device actually worked and saved lives. People needed it. Mylan raised the price. It also began to raise awareness.
Unfortunately, epinephrine is inherently unstable. Research shows that it degrades pretty quickly over time, and it’s recommended that EpiPens be replaced every year. When my friends ask me if they can take an expired over-the-counter pain medication like acetaminophen or ibuprofen, I shrug and nod. If they don’t get a full dose, it’s usually not a big deal. But epinephrine is no joke. People in anaphylaxisneed a full dose every time. They therefore need to replace all their EpiPens every year, again and again.
Kids need them in many places. They need them at home. They need them at school. They need them at camp. They may even want to stash one at Grandma’s house. So people often need to buy quite a few.
More revenue for Mylan. And it raised the price.
Then in 2010, federal guidelines changed to recommend that two EpiPens be sold in a package instead of one. Studies showed that about 10 percent of children who received epinephrine from an EpiPen needed more than one dose. Better to be safe than sorry. Additionally, the Food and Drug Administration changed its recommendations to allow for the prescription of EpiPens for prevention for at-risk patients, not just for those with confirmed allergies. Mylan stopped selling individual EpiPens and began to sell only twin-packs.
It also raised the price.
In 2013, the government went further. It passed a law that gave funding preferences for asthma treatment grants to states that maintained an emergency supply of EpiPens. As the near sole supplier of the devices, Mylan stood to make even more money.
That year, Mylan raised the price again.
Of course, competition would bring the price down. But it’s very hard to bring such a device to market. In 2012, the Adrenaclick and Twinject were discontinued. In 2013, Sanofi began to sell Auvi-Q devices, which even gave audio instructions to walk people though their use. Unfortunately, they were found to give potentially improper doses, and were pulled from the shelves about a year ago.
Teva had hoped to offer a generic version of the EpiPen, but concerns from the F.D.A. sent it back to the drawing board until at least next year.
Adamis hoped to offer prefilled syringes, which would still be harder to use than EpiPens. But it was told by the F.D.A. that much more data would be needed before such a product could be sold.
These setbacks, all in the last year, have once again left Mylan with a veritable run of the market. It raised the price of EpiPens again. As of this May, they cost more than $600 a pack. Since 2004, after adjusting for inflation, the price of EpiPens has risen more than 450 percent.
An alternative still exists. The Adrenaclick, while still not cheap, is back and less expensive than the EpiPen. Some think it’s harder to use, though. It’s not on the accepted list for many health insurance plans. More important, few physicians think of it. Because of that, they write prescriptions for EpiPens. Since the Adrenaclick is not a generic version of the EpiPen, pharmacists can’t substitute one for the other. A prescription for an EpiPen must be filled with an EpiPen, regardless of what consumers might want.
Some people argue that we could still just use syringes and epinephrine for far less money. Sure, they would expire every few months. Sure, they would be harder to use and likelier to break. Sure, they would require training, be hard for the uninitiated to use in an emergency and be more likely to be administered with an incorrect dose. Nonetheless, you could argue that they’re an alternative when the “Cadillac” EpiPens are financially out of reach.
But those are unsatisfactory arguments. Epinephrine isn’t an elective medication. It doesn’t last, so people need to purchase the drug repeatedly. There’s little competition, but there are huge hurdles to enter the market, so a company can raise the price again and again with little pushback. The government encourages the product’s use, but makes no effort to control its cost. Insurance coverage shields some from the expense, allowing higher prices, but leaves those most at-risk most exposed to extreme out-of-pocket outlays. The poor are the most likely to consider going without because they can’t afford it.
EpiPens are a perfect example of a health care nightmare. They’re also just a typical example of the dysfunction of the American health care system.

Mylan Raised EpiPen’s Price Before the Expected Arrival of a Generic

by Andrew Pollack - NYT
In 2012, the company behind the EpiPen settled a lawsuit by agreeing to allow a generic competitor into the market in 2015, potentially cutting into a big part of its business.
The company, Mylan, had already been steadily increasing the price of EpiPen, an injector containing a drug that can save people from life-threatening allergy attacks. After the settlement, it started to raise the price even faster.
Now, as Mylan faces growing public furor over its pricing of EpiPen, the company’s history of pricing the product highlights a common tactic in the drug industry: sharply raising prices in the years just before a generic competitor reaches the market, as a sort of final attempt to milk big profits from the brand-name drug.
Whether the looming generic competition was a motive for the price increases is not entirely clear, because Mylan has declined to answer questions about its thinking. But while the company was once taking two 10 percent price increases a year, it has made two 15 percent increases annually starting in 2014, when the generic competition seemed imminent.
Over all, the list price for a pack of two EpiPens is now over $600, up from a little more than $100 in 2007, the year Mylan acquired the product. Most of that increase — a rise to $609 from $265 — has come in the last three years.

What has further fueled the increases is that the expected generic, from Teva, was unexpectedly rejected by the Food and Drug Administration. And a nongeneric alternative, Sanofi’s Auvi-Q, was pulled from the market last year because of dosing problems.
So rather than a last grasp for profits, Mylan has a near monopoly now, allowing it to continue the price increases for at least another year.
Mylan, while not commenting on why it has repeatedly increased the price, says that most EpiPen users are insured and that the company offers a coupon that can reduce or cover the patient’s co-payments.
Such co-payment assistance is part of the standard playbook for companies selling expensive drugs: The goal is to spare the consumer, who might create a political uproar, and yet still get paid by the insurance company or government health program.
However, some consumers, such as those with high deductibles, are having to pay nearly full price. And complaints about those costs have led to loud criticism from politicians. On Wednesday, senators demanded information on the company’s pricing decisions, and Hillary Clinton, the Democratic presidential nominee, called the price increases “just the latest troubling example of a company taking advantage of its consumers.”
Express Scripts, the nation’s largest pharmacy benefits manager, said that co-payments for an EpiPen pack for its commercially insured members had remained fairly stable in the last 18 months, averaging $73.50 in July compared with $73.03 in January 2015.
In the same 18-month period, the average price paid by insurers rose by about half, to $635 from $421. Those costs are often moved from the insurer to the consumer eventually, in the form of higher insurance premiums.
The cost for insurers rose after Mylan gained more leverage in pricing negotiations when Sanofi’s product was withdrawn and Teva’s generic failed to win approval.
“What we’re seeing from Mylan now is indicative of how many pharma companies negotiate during a momentary monopoly — they price as high as they can for as long as they can,” David Whitrap, a spokesman for Express Scripts, said in an email.
Early in 2015, when Auvi-Q was on the market and the Teva generic was expected, the insurers and pharmacy benefit managers were able to negotiate big discounts and rebates from the list price. It appears that Mylan received less money per prescription in 2015 than in 2014, despite the big increases in list price.
Mylan recorded virtually no increase in revenue from EpiPen in 2015, even though the list price of the product rose more than 30 percent and the number of prescriptions also increased. In a regulatory filing the company cited “lower pricing” for EpiPen. Mylan does not disclose sales of EpiPen other than to say they exceed $1 billion.
In other years, though, sales of EpiPen rose by larger amounts and Mylan seemed to have retained about half the extra revenue that would be expected from its list price increases and prescription growth, according to Umer Raffat, an analyst at Evercore ISI. Even in 2015, he said, the rebates were kept by insurers and pharmacy benefit managers, and were not seen in lower prices paid by consumers.
“Someone definitely got that,” Mr. Raffat said of the rebates. “Who is that? It wasn’t passed on to customers.”
One reason drug companies can raise prices sharply before generic competition arrives is that insurers and pharmaceutical benefit managers are willing to tolerate such increases if they know that lower prices from a generic are on the way.
One weapon the payers use in bargaining is to threaten to switch patients to a less expensive drug. But knowing a generic EpiPen was coming, an insurer might have been reluctant to switch patients from EpiPen to Sanofi’s Auvi-Q (when it was still on the market), because once patients got used to Auvi-Q, it would have been harder to switch them to the even cheaper generic EpiPen once it reached the market.
SSR, a pharmaceutical stock research firm, looked at 14 popular drugs — like Lipitor for cholesterol and Diovan for heart failure — that have lost patent protection.
The list prices for those drugs increased by an average of 35 percent in the two years before they lost exclusivity, compared with an average increase of 22 percent for brand-name drugs as a whole.
In some cases, increases are even higher. Last year, Valeant Pharmaceuticals acquired a diabetes drug called Glumetza and immediately raised the price 500 percent. J. Michael Pearson, the chief executive at the time, explained this to securities analysts by pointing to the looming patent expiration.
“Often, price increases are taken at the end” of a product’s patent life, he said. “So that was just consistent with what most companies do.”
One question that remains is why EpiPen is protected by patents since it has been on the market since the 1980s. The active ingredient, epinephrine— a hormone made by the body and also known as adrenaline — was first isolated more than 100 years ago.
But EpiPen is protected by patents on the device, particularly the safety cap on the needle. The patents are held by Meridian Medical Technologies, which is now part of Pfizer. One such patent, which was asserted in litigation trying to block Teva’s entry into the market, expires in 2025.
It is not clear why the F.D.A. did not approve Teva’s product. Teva has said that the agency found “certain major deficiencies” and that its product will not reach the market until next year at the earliest.

Mylan to Lower EpiPen Cost for Some Patients
by Andrew Pollack - NYT
Responding to a growing furor from consumers and politicians, the pharmaceutical company Mylan said on Thursday that it would lower the cost to some patients of the EpiPen, which is used to treat life-threatening allergy attacks.
The company said it would take immediate action, including providing a savings card that would cover up to $300 of the cost of a pack of two EpiPens, an increase from the $100 savings card it had been offering.
It also said it would increase the number of patients eligible for its assistance program, which provides the product free to patients who have incomes below a certain level and lack insurance coverage for drugs.
Mylan has steadily increased the price of EpiPen — a pack of two now has a list price of about $600, compared with about $100 when it acquired the product in 2007. In the last couple of years, the company has imposed two 15 percent price increases a year.
This has provoked outrage from some parents who are confronting the higher prices as they buy the product for their children returning to school. The Democratic presidential nominee, Hillary Clinton, said on Wednesday that it was “outrageous” to increase so drastically the price of a product that people needed to survive. Members of Congress have also called for investigations into Mylan’s practices.
The new moves will probably not fully mollify the critics. For one thing, Mylan is not lowering the list price of EpiPen, just making it easier for consumers to pay for it. So insurance companies, federal health programs like Medicare and Medicaid and school districts that stock the products could still pay the same price.
Also, in its statement, Mylan put much of the blame for the problem not on its price increases but on insurance companies for placing a higher burden on patients for out-of-pocket costs.
“We have been a long-term, committed partner to the allergy community and are taking immediate action to help ensure that everyone who needs an EpiPen Auto-Injector gets one,” Heather Bresch, Mylan’s chief executive, said in a statement. “We recognize the significant burden on patients from continued, rising insurance premiums and being forced increasingly to pay the full list price for medicines at the pharmacy counter.”
The EpiPen is an auto-injector containing the hormone epinephrine, which can be used to counter or stave off anaphylactic shock caused by an insect bite or food allergy. It is pressed against the thigh and automatically injects the drug.
Mylan said most commercially insured patients were already being helped by its savings coupon and many paid no out-of-pocket costs. But more patients now have high-deductible health plans and were having to pay the full cost. For those patients, using the $300 savings card would cut their costs by half.
Also, the company’s patient assistance program will now cover those with incomes up to 400 percent of the federal poverty level, compared with 200 percent previously.
Mylan said it would also allow patients to order EpiPens directly from the company, reducing their cost.
Mylan also said that more than half the amount paid by the health care system for EpiPens goes to pharmacy benefit managers, insurers, wholesalers and pharmacy retailers, not to the company itself.
The company said its net price for the product — what it actually receives after rebates, discounts, patient assistance and product donations — is $274 of the list price of $608, resulting in annual sales of $1.1 billion to the company from the product. The other parties, it said, get $334 per prescription, or $1.3 billion a year.
The pharmaceutical industry, under siege for high prices, is trying to point fingers at insurers and pharmacy benefit managers. Stocks of biotechnology companies dropped across the board on Wednesday after Ms. Clinton criticized Mylan and vowed to take action on drug prices if elected.

Drug companies spend millions to keep charging high prices
by David Lazarus - LA Times
armaceutical heavyweight Mylan, the latest poster child for drug-industry greed, finally stuck up for itself Thursday. It argued that “the system,” not avarice, was to blame for the company jacking up the price of EpiPens, a common (and life-saving) allergy remedy, by over 400%.
“Look, no one’s more frustrated than me,” Mylan Chief Executive Heather Bresch declared on CNBC.
Actually, millions of people — those with chronic medical conditions or other illnesses — are more frustrated than her.
Despite Mylan’s offer Thursday of discount coupons for some EpiPen users, the only system at work here is a cash-fat industry routinely preying on sick people. It’s a system that the drug industry will do whatever’s necessary to protect.
Of roughly $250 million raised for and against 17 ballot measures coming before California voters in November, more than a quarter of that amount — about $70 million — has been contributed by deep-pocketed drug companies to defeat the state’s Drug Price Relief Act.
Contributions aimed at killing the initiative are on track to be the most raised involving a single ballot measure since 2001, the earliest year for which online data are available, according to MapLight, a nonpartisan organization that tracks money in politics.
The Drug Price Relief Act would make prescription drugs more affordable for people in Medi-Cal and other state programs by requiring that California pay no more than what’s paid for the same drugs by the U.S. Department of Veterans Affairs. It would, in other words, protect state taxpayers from being ripped off.
Industry donations to crush the Drug Price Relief Act “will top $100 million by the election, I’m quite certain of it,” said Michael Weinstein, president of the AIDS Healthcare Foundation and a leading backer of the state measure, also known as Proposition 61. “They see this as the apocalypse for their business model.”
The drug industry already has succeeded in eviscerating Senate Bill 1010, legislation in Sacramento that would have required pharmaceutical companies to detail the costs of producing medicine and explain any price increases. The bill’s author, state Sen. Ed Hernandez (D-West Covina), pulled it from consideration last week after industry lobbyists succeeded in watering it down with business-friendly provisions.
Mylan’s money-grubbing approach to EpiPens is only the latest example of a drug company mercilessly putting the squeeze on patients.
EpiPens are a decades-old way of delivering epinephrine, a hormone that counters the potentially fatal effects of severe allergic reactions to things such as bee stings and peanuts. There’s about a dollar’s worth of epinephrine in each EpiPen, to which Mylan acquired the rights in 2007 and proceeded to steadily impose double-digit price hikes.
But don’t forget Gilead Sciences charging $1,000 a pill for its hepatitis C drug Sovaldi. Or Turing Pharmaceuticals, which purchased rights to a well-established parasite drug used by AIDS and cancer patients and promptly raised the price by 5,000%.
A recent Reuters investigation found that prices for four of the nation's top 10 drugs have more than doubled since 2011, with the remaining six jumping in price by at least 50%.
“It’s like being held hostage,” Weinstein told me. “The public’s hatred of this industry is an incredible thing. They create life-saving drugs, but, because of their greed, people can’t afford them. What good is a life-saving drug if you can’t get it?”
The Drug Price Relief Act aims to protect California taxpayers by using purchases by the VA as a yardstick by which state agencies can measure if they’re getting a reasonable deal.
It probably would make more sense if Medicare, with more than 55 million beneficiaries, served in that federal capacity rather than the VA. But Big Pharma, abetted by the industry’s Republican cronies, has consistently blocked efforts to allow Medicare to negotiate drug prices. The VA has no such constraint.
The drug industry, ambitiously, is positioning itself as a defender of California consumers. For example, industry representatives have warned that if the prices charged to state agencies were as low as what the VA pays, some drug companies might stop doing business with the likes of Medi-Cal, the prison system and the California Public Employees’ Retirement System, making certain meds unavailable.
The industry “has serious concerns about this poorly written measure because of the negative impact it will have on Californians,” said Pricilla VanderVeer, a spokeswoman for Pharmaceutical Research and Manufacturers of America, a trade group.
I asked Kathy Fairbanks, a spokeswoman for the No on 61 Campaign, if she’d characterize sky-high drug prices as a problem for patients. No, she said, that’s not how she’d put it.
“It’s an issue, how about that?” Fairbanks allowed.
“Healthcare and healthcare costs are top of mind for a lot of people,” she said. “However, Proposition 61 isn’t the answer.”
I asked Fairbanks if she was taking any prescription meds.

“No,” Fairbanks answered. “Are you?”
I told her that, as a person with Type 1 diabetes, I’ve watched helplessly as the price of insulin has tripled since 2002.
“Oh,” Fairbanks replied.
Oh indeed.
No one’s saying drug companies shouldn’t recover the costs of developing and marketing drugs, or that the industry shouldn’t enjoy reasonable profit for its efforts.
But what Mylan and other maestros of greed show us is that this is an industry that fleeces the most vulnerable members of society, and rewards itself handsomely for its morally dubious behavior. From 2007 to 2015, Mylan’s CEO — daughter of Democratic Sen. Joe Manchin of West Virginia — saw her total compensation soar from $2.5 million to $19 million, according to regulatory filings.
The Drug Price Relief Act wouldn’t force pharmaceutical companies out of business. It simply would provide a mechanism for state programs to pay something closer to fair prices for medication.
The fact that the drug industry is willing to spend as much as $100 million to keep that from happening tells you all you need to know.

Discounts Aren't Enough to Halt Outrage At High EpiPen Prices

by Alison Kodjak - MPBN
The EpiPen, an injectable drug that reverses severe allergic reactions, just got a little cheaper for some consumers. 
The device's manufacturer, Mylan NV, announced Thursday that it will offer coupons worth as much as $300 off a two-pack. 
The move is a reaction to harsh criticism from consumers and several lawmakers over repeated price increases that have boosted the cost of the medication to more than $600 from less than $100 just a few years ago. 
The company says it will offer the discounts to patients whose insurance doesn't cover the costs because of high deductibles or limited pharmacy benefits. 
But coupons may not be enough to tamp down anger over the price hikes. 
"This step is much more a PR fix more than a real remedy," Sen. Richard Blumenthal, D-Conn., said in an interview Thursday. "What's needed is robust, real action to lower the price for everyone, not just a select few." 
He says the EpiPen has such enormous market share that the company may be violating antitrust laws by exploiting that. A report by the health care website Stat says some of Mylan's contracts to give schools free or discounted EpiPens may have done just that, because they bar the schools from buying competitors' products.
Mylan told Stat that the provision restricting school purchasing has since been discontinued, but did not say when it was halted. 
Blumenthal is just one of several lawmakers who have called for investigations into Mylan's business practices and have asked for justifications of its price increases in recent days. He and a few others say the discounts aren't enough. 
Blumenthal sent a letter to the company earlier this week demanding that it lower the price. 
Sen. Charles Grassley, R-Iowa, sent a letter to Mylan demanding an explanation for the increase. And Sen. Amy Klobuchar, D-Minn., has asked the Federal Trade Commission to investigate whether Mylan has violated antitrust laws in its marketing of the EpiPen. 
Rep. Elijah Cummings, D-Md., says his Oversight and Government Reform Committee would hold hearings. "Offering a meager discount only after widespread bipartisan criticism is exactly the same tactic used by drug companies across the industry to distract from their exorbitant price increases," Cummings said in a statement.

Importance of Boston City Council supporting single-payer health care reform
By Ture Richard Turnbull

Jamaica Plain (Mass.) News, Aug. 22, 2016
The Boston City Council will take a bold step on Wednesday, August 24, by passing a resolution reaffirming its support for a single-payer health care system.  The resolution calls upon the state legislature in the upcoming 2017-2018 legislative session to propose and pass a measure to achieve a single-payer system in the Commonwealth.
This resolution is an extremely important endorsement for true health care reform that would make health care a right for all Massachusetts citizens and “provide availability and affordability of healthcare for all Massachusetts citizens.”
In 2001 the Boston City Council passed a similar resolution supporting single payer (also known as Improved Medicare for All). In 2008 the Commonwealth adopted Chapter 58 in an attempt to cover more people by mandating that everyone must buy health insurance or pay a stiff fine; but it lacked the ability to control health care costs. We now have the Affordable Care Act (ACA) that is largely based on Chapter 58. It does cover more people, but it is still unable to control costs. In Massachusetts there are about 300,000 people who are uninsured and many more who have insurance, but the co-pays, deductibles, co-insurance and high cost of medications make it impossible to access the medical care they need.
We need to ask ourselves why our present health care system fails to provide everyone with affordable, high quality coverage. If we look at the money trail it is clear that the private health insurance companies, the pharmaceutical corporations, and the big hospital groups are stashing away billions of dollars while patients are struggling to pay for needed and routine medical care.
We have a profit-based or market-based system that basically allows the health insurance companies to make huge profits by skimping on medical care creating a large profit margin that satisfies their shareholders. The pharmaceutical companies are on a rampage to raise prices on their prescription drugs to the point that in some cases life-saving medications for HIV, hepatitis C, and cystic fibrosis will cost as much as $300,000 per year. These corporations say they need the money for research and development, but most of the money goes to the CEOs with obscene salaries and to payouts to satisfy their shareholders. We need a health care system that is patient-centered not market-based.
Why should Massachusetts move to a single-payer system?
• It guarantees access to medical care for everyone, up front, with no co-pays, deductibles, or high out-of-pocket costs.
• It is continuous from birth to death, no eligibility requirements if you reside in Massachusetts, with no loss of coverage if you change or lose a job, and no need to stay in a bad job just because of the health insurance it provides.
• Businesses and municipalities would benefit because they would no longer be responsible for providing health insurance for their employees. Instead they would pay a payroll tax that would be predictable for long-term planning and in most cases would cost less than what they pay now, allowing for growth in businesses and more funding for vital municipal programs such as schools and fire and police for towns and cities.
• A single-payer system would be funded by income taxes made as progressive as possible under Massachusetts law, a business contribution through a payroll tax, and possibly taxes on unearned income. State income taxes might rise for some people, but the rise in taxes would be in most cases much less than what we pay now for health insurance premiums (around $22,000?!?! for a family of four), co-pays, deductibles, co-insurance, all of which would be eliminated.
• Private health insurance companies would be streamlined to cover only things not covered by the single-payer system. This would eliminate the wasted money spent on unnecessary administrative functions and the profits that are siphoned off the system estimated to be around 30% of total health care expenses for the state. Pharmaceutical companies would be forced to negotiate their prices with the single payer administration. This would keep the cost of medications affordable and set better guidelines for development of new drugs.
• Hospitals and large medical groups would be funded by a negotiated budget for all hospital expenses. Capital improvements would have to be approved by the single payer administration to avoid duplicated services that aren’t necessary for the system.
• A single-payer system is a patient-oriented system that would reduce health disparities since everyone is covered, and improve the quality of care. It would also strengthen the healing power of the doctor-patient relationship by giving doctors the right to make decisions about medical care instead of insurance bureaucrats allowed full choice of doctors. A single-payer system is based on the premise that a healthy society promotes opportunities for the young, comfort and dignity for the elderly, and good health care for families that make up the workforce of the country.
The timing of the resolution by the Boston City Council is tremendously important. A single-payer system is being championed by candidates across the country and it is now a mainstay of the large and growing progressive movement. In Massachusetts there are many new candidates who will be added to the strong group of legislators who already support a single-payer system. The primaries will be held September 8th and it is extremely important for everyone to vote and to support the candidates who will vote for a single-payer system. Cities and towns across the Commonwealth have the incentive now to follow the Boston City Council and make resolutions of their own to support a single-payer system. The 2017-2018 legislative session will show whether we have the political will to achieve what almost all the other countries in the world already provide, a single-payer (Improved Medicare for All) system that covers everyone with high quality care, is affordable, sustainable, and equitable.
Thank you Boston City Council!

Big Obamacare Rate Increases Don't Reflect What People Actually Pay––Wrong! 

How many people in the individual health insurance market don't get a subsidy to pay for their health insurance or wouldn't be eligible for one it they did buy it?

by Bob Laszewski - Health Care Poicy and Marketplace Review

Here is what an Obama administration spokesperson said yesterday about all of the big 2017 Obamacare rate increases: "Headline rate increases do not reflect what consumers actually pay," said Kathryn Martin, acting assistant secretary for planning and evaluation at the Department of Health and Human Services.

What she is once again referring to is that 85% of those getting subsidies could get their rate increases eliminated or blunted by the subsidies. It is worth pointing out that the consumer only avoids the big increase if they are in, or move to, the lowest or second lowest cost Silver Plan.

Staying with a higher priced plan they might now be in will not avoid the increases.

And, once again, the administration doesn't tell us that moving to a lower price plan may require higher deductibles and co-pays and more limited provider networks.

But more importantly, why does this administration, and so many Obamacare supporters that parrot this line, continue to ignore the many millions of people who do not get a subsidy and have no choice but to take the full whack from these rate increases if they want to stay covered?

The administration did appear to accomplish this week's spin goal of getting a message out that Obamacare is doing just fine. Here are some of the headlines driven by the administration's press briefing as they appeared in Kaiser Health News today under the heading: "HHS Analysis Says Subsidies Will Help Buffet Consumers From Marketplace Turmoil:"
  • The Hill: "White House: Most Obamacare Users Will Be Shielded From Premium Spikes"
  • Modern Health Care: "HHS Says 2017 Obamacare Plans Will Be Affordable Despite Insurer Exits"
  • Morning Consult: "HHS Report: Most Marketplace Consumers Will Have Affordable Coverage Options"
  • Dallas Morning News: "HHS Department: Fear Not, Obamacare Will Remain Competitive"
How many people in the individual market do not get a subsidy––and are not shielded from these increases?

Also this week, Mark Farrah Associates, an insurance industry data aggregator and web publisher, did take a look at that question. They looked at all of the individual health insurance regulatory filings in each of the states.

Here's what they found:

As of February 2016, 7.5 million people bought individual coverage outside the exchanges and therefore did not get an exchange subsidy. They reiterated the administration's claim that 12.7 million people bought coverage in the exchanges as of last February.

In fact, by March, only 11.1 million people had completed/paid their enrollments with only 9.4 million getting a subsidy and 1.7 million not getting one.

Adding the 1.7 million not getting a subsidy on the exchange to the 7.5 million off the exchange not being subsidized as of February, there are apparently about 9.2 million people in the U.S individual health insurance market that do not get a subsidy!

Now, some of these 9.2 million could be in grandfathered plans soon to be terminated, or even in limited medical plans still on the books. But any new policy these people would have to buy would have to be Obamacare compliant in order for them not to face the fine.

While this estimate serves to approximate what the market looks like, it is not definitive.

You would think with all of the endowment money the likes of The Commonwealth Fund or The Kaiser Family Foundation has someone would have attempted to find out how many people are out in the cold having to pay the full premium, deductibles, and rate increases for their coverage. After all, how many times have you seen a study, poll, or report from these folks supportive of the Affordable Care Act's accomplishments––particularly the good the law has done to expand coverage for the poor? Are they also not interested in the middle class?

And of course, this data only looks at the people who have bought a policy. While we know that only about 40% of the subsidy eligible have bought a policy, how many of those not subsidy eligible are still without any coverage?

Arguments referring to the 85% of those in the exchange getting a subsidy, in the narrowest sense, are correct. They are also incredibly disingenuous.

But you wouldn't know that reading these headlines.