Health Care Reform Articles - December 6, 2015

NOVEMBER 23, 2015

The Pfizer–Allergan Merger Is a Disgrace

BY JOHN CASSIDY

In an announcement on Monday morning, Pfizer, the big drug company, whose headquarters are on East 42nd Street, in Manhattan, said that it is merging with one of its competitors, Allergan PLC. Ian Read, a Scottish-born accountant who is Pfizer’s chairman and chief executive, said that the proposed deal, which is valued at a hundred and sixty billion dollars, would “create a leading global pharmaceutical company with the strength to research, discover and deliver more medicines and therapies to more people around the world.”

On Wall Street and in the world of big pharma, that statement will raise chuckles. It is widely acknowledged that the primary impetus for the deal is a financial one. In merging with Allergan, which is based in Dublin, Pfizer intends to move its corporate residency to Ireland, where the corporate tax rate is just 12.5 per cent, compared to thirty-five per cent for a company of its size in the United States. Over the next few years, the merger could save Pfizer billions of dollars in taxes and deprive the U.S. Treasury of the same amount.

Tax-driven deals of this nature are known as “inversions,” and they are becoming increasingly common. Burger King, Liberty Global, and Medtronic are among the U.S. corporations to have carried out mergers that moved their headquarters abroad. Last year, Treasury Secretary Jacob Lew said that inversions were “wrong,” and that he would try and restrict them. Only last week, the Treasury Department issued some new administrative guidelines in this area. Without actual legislation, though, there isn’t very much the Obama Administration can do to prevent these exercises in corporate tax-dodging, and Republicans on Capitol Hill have displayed little eagerness to coöperate in a crackdown.

The Pfizer–Allergan deal will be the biggest inversion yet, and it is nothing short of a disgrace. Drug companies like Pfizer have long benefitted from taxpayer-funded research carried out under the auspices of organizations like the National Institutes of Health and the National Science Foundation. Now, Pfizer is seeking to avoid paying the taxes that are due on its profits, particularly profits generated by its overseas subsidiaries. Even though the Obama Administration doesn’t have the legal powers to block the Allergan transaction, it should seek to shame Pfizer and its board of directors into calling it off.

http://www.newyorker.com/news/john-cassidy/the-pfizer-allergan-merger-is-a-disgrace?mbid=nl_151124_Daily&CNDID=22403094&spMailingID=8286786&spUserID=MzE0Njg2MTc4MDMS1&spJobID=802375160&spReportId=ODAyMzc1MTYwS0

Pfizer’s Plan to Leave U.S. Unsettles Drug Lobbyists

By GARDINER HARRISNOV. 25, 2015

WASHINGTON — Pharmaceutical giant Pfizer has long been the most politically active drug maker in Washington, and its representatives have tended to wrap themselves in the American flag while pressing their concerns with lawmakers and regulators.

So when the company announced this week that it would abandon not only the flag but the United States, its planned move to Ireland stunned the medicine industry’s lobbying corps — not the least because Pfizer’s chief lobbyist, Sally Susman, is the daughter of one of President Obama’s biggest, most generous benefactors, Louis Susman.

Ms. Susman, a former Clinton administration staff member and a major fund-raiser in her own right for Mr. Obama and Hillary Rodham Clinton, must now make the argument to Washington that cutting her company’s tax contributions to the United States Treasury by moving its headquarters to Dublin is actually good for the United States.

Mr. Obama’s Treasury Department has twice changed tax rules to dissuade such “corporate inversions,” and Republicans and Democrats alike — from the president to the new speaker of the House, Paul D. Ryan — have pressed for a tax-code rewrite to thwart them.

“Ironically, an inversion makes it easier for an American company to invest in the U.S. and less likely that it will be encumbered by competitive tax disadvantages — or acquired by a foreign competitor,” Ms. Susman, Pfizer’s executive vice president for policy, external affairs and communications, said in an emailed statement Wednesday that echoed those made in phone calls by her boss, Ian C. Read, Pfizer’s Scottish-born chief executive.

It is a talking point that six veteran lobbyists for other pharmaceutical companies and organizations said was causing the industry serious heartburn.

http://www.nytimes.com/2015/11/26/us/politics/drug-lobbyist-discomfort-over-pfizers-leaving-us.html?smprod=nytcore-iphone&smid=nytcore-iphone-share&_r=0

Turing reneges on drug price cut, rival’s version sells well

By Associated Press November 25 

TRENTON, N.J. — After weeks of criticism from patients, doctors and other drugmakers for hiking a life-saving medicine to more than 50 times its former price, Turing Pharmaceuticals is reneging on its pledge to cut the $750-per-pill price.

Instead, the small biotech company is reducing what it charges hospitals, by up to 50 percent, for its parasitic infection treatment Daraprim. Most patients’ co-payments will be capped at $10 or less a month. But insurers will be stuck with the bulk of the $750 tab. That drives up future treatment and insurance costs.

Daraprim is a 62-year-old pill whose patent expired decades ago. It is the preferred treatment for a rare parasitic infection, toxoplasmosis, which mainly threatens people with weak immune systems — such as organ transplant and HIV patients — and pregnant women, because it can kill their baby.

Carlos del Rio, chairman of the HIV Medicine Association, called Turing’s changes “just window dressing.”

Turing’s move comes after a pharmacy that compounds prescription drugs for individual patients, Imprimis Pharmaceuticals, started selling a custom-made version for 99 cents per capsule. Those sales were not a factor in Turing’s pricing strategy, chief marketing officer Nancy Retzlaff said Wednesday.

Del Rio noted that while hospitals treat many patients initially, most are then treated at home for a couple of months, so the lower hospital price doesn’t help.

https://www.washingtonpost.com/business/economy/turing-reneges-on-drug-price-cut-rivals-version-sells-well/2015/11/25/d2c22bd8-93cd-11e5-b5e4-279b4501e8a6_story.html?hpid=hp_hp-more-top-stories_ap-turing-11pm%3Ahomepage%2Fstory

Turn the Volume Down on Drug Ads

By THE EDITORIAL BOARDNOV. 27, 2015

Watching television these days means sitting through ads for drugs to ease pain, induce sleep, overcome sexual dysfunction, alleviate depression, ease urinary tract symptoms and more. Some patients say the ads are helpful, but many doctors warn that they are often misleading.

The American Medical Association’s House of Delegates voted this month in favor of a ban on direct-to-consumer advertising of prescription drugs and medical devices. Its officers argued that such advertising “inflates demand for new and more expensive drugs, even when these drugs may not be appropriate.”Only two nations in the world, the United States and New Zealand, allow consumer drug ads.

A survey by the Kaiser Family Foundation published in late October found that a whopping 89 percent of the public favors requiring the Food and Drug Administration to review prescription-drug ads for accuracy before they are broadcast. The F.D.A. currently does little to crack down on them, possibly fearing it would violate court rulings protecting commercial free-speech rights. It has never imposed civil fines on a company for a misleading ad or promotion.

Supporters of the ads say they educate and inform patients about drugs their doctors might not mention, encourage discussions between doctors and patients, and can help patients take more responsibility for their own health care. But they can also lead to patients’ demanding inappropriate drugs from their doctors. And they encourage the idea that there is a drug for every ill, even for conditions consumers might never have thought to treat.

http://www.nytimes.com/2015/11/27/opinion/turn-the-volume-down-on-drug-ads.html?smprod=nytcore-iphone&smid=nytcore-iphone-share&_r=0

Anger over drug prices driving support for Democrats' ideas

WASHINGTON — Most Americans believe that the prices of brand-name prescription drugs have become unreasonable, and their dismay is leading to wide support for government action to keep costs down, including letting Medicare negotiate prices with drug companies, according to a new poll by STAT and the Harvard T.H. Chan School of Public Health.

The poll found strong support across party lines for the Medicare negotiations idea, which is a centerpiece of all of the Democratic presidential candidates’ proposals to contain drug costs.

About 7 out of 10 Americans, including two-thirds of Republicans, said Medicare, the federal health insurance program for older and disabled Americans, should be able to negotiate lower prices for all prescription drugs. Another 13 percent support negotiations for just high-cost drugs for illnesses such as hepatitis C or cancer.

But there are also signs that the strong public support may be less about a specific proposal and more about the general idea that the government should do something — mainly about sky-high prices for new drugs and the jaw-dropping increases for older medicines that have been trumpeted in headlines.

More than 9 out of 10 people said it was unreasonable to raise the price of a life-saving antiparasitic drug used by people with AIDS from $13.50 to $750 a pill, a step recently taken by Turing Pharmaceuticals. Similar numbers called it unreasonable to price a new drug that cures hepatitis C at $1,125 per pill — nearly $100,000 for a full course of treatment — a decision by Gilead Sciences that drew widespread scrutiny.

More broadly, about three-quarters of the public believe the prices of brand-name prescription drugs are unreasonable, while 1 in 4 expressed that view about generics.

http://www.statnews.com/2015/12/01/stat-harvard-drug-prices-poll/

Martin Shkreli, the Bad Boy of Pharmaceuticals, Hits Back

By JULIE CRESWELL and ANDREW POLLACKDEC. 5, 2015

Photo

Martin Shkreli was trying to explain himself, so he turned to YouTube.

In the conference room at Turing Pharmaceuticals, the company he heads, his fingers flew across a laptop keyboard, and up popped a YouTube video on a large wall screen. It was a heartfelt appeal from three young brothers in North Dakota who suffer from a degenerative and often fatal brain condition. “Only 300 people in the country have this disease,” Mr. Shkreli said.

Why show the video? “I invented a new drug,” to treat the disease, he said, shrugging nonchalantly. “But it’s hard to sell a drug for 300 people, to go through the process. You have to charge a lot per person to make it a viable product.”

His point was that new drugs — especially for rare conditions — don’t come cheap and someone has to pay for them. This is more truism than earth-shattering revelation. But Mr. Shkreli has become a public villain for twisting that notion to apply to a decades-old drug that Turing merely acquired. By raising the price of that drug overnight to $750 a pill from $13.50, Mr. Shkreli became a caricature of pharmaceutical industry greed.http://www.nytimes.com/2015/12/06/business/martin-shkreli-the-bad-boy-of-pharmaceuticals-hits-back.html?action=click&pgtype=Homepage&region=CColumn&module=MostViewed&version=Full&src=mv&WT.nav=MostViewed

Kentucky, Beacon for Health Law, Now a Lab for Its Retreat

By ABBY GOODNOUGHNOV. 27, 2015

LOUISVILLE, Ky. — Carolyn Bouchard, a diabetic with a slowly healing shoulder fracture, hurried to see her doctor after Matt Bevin was elected governor here this month.

Ms. Bouchard, 60, said she was sick of politics and had not bothered voting. But she knew enough about Mr. Bevin, a conservative Republican who rails against the Affordable Care Act, to be nervous about the Medicaid coverage she gained under the law last year.

“I thought, ‘Before my insurance changes, I’d better go in,’ ” she said as she waited at Family Health Centers, a community clinic here.

Over the last few years, Kentucky captured the nation’s attention as the only Southern state to wholly embrace the health care law, most significantly by expanding Medicaid in 2014 to cover an additional 425,000 people so far. Now, with Mr. Bevin promising to “repeal the expansion as it currently exists,” Kentucky may become a laboratory for the kind of rollback that the law’s opponents have so far only dreamed of.

Nationally, both parties saw the governor’s race as a crucial political test for the Affordable Care Act months after it survived a second major challenge before the Supreme Court.

Republicans were elated by Mr. Bevin’s sound defeat of Jack Conway, the state’s Democratic attorney general, seeing it as a blatant rejection of the health law and proof that it remains a giant liability for Democrats heading into 2016. Mr. Bevin won all but a few counties, including those with the largest percentage of residents on Medicaid.

For Democrats, Mr. Conway’s loss illustrated the challenges they may face motivating voters in next year’s presidential and congressional races, not least those the health law is helping. Low-income people, the beneficiaries of the expanded Medicaid program, are the least likely to vote, research has found. And the turnout this month in Kentucky, one of the poorest states, was particularly low: 31 percent.

http://www.nytimes.com/2015/11/28/us/kentucky-beacon-for-health-law-now-a-lab-for-its-retreat.html?smprod=nytcore-iphone&smid=nytcore-iphone-share

Drug industry warming to antibiotics, but resistance outpaces new products

By ANDREW JOSEPH

NOVEMBER 25, 2015

The problem with Obamacare’s mental-health ‘parity’ measure

by Dana Milbank

Obamacare expanded health insurance to millions of Americans. But what good is insurance if there are no doctors available to treat them? 

This month, I found out, first hand. I saw a woman falling through the cracks of the new health-care system, and I tried to help her.

The woman — let’s call her Isabella — is a naturalized U.S. citizen and housekeeper for a friend of mine. A few weeks ago, Isabella began having what seemed to be debilitating panic attacks. She was unable to work. She stopped eating. She would frequently burst into tears. She said she thought things would be easier if she were dead. She called at all hours asking for advice. During previous episodes, she had gone to the emergency room or paid doctors out of pocket who gave her prescriptions with no counseling for medicines such as Xanax that provided temporary relief at best. She badly needed mental-health treatment — and there was none available. 

Obamacare provides mental-health “parity,” meaning mental health is covered as well as any other condition — in theory, an important advance. But in practice, parity was meaningless for Isabella. She is enrolled in one of the CareFirst BlueCross plans from the Obamacare exchange, but when my friend and I searched for psychiatrists within 30 miles of Washington who took her plan, the CareFirst Web site returned none.

Next, we took Isabella to Metro Immediate & Primary Care, an urgent-care clinic; after a two-hour wait, a doctor said “I can’t do anything for you.” A nurse provided a list of psychiatrists who, we learned after calling them, also didn’t take her insurance. 

We tried various other places experts suggested: The 35 K Street Clinic: No good, because Isabella lives in Maryland, not the District. Mary’s Center, a community health-care group, and the Psychiatric Institute of Washington: Both said they weren’t taking new patients. The Women’s Center, a mental-health counseling nonprofit, said the same but offered to put Isabella on a lengthy wait list. 

Finally, we found something called Holy Health Care Services, which said Isabella could see a social worker now and a psychiatrist in the middle of next month. With luck, Isabella will get the treatment that she needs — and with more luck, CareFirst will reimburse her for it.

But that’s hardly a reassuring result. Isabella wouldn’t have found psychiatric help without two educated, connected and persistent advocates representing her. (After I made an inquiry for this column, Mary’s Center offered to see Isabella, but we declined.) What if you’re not well-off, well-educated or well-connected and you start hearing voices in your head telling you to shoot people — but you are told by place after place that no doctor is available to see you?

https://www.washingtonpost.com/opinions/the-problem-with-obamacares-mental-health-parity-measure/2015/11/27/f2c5fcfc-952b-11e5-a2d6-f57908580b1f_story.html

Instability in Marketplaces Draws Concern on Both Sides of Health Law

By ROBERT PEAR and ABBY GOODNOUGHNOV. 27, 2015

WASHINGTON — The latest turmoil in health insurance marketplaces created by the Affordable Care Act has emboldened advocates on both sides of the political spectrum, providing ammunition to conservatives who want to shrink the federal role and liberals who want to expand it.

UnitedHealth Group rattled federal officials when it announced last week that it was losing money in the insurance exchanges, saw no reason to expect improvements in 2016 and might pull out in 2017. Those concerns followed the collapse of 12 of the 23 nonprofit insurance cooperatives created with federal loans under the health law.

In addition, insurance markets in many states are unstable. Premiums are volatile. Insurers say their new customers have been sicker than expected. And the law is as divisive as ever. In the latest poll by the Kaiser Family Foundation, people reporting unfavorable views of the law outnumbered those with favorable ones, 45 percent to 38 percent.

Conservatives take the trends as confirmation of their pessimistic forecasts, another reason to repeal as much of the Affordable Care Act as they can. Liberals, on the other hand, say the uneven performance of private insurers strengthens the case they made unsuccessfully in 2009-10 for a “public option” — a government-run health plan that would compete with private insurers.

Whether the problems in the marketplaces are just temporary setbacks for the law, as the White House contends, or signs of fundamental problems, as Republicans say, is not clear.

http://www.nytimes.com/2015/11/28/us/politics/instability-in-marketplaces-draws-concern-on-both-sides-of-health-law.html?smprod=nytcore-iphone&smid=nytcore-iphone-share

Medical residents seek to access prescription data

By Felice J. Freyer

Stories in the Boston Globe and reports from the attorney general’s office have shown that Partners charges more than its competitors for similar care. Attorney General Maura Healey has said this market “dysfunction” is pushing medical spending higher across the state.The price gaps are also the target of a ballot campaign from the Service Employees International Union, which is seeking to regulate hospital payments so Partners collects less money and its smaller competitors collect more.

Torchiana, a heart surgeon and longtime executive at Massachusetts General Hospital, became chief executive of Partners, Mass. General’s parent company, about nine months ago. In doing so, he quipped, he became the head of an “800-pound gorilla,” referring to Partners’ size and place in the health care market.

Boston-based Partners includes 10 hospitals and 6,000 doctors and is the largest private employer in Massachusetts. Its hospitals are world famous, but locally Partners is also known for being the most expensive health system.

Torchiana, in his speech, remarked on Partners’ role as the largest biomedical research institution in the country, with an annual research budget of about $1.4 billion, and offered some personal anecdotes. He recalled moving to Boston as a young newlywed to attend Harvard Medical School many years ago, settling into a basement apartment in Jamaica Plain, and how the apartment filled with snow after the blizzard of 1978.

Torchiana, known to friends and colleagues as “Torch,” said that after medical school and eight years of training at Mass. General, he felt “just barely ready” to work as a heart surgeon. He felt the same way when he left his role as head of the Mass. General physicians group to become chief executive of Partners, he said.

In an interview after his speech, Torchiana said that his new job is challenging, and that he takes it more to heart than he expected.

“I’ve always been prickly about criticism,” he acknowledged, “but it feels personal now.”

Priyanka Dayal McCluskey can be reached at priyanka.mccluskey@globe.com. Follow her on Twitter @priyanka_dayal.

Not Even Catharsis Is Seen in Senate Vote to Repeal Health Law

By DAVID M. HERSZENHORNDEC. 4, 2015

WASHINGTON — Senate Republicans have finally fulfilled their long quest to pass legislation repealing President Obama’s landmark health care law, and Congress will soon send the measure to the White House, where it might have a chance of being folded into origami or a fleet of paper airplanes, but no possibility of being signed into law.

While a veto is certain, putting the repeal measure on Mr. Obama’s desk will fulfill a pledge by Republicans, highlighting how fiercely they still oppose the law nearly six years after it was passed solely by the votes of Democrats, the only bill of such consequence in modern American history to be approved on a strictly party-line vote.

So, what next?

It is unclear that lawmakers have drawn constructive lessons from the experience, and there is no sign that either party will use the repeal vote as a cathartic turning point onto a more cooperative path. Republicans say they will spend the election year using the vote as part of a broader call to elect a president of their party to get rid of the Affordable Care Act altogether. Democrats concede cooperation from their side is unlikely.

http://www.nytimes.com/2015/12/05/us/politics/not-even-catharsis-is-seen-in-senate-vote-to-repeal-health-law.html?smprod=nytcore-iphone&smid=nytcore-iphone-share

Kendall Squared brings you dispatches from the world’s epicenter for biotechnology and drug discovery.

When Dr. Ankit Mahadevia founded Spero Therapeutics in 2013 to discover new antibiotics, he thought he would encounter some doubters. Though the spread of antibiotic-resistant bacteria was alarming the world’s health agencies, the drug industry had turned away from the field for a reason: The drugs were hard to make and hard to profit from.

But, Mahadevia said, people have responded positively to the company and its science in the years since — an indication that the work done by a small number of biotechnology and pharmaceutical companies is fueling at least some optimism for new antibiotics.

“The ecosystem is starting to remake itself,” he said.

Cambridge-based Spero is developing new treatments for so-called gram-negative bacteria, a class that includes E. coli. Gram-negative infections can be tougher to treat than other types because the cells have an outer membrane that acts as a barrier to drugs. One of the company’s programs, which it plans to start testing in humans next year, uses molecules called potentiators to bind to that membrane and open it, allowing drugs to penetrate and attack the bacterium.

The company, which has about 20 employees, has been working out of Atlas Venture’s Kendall Square offices, and is moving to its own space in Central Square early next year. It has partnered with Roche on one of its programs and has attracted investment from Merck — the two large pharmaceutical companies that, observers say, have been the most active in antibiotics recently.

http://www.statnews.com/2015/11/25/drug-industry-antibiotics-resistance/