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.
http://www.nytimes.com/2016/08/29/opinion/states-of-cruelty.html?emc=eta1&_r=0
America’s Shocking Maternal Deaths
by The New York Times Editorial Board
The rate at which women die during pregnancy or shortly after childbirth has fallen sharply in many nations as maternal care has improved. The United States — and particularly Texas — is a glaring exception.
In Texas, for instance, according to a study in the journal Obstetrics & Gynecology, the maternal mortality rate doubled from 17.7 per 100,000 live births in 2000 to 35.8 in 2014. Compare that with Germany, which had 4.1 deaths per 100,000 live births in 2014.
In California, the rate fell from 21.5 in 2003 to 15.1 in 2014, but in the remaining 48 states and the District of Columbia the rate increased from 18.8 in 2000 to 23.8 in 2014. The United States as a whole had the second-highest maternal mortality rate among 31 members of the Organization for Economic Cooperation and Development. Only Mexico had a higher rate.
A big part of the problem is the inequality embedded in America’s health care system. The 2010 Affordable Care Act made health insurance more available, but millions of families still cannot afford the care they need. And lawmakers in many states and many Republicans in Congress have repeatedly shortchanged reproductive health programs because of ideological opposition to contraception and abortion.
The maternal mortality rate’s surge in Texas defies easy explanation. Such increases typically happen during war, natural disasters and severe economic distress. State Republican lawmakers sharply reduced spending on women’s health care in 2011 in an effort to eliminate government funding of Planned Parenthood. The cuts, which took effect at the end of that year, don’t account for all of the increase, but they certainly don’t aid maternal health.
The biggest killers during and after pregnancy in Texas are cardiac problems and overdoses involving prescription opioids and illegal drugs, according to a recent report by a task force created by the Texas Legislature. It also found that black women in Texas had much higher maternal mortality rates than white and Hispanic women.
Texas lawmakers could address some of these problems by investing more in health clinics in minority communities and in mental health and addiction treatment. Expanding Medicaid to cover 1.2 million more poor people would also be very helpful. Texas is one of 19 states that have refused to expand Medicaid under the Affordable Care Act, despite the law’s generous terms, with the federal government picking up nearly all of the cost for low-income families.
Texas can also learn from California, which has organized doctors, hospitals, insurance companies and public interest groups in a collaborative to focus on maternal mortality. The group has developed state-of-the-art treatments for causes of maternal mortality like hemorrhages and pre-eclampsia, a condition characterized by high blood pressure and organ damage.
But even California could go further. Despite some improvement, its maternal mortality rate far surpasses that in nations like Germany and Britain, where the rate is 6.7 per 100,000. One reason for Britain’s low rate is a mandatory system of confidential reviews, in place since 1954, of every maternal, newborn and infant death to determine what went wrong and how doctors and hospitals can improve. That’s easier in Britain’s single-payer, government-run health system, but it should not be impossible for state governments to develop something along these lines.
One of the United Nations’ Millennium Development Goals was to reduce global maternal mortality by three-fourths between 1990 and 2015. The world missed that target but still reduced the mortality rate by 45 percent. Set against that progress, America’s record is unconscionable.
Cry Me a River, Aetna
by Wendell Potter - Common Dreams
You might be thinking, based on what insurance company CEOs have been saying over the past few weeks, that carriers are awash in red ink because of Obamacare and would surely go bust if they had to keep paying the medical claims of their Obamacare customers for even one more year. You might even be shedding a tear or two for their poor shareholders.
Here, for example, is the grim news Aetna’s CEO, Mark Bertolini, delivered to Wall Street financial analysts a few days ago:
In light of a second-quarter pretax loss of $200 million and total pretax losses of more than $430 million since January 2014 in our individual products, we have decided to reduce our individual public exchange presence in 2017, which will limit our financial exposure.
This despite the fact that since January 2014, the date Bertolini mentioned above, Aetna has reported operating profits of $6.7 billion. That’s right. Even though Bertolini said Aetna hasn’t yet turned a profit on its Obamacare business, overall it has pocketed nearly $7 billion.
So even though Aetna is still hugely profitable, it will stop offering coverage in most Obamacare markets because its bean counters recently noticed what Bertolini described as a spike in “individuals in need of high-cost care.”
Bertolini went to insist that, “Providing affordable, high-quality health care options to consumers is not possible without a balanced risk pool.” (It actually is possible, as some of Aetna’s nonprofit competitors — including nonprofit Kaiser Permanente and Blue Cross Blue Shield plans across the country — are dealing okay with the current risk pool and are not running for the exits. Some are already operating in the black.)
Those pesky policyholders who need care
Here’s the thing you need to know. Most of the people who buy coverage on the public exchanges are relatively poor and relatively sick. That’s because most of them were not able to afford Aetna’s policies in the many years before Obamacare became law. Now that those folks can finally afford coverage, thanks to Obamacare’s income-based subsidies, they’re also finally able to see a doctor and pick up their prescriptions. In other words, they’re actually using their insurance.
To make matters worse — at least in the eyes of for-profit health insurance company executives — there are not enough healthy, wealthy and young people buying Obamacare plans to make the “risk pool” more to their liking.
Having worked for nearly 20 years in the health insurance business, I can assure you that the top priority of executives of the for-profit companies is not to make sure low-income Americans can get the medical care they need. Nope. Not a chance. Those guys consider every claim they pay to be a loss (hence the term “medical loss ratio”). They’re in this business to make a buck.
Their top priority — just as it is with most other New York Stock Exchange corporations — is to “enhance shareholder value.” And every three months, what those executives want more than anything else is to impress Wall Street with its profits, to “exceed analysts’ expectations.” If they can do that, they can pretty much be certain that their company’s stock price will go up. And when that happens, something else will go up: their net worth. That’s because all of the top executives of for-profit health insurers, without exception, are sitting on a big stash of their company’s stock.
Here’s another data point Bertolini didn’t mention when he was announcing the planned dumping of most of its Obamacare enrollees: Since March 5, 2009 — the day President Obama kicked off the debate on what would become Obamacare — Aetna’s stock price has increased 631 percent.
“It’s all about the money, money, money…”
One of the biggest beneficiaries of that big increase is none other than Mark Bertolini. According to the Hartford Courant, Bertolini received almost $28 million in compensation last year alone. Yes, $28 million. In one year. Almost $25 million of that was from gains in the value of Aetna stock that vested last year and on stock options the company gave him 10 years ago and which he exercised in 2015. (Note: Bertolini’s compensation also included $271,908 in perks, “mostly from the cost of using the corporate aircraft for personal use,” the Courant reported.)
And that’s not all, folks. Bertolini last year also received an additional $6 million in restricted stock and more than $8 million in stock options “whose ultimate value will be determined in future years.”
If you look at Aetna’s proxy, which the company filed with the SEC in April, you’ll see that at the end of 2015, the market value of the units of Bertolini’s stock that hadn’t yet vested totaled almost $44 million.
If you are an executive of a for-profit insurer, and you have to dump poor, sick people to meet your shareholders’ and analysts’ profit expectations — and to get quite a bit richer yourself — so be it. As I’ve written in the past, Aetna, in particular, is no stranger to that practice.
Exiting Obamacare? Sort of.
After announcing Aetna’s exit from most Obamacare exchanges in 2017, Bertolini made a point of telling those Wall Street analysts that his company would continue to offer coverage to people “off-exchange” in the “vast majority” of counties where it currently insures the Obamacare customers it will be dumping at the end of 2016.
Why? Because most of the people who buy coverage on the individual market “off-exchange” are healthier and wealthier than the poor folks unlucky enough to have pre-existing conditions — the folks insurers like Aetna shunned, legally, before Obamacare — and who can’t afford coverage without the financial help from the government they can get only if they enroll in a plan on an Obamacare exchange.
If you happen to be flush enough to be able to buy a policy off-exchange, you more than likely have not had to postpone needed care in the past like many of those poor folks previously considered by industry executives to be “uninsurable.” If you’re young and healthy, Aetna and the other for-profits will welcome you with open arms because you probably won’t need to file many medical claims.
Taxpayers delivered a boatload of profits
Now, here’s something else you need to know that most of the media ignored. Aetna made a boatload of money between April and June of 2016. Both revenue and profits were up considerably over the same period in 2015. Aetna’s operating earnings increased 8.5 percent, from $722.1 million during the second quarter of 2015 to $783.3 million in the second quarter this year. Total revenues for the quarter increased to almost $16 billion.
On a per-share basis, the company’s operating earnings more than exceeded analysts’ expectations, jumping from $2.05 a share during the second quarter of 2015 to $2.21 this year. Analysts had expected $2.12 per share. It’s not often that a company exceeds expectations that much.
Here’s something else you need to know about Aetna in particular. Its revenue growth “was primarily due to higher Health Care premium yields and membership growth in Aetna’s Government business, partly offset by membership declines in Aetna’s Commercial Insured products.”
During the first six months of this year, Aetna actually got almost as much revenue from taxpayers via the government’s Medicare and Medicaid programs ($13 billion) as it got from its privately insured customers ($14 billion). In fact, Aetna’s government business is growing while its commercially insured book of business is shrinking.
Aetna’s not alone. Most of the other for-profit insurers have also been losing private-paying customers for some time but more than making up for that loss from revenue they get from taxpayer-financed government health care programs.
And get this: Aetna and the other big insurers wouldn’t be getting as much profitable business from the government if not for Obamacare. Keep in mind that most of the newly insured Americans have coverage because of the Medicaid expansion made possible by Obamacare. Aetna and many of its competitors have benefited financially from this expansion because many states contract with private insurers to manage their Medicaid programs.
And then there is Medicare. Aetna and many other insurers participate in the Medicare Advantage program, the private alternative to traditional Medicare, and they’ve figured out how to convert a lot of the billions of dollars in revenue they get from the federal government to profits. And, according to the Kaiser Family Foundation, the Medicare Advantage program has been growing leaps and bounds in recent years, thanks to all the marketing dollars the insurers spend every year to attract Medicare beneficiaries.
In 2010 — the year Obamacare became law — 24 percent of Medicare beneficiaries were enrolled in Medicare Advantage plans (11.1 million people). This year, 31 percent of the 57 million Medicare beneficiaries are enrolled in MA plans (17.1 million people).
So, thanks to Obama — and more specifically, Obamacare — Aetna and its competitors are rolling in the federal dough. But, because of the self-serving desire on the part of the for-profit companies’ executives to exceed Wall Street’s expectations every three months, they’re not willing to tolerate for another New York minute an Obamacare risk pool that, in their opinion, is crowded with too many sick people. People they never wanted to insure in the first place.
For-profits could learn a thing from nonprofits
One of the reasons the big for-profits are not doing so well in the Obamacare marketplace is because, unlike many of the nonprofits health plans, they didn’t devote sufficient resources up front, like the Florida Blue Cross and Blue Shield company, to help them weather the volatility of the risk pool Bertolini complained about. As Bruce Japsen reported this week in Forbes:
Florida Blue said it began to prepare for Obamacare patients and their expensive medical claims three years ago when the rollout of coverage was dogged by technical issues of the Healthcare.gov web site. Back then, Florida Blue opened 20 retail centers across the state to sign up residents and the investment paid off.New Obamacare patients were assigned a care manager, generally a nurse who screens patients making sure they are getting outpatient care upfront before more expensive claims emerged down the road. In the first three years that Obamacare has been available, Florida Blue said more than 400,000 Florida residents have visited a retail center.
Contrast that with Aetna and its forprofit peers like United and Humana, both of which have also said they plan to greatly reduce their presence in the Obamacare marketplace. Because of the short-term focus of the for-profits’ caused by the need to please Wall Street every three months (and for executives to pad their own wallets), investing for the long haul like Florida Blue did is not likely to happen. And with shareholder value at stake, it’s an easy call for those executives to abandon customers who are most in need of health insurance.
Executives of the nonprofits, fortunately, are not under the same pressure from Wall Street and their fellow executives and, frankly, are able to view the world — and the Obamacare marketplace — a little differently.
“I view it through the lens of my mission,” Kaiser Permanente CEO Bernard Tyson told Modern Healthcare reporter Bob Herman last week. “It obligates to us to figure it out, not to get out.”
Tyson said his company, a $61 billion system that includes health plans, hospitals and medical groups, is “absolutely” sticking with the exchanges over the long term.
“The idea that I would turn my back on a segment of the American population who really needs the coverage and the care — I’m in for the long haul,” Tyson said.
It’s too bad — especially for the millions of people who will soon be dumped by their for-profit insurers — that other CEOs don’t share Tyson’s mission. Unfortunately, if they did, Wall Street would not be happy. And, of course, nothing is more important than making Wall Street happy.
by David Lazarus - LA Times
As sky-high EpiPen costs show, price gouging of patients by greedy drug companies is one part of our dysfunctional healthcare system. Another is what may appear to be the arbitrary way that insurers decide what co-pay to charge.
Santa Ana residents William and Phyllis Stevens encountered this recently when they were both prescribed the same cream for pre-cancerous skin growths.
One had a co-pay of $20, the other a co-insurance cost of $300. And the much-higher charge was levied for a version of the medicine that was weaker than the cheaper version — yet had jumped nearly 1,500% in price since 2009.
Welcome to Crazy Town.
Insurers’ decisions about which drugs will be placed on which pricing tier can have a significant effect on patients.
Tier 1 and Tier 2 drugs typically will be generic or commonly prescribed medications and will have lower co-pays. Drugs on higher tiers will be regarded by the insurer as “specialty” meds and will come with higher co-pays or coinsurance costs.
Co-insurance is a percentage of the drug’s cost, usually about 25%, rather than a fixed co-payment.
“What this illustrates is that there are things we don’t think about when we buy insurance,” Kominski said. “But when we use insurance, we’re in for surprises.”
He said it’s a system “that requires us to be more and more sophisticated. But no one’s that smart.”
Shana Alex Charles, an assistant professor of health sciences at Cal State Fullerton, put it like this: “Much of our insurance system flies in the face of reason.”
The Stevens’ experience comes amid the ongoing fracas over pharmaceutical heavyweight Mylan boosting the price of EpiPens by more than 400% — the latest example of a drug company seeking sky-high payments for a medication that’s been around for decades.
Families have long relied on EpiPens to administer 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 purchased the rights in 2007 and proceeded to impose a string of double-digit price hikes.
On Monday, Mylan announced it will introduce a generic version of the EpiPen for half the cost. But that still will mean $300 for a pack of two and potentially will give Mylan even more control over the market by discouraging other generic manufacturers from trying to compete.
William Stevens, 83, told me he and his wife were both prescribed generic fluorourcil after their dermatologist found pre-cancerous growths on their skin. They were each given a prescription for a topical cream containing 5% of the drug.
The couple is insured by Scan Health Plan of Long Beach, which provides supplemental Medicare Advantage coverage to seniors. It’s a not-for-profit organization founded in 1977.
Stevens’ 81-year-old wife filled her prescription first. Because 5% fluorourcil was a Tier 3 drug for Scan, she was charged a $20 copay.
A few weeks later, Stevens filled his own prescription. This time, the pharmacist said she was out of 5% fluorourcil but could give the 0.5% strength. However, the pharmacist warned, this was a Tier 5 drug for Scan and thus would come with a coinsurance payment of $300.
Think about that: The same exact drug at a tenth of the strength costing more than 10 times as much.
“I asked the pharmacist how that could be,” Stevens recalled. “She had no explanation.”
There’s an explanation, but it’s not a very satisfying one.
Insurers use tiered pricing to steer members to the most affordable options, usually generics. In the case of fluorourcil, the 5% formulation is generic, so that’s the one Scan placed in its cheaper Tier 3.
The 0.5% version contains the same active ingredient but isn’t generic — it’s sold under the brand name Carac. So the insurer bumped it to Tier 5.
“It’s a loony situation,” acknowledged Sharon Jhawar, Scan’s vice president of pharmacy. “It’s maddening even to us.”
Loonier still, the manufacturer of Carac, Valeant Pharmaceuticals, has indulged in price hikes that make Mylan’s greed seem miserly by comparison. Valeant has drawn fire in the past for jacking up drug prices to astronomic levels, including a more than 700% increase in the price of heart medicine Isuprel.
In 2009, Jhawar said, a 30-gram tube of Carac sold for $160. It now runs closer to $2,500 — and that’s the discounted price negotiated by most insurers, she said. Valeant’s desired price is even higher.
Remember: Same active ingredient as the generic, only less.
I asked Valeant why the price of Carac has risen nearly 1,500% since 2009. The company sent me a statement that didn’t address that question.
Instead, it said Valeant, which replaced its chief executive in March, has set up a committee that “will take a disciplined approach to reviewing the company's pricing of drugs, and will consider the impact on patients, doctors and our healthcare industry partners.”
“While we will raise prices from time to time, we expect those price increases to be much more modest and within industry norms,” it said. “With respect to Carac, a lower-priced generic alternative is available.”
Well, that’s good news. Or maybe not.
Jhawar said Valeant gave permission last year for another drug maker, Spear Pharmaceuticals, to sell an “authorized generic” version of Carac until Valeant’s patent expires in 2021.
The price of that authorized generic? A mere $1,300 a tube.
http://www.latimes.com/business/lazarus/la-fi-lazarus-drug-copays-20160830-snap-story.html
The Lesson of EpiPens: Why Drug Prices Spike, Again and Again
by Elisabeth Rosenthal - NYT
When I was a kid in the late 1960s, I suffered from serious asthma attacks. About twice each summer, struggling for air, I received a shot of epinephrine drawn up in a syringe from the camp nurse. The relief was nothing short of miraculous.
Today that same tiny, lifesaving bolus of epinephrine — used mostly to treat severe allergic reactions — is delivered via sometimes elaborate devices called auto-injectors. Though the medicine itself hasn’t changed, the delivery devices have been protected by patents, enabling drug makers to charge ever escalating — sometimes prohibitive — prices for one of the oldest drugs in medical use.
Though Mylan, the maker of the EpiPen auto-injector, had been raising prices by 20 percent annually in recent years without much blowback, it set off political outrage last month by raising the price to over $600 for two pens just before parents were buying new EpiPens for their school-bound children. Heather Bresch, the chief executive of Mylan, suddenly found herself in the same penalty box as Martin Shkreli, the pharma bad boy, who last year raised the price of an old drug for parasites, Daraprim, by over 5,000 percent. Members of Congress called for hearings. Hillary Clinton denounced Mylan on Twitter.
To mitigate the widespread outrage, Mylan first announced that it would give insured patients $300 coupons to offset the higher price and then, last week, that it would make a cheaper generic version of its own product. Patients may have, once again, won a battle. But they are losing the war on high drug prices.
Ms. Bresch was in many ways acting in accordance with a core strategy in the pharmaceutical industry’s playbook — take something old and repackage it to make it new and patentable — and then see what price the market will bear. Sometimes extortionate prices are a predictable outcome. Yet the government has no real tools to curb them.
Many other old medications have been delivered in new packages in recent years, with startling price increases. Basic asthma inhalers, which once cost under $15 (and still do in many countries), cost $50 to $100 in the United States. A portion of the big price rises for insulin in recent years is attributable to new types of injectors to deliver the medicine. Long-off-patent emergency rescue drugs delivered by auto-injector — not just epinephrine, but also glucagon to ward off diabetic coma and naloxone to reverse opiate overdose — have seen particularly perplexing price escalations.
New devices can make it more convenient and safer to deliver a lifesaving drug during a medical crisis. But when is new packaging — often accompanied by bells and whistles of uncertain value — worth an exponential rise in price? That’s something a nation struggling with a $3 trillion health bill must consider, and it merits a response beyond a few days of executive public shaming.
Like so much in our overpriced medical system, today’s EpiPen debacle evolved from a laudable idea: Though shots of epinephrine have been used for over a century, the EpiPen — invented in the mid-1970s and approved by the Food and Drug Administration in 1987 — allowed a patient or a parent to easily administer the proper dose in an emergency. When an unlocked EpiPen is pressed against the thigh, a needle emerges to inject the medicine, even through clothes.
In recent decades it has become an increasingly attractive idea commercially as well: Research suggests that the incidence of allergies has been growing (a trend relentlessly publicized by Mylan). Also, “the social frenzy around allergies has spurred substantial demand,” said Dr. Aaron Kesselheim, an associate professor at Harvard Medical School and an author of an influential recent article about combating high drug prices, noting that many families buy multiple kits, for school, home and car. Schools and camps bought in — it was easier (and legally prudent, perhaps) to have auto-injectors at the ready, rather than to draw epinephrine into a syringe.
A dose of epinephrine, also known as adrenaline, costs about $1. But paying for a smoother delivery system might have seemed eminently reasonable when EpiPens retailed for $50, as they did in 2004. The cost-benefit calculation has become increasingly less rational as prices escalated — especially since the vast majority of EpiPens are thrown away when they expire after about 12 months, requiring another purchase.
Mylan has cleverly exploited market opportunities since it acquired the rights to the EpiPen in 2007. At first, it moved somewhat tentatively, slowly raising the price to about $250 by 2013.
That year, a start-up called Kaleo won approval for a talking injector, called Auvi-Q. “Now hold in place for five seconds,” the voice intoned before giving a countdown. Its price was about $400.
Perhaps as a response, in late 2013, Mylan began a series of more aggressive price increases for the EpiPen kit, so what was then about $250 is now $600, and includes two EpiPens and a training device. Other companies tried to sell other injectors at a slightly lower price, but competing with Mylan was tough, since the EpiPen seemed synonymous with the drug. One injector, Adrenaclick, costs $450, and as low as about $140 with a coupon for a two-pen kit.
“Doctors say, ‘My patients know how to use the EpiPen.’ Parents say, ‘They’re my kids, I trust this brand,’ ” said Doug Hirsch, the chief executive of GoodRx, a website that helps consumers shop for cheaper drugs. “People don’t think there’s a choice.”
That perception became nearly gospel in 2015, when Auvi-Q was withdrawn from the market because of concerns about unreliable dosing. Mylan could almost set the price wherever it wanted.
Mylan has tried to calm the waters by offering many patients $300 coupons to cover increased co-payments. But that is a Band-Aid — and a deceptive, high-priced one at that: While we consumers may be insulated from the charge at the pharmacy counter, our insurers are paying the increased rates, leading to premium rises next year. And our schools buy EpiPens with our tax dollars.Mylan’s intention to make a generic EpiPen, though it will help some patients, is likewise a calculated maneuver. If Mylan is prepared to offer a $300 generic injector, made in the same factories with the same components, why doesn’t it just sell the EpiPen for the lower price? The answer is all business and no medicine: Mylan can hang onto the market for doctors and patients who demand the trusted brand name, while cornering an incipient generic market.
There are many better solutions to price spikes: For example, Dr. Kesselheim suggests, the government could regard extreme prices as it does drug shortages, allowing for emergency imports of cheaper products. The United States patent office and the F.D.A. could be stingier in handing out market exclusivity for patents on drugs and delivery devices that offer little or no benefit. A national body could set price ceilings for essential medicines (as occurs in other countries), or review rate increases levied on products that are unchanged.
But hearings and a few days of uncomfortable interviews for Ms. Bresch (who makes $18 million a year) will not solve the underlying problem. The next EpiPen crisis is no doubt in the making, with patients already suffering from inexplicable rising prices for a much-needed drug, until that trip line of outrage is once again crossed.
EpiPen Maker's Latest Offer: Still Not Good Enough
by Robert Weissman - Common Dreams
Not good enough.
Mylan's public relations people should tell the company that drip, drip, drip responses to the EpiPen rip-off will only further enrage the public. It's not enough to blame insurance companies, it's not enough to offer coupons, and it's not enough to offer an overpriced generic version of their own branded product.
The company must roll back its unjustified and outrageous price increases.
The weirdness of a generic drug company offering a generic version of its own branded but off-patent product is a signal that something is wrong. Mylan knows its $600 per set of EpiPens is unsustainable, but aims to continue ripping off some segment of the marketplace - both consumers who do not trust or know about the generic and perhaps some insurers and payers constrained from buying a generic. The announced $300 price for Mylan's generic also comes in too high; the profitable price in Canada is roughly $200 for two, and the price in France is roughly half that.
In short, today's announcement is just one more convoluted mechanism to avoid plain talk, admit their price gouging and just cut the price of Epipen.
Last week, Mylan unsuccessfully sought with a convoluted coupon and patient assistance program to appease a public furious over its unconscionable price spikes for EpiPens. This week, Public Citizen and allies will deliver petitions signed by more than 500,000 Americans making clear that the only solution to unjustifiable price increases is a price rollback. And next week, Congress is back in session, when the heat will turn up still higher.
Mylan executives should be ashamed of themselves. But even if they are not, they should recognize that the issue is not going away until the company rolls back the EpiPen price.
The EpiPen case is not an outlier. It is reflective of out-of-control drug pricing. And the outrage over EpiPen prices is a harbinger of a rising public demand for far-reaching reform over drug prices, reform that restrains Big Pharma's monopoly pricing power.
The country has learned a great deal about EpiPens over the past two weeks. Here are highlights of what we know and where things are heading.
- Outrageous price increases. Mylan is jacking up EpiPen prices at a spectacular rate, with the price sextupling since 2007. At $600 for two pens, with most families buying multiple sets and the product expiring every year, EpiPens are now a major financial burden for many families - and out of reach for some.
- Price spikes cannot be justified; Mylan is raising prices "because it can." There is no legitimate rationale for Mylan's price increases. The company acquired rights to market the product in 2007, long after it was invented in connection with a Defense Department project. Mylan did not incur any research and development costs, and its price increases cannot be justified by reference to R&D expenses.
Mylan CEO Heather Bresch has, remarkably, argued that price increases are justified because Mylan has spent so much money promoting EpiPens, including lobbying for laws requiring schools to stock EpiPens. It's rather bizarre for a company executive to argue that price increases are required because of promotional expenditures - especially when those promotional efforts have increased sales.
No, the reason Mylan has increased prices, as a Forbes columnist noted, is "because they could." - Mylan's growing greed. Mylan's EpiPen rip-off is characteristic of a company that is operating more like a brand-name manufacturer than a traditional generic firm. This transformation is reflected in the company's spiking prices for numerous drugs, exorbitant CEO pay and decision to shed its American identify as part of a corporate "inversion" to avoid paying its fair share of taxes.
- Mylan's discounts: too little and too late. Last week, Mylan responded to mounting controversy with a false solution: providing deeper discount cards and an expanded patient assistance program. First, many consumers will not use the coupons or the programs. Second, many consumers with high deductibles or no insurance still will have to pay far too much for EpiPens -300 for a set of two - for every set they need. And Mylan's scheme does virtually nothing to alleviate the rip-off of the health care system, for which all Americans pay as consumers and taxpayers.
- The solution for EpiPen's price spikes: lower the price. Mylan is not going to quell mounting anger until it actually lowers prices. By way of marker, the price in Canada is roughly $100 per pen. In France, it is less than $100 for a set of two.
- The Great EpiPen Rip-Off is illustrative of broader problems: price spikes and monopolies. Prices for hundreds of drugs jumped more than 10 percent last year in the Medicare Part D program, according to a Politico analysis. The entire business model of brand-name Big Pharma is built around monopolies and exclusivities. Increasingly, generics are exploiting pricing power that comes from limited and inadequate competition in the generic industry.
- Price spike solution: tax windfall profits. Because price spikes are now pervasive and a built-in part of Big Pharma's and the generic industry's business models alike, we need a comprehensive solution. Congress should pass a tax on the windfall profits from unjustified price spikes.
- Solution: a more competitive generic industry. What was once an incredibly robust industry has rapidly consolidated in recent years. Generic prices are rising as a direct result. Where generics have no competition at all, measures such as permitting the U.S. Food and Drug Administration (FDA) to authorize marketing in the United States based on approvals overseas and speeding FDA approval of generic competitors - in both cases with extremely careful safeguards for quality and safety - may help. But major price reductions come not from one competitor for a product, but many. And that requires more competitors, period.
- Solution: Rolling back monopolies and exclusivities. Big Pharma's scandalous pricing system is based entirely on monopolies. Drug companies benefit from patent monopolies and an array of government-created exclusivities. Indeed, Big Pharma is lobbying right now for expanded exclusivities - one measure adding just six-month exclusivities in certain cases would cost consumers and taxpayers $10 billion. Getting control of drug prices in the United States will require limiting exclusivities - including those demanded by Big Pharma in international trade deals - and speeding generic competition when drug companies insist on unreasonable prices. Expedited generic competition is especially warranted in the many cases when U.S. government funding played an important role in developing a drug.
To add your name to the more than 500,000 calling on Mylan to reverse its disgraceful price spikes for EpiPens, go here.
Why Are We Paying $300 for an EpiPen That Holds Only $1 Worth of Medicine?
The High Cost of Charging Older People Much Higher Premiums
by Sarah R. Collins - The Commonwealth Fund
An estimated 11 million young adults ages 19 to 34 currently lack health insurance. Health insurers covet this age group as enrollees for their generally healthy status and lower cost risk. Bringing more of these uninsured young people into the Affordable Care Act (ACA) marketplaces would bring more balance to the marketplace risk pools, which some insurers complain are dominated by less healthy people.
One option for attracting young people being floated in policy circles is lowering premiums for this group by raising the limit on how much more insurers can charge older people relative to young people. The ACA bans insurers from charging people higher premiums on the basis of health or gender, but insurers are allowed to charge older adults up to three times what they charge young adults. This provision helps protect insurers from the greater potential health costs of older adults. Some have suggested that insurers be allowed to increase this so-called age band from 3:1 to 5:1 or higher, or allowing states to set their own age bands.
But recent research suggests such a policy change might result in only small coverage gains for young adults, while leading to significantly higher premiums and a loss of coverage for older adults. It also would cost the federal government significantly more.
Christine Eibner and Evan Saltzman of RAND found that loosening the age rating bands from 3:1 to 5:1 would decrease premiums for young adults by much less than it would increase premiums for older adults. For example, the researchers estimate that the change to 5:1 would increase annual premiums for the average benchmark silver plan for a 64-year-old from about $8,500 under current limits to $10,600, while lowering those for a 21-year-old from $2,800 to $2,100. This would come at a price tag of $9.3 billion in federal spending as a result of higher costs of tax credits for older adults.
This new federal expenditure would realize limited coverage gains. Older adults who were not eligible for tax credits would face the full amount of the increase, leading to an estimated 400,000 dropping coverage. While the change could bring as many as 4.4 million young adults into the marketplaces, 40 percent would come from employer plans, mostly from their parents’ policies. The estimated net gain in new coverage is thus only 1.8 million people.
Other research suggests that that current 3:1 age rating band tracks people’s spending over their lifetime relatively closely. Linda Blumberg and Matthew Buettgens of the Urban Institute find that, in contrast, moving to a 5:1 age band would “tend to undercharge young adults relative to their actual expenses and overcharge older adults relative to their actual expenses.”
If loosening the age rating bands shows so little promise, how else can we encourage more young adults to sign up for coverage? With a majority of uninsured adults citing affordability as a major reason for not getting coverage, greater outreach to young people would help. The vast majority of currently uninsured young adults have incomes that make them eligible for marketplace subsidies or Medicaid, according to a recent Commonwealth Fund brief. But enhanced subsidies and lower cost-sharing, such as lower copayments and deductibles, also may be required. And with more than one-third of uninsured young adults with qualifying incomes living in states that have not yet expanded Medicaid, the 19 states that have not yet expanded could accept the federal dollars available to them and expand their programs. As a recent federal report found, this might have the added benefit of lowering these states’ marketplace premiums.
Finally, more than two of five uninsured young adults are Latino, with some share of that group undocumented and thus not eligible for the marketplaces or Medicaid. Immigration reform would help make more young Latinos and others eligible for coverage, as would a loosening of the law’s restrictions on the eligibility of undocumented immigrants.
http://www.commonwealthfund.org/publications/blog/2016/aug/the-high-cost-of-charging-older-people-much-higher-premiums?omnicid=EALERT1090805&mid=jkpeasemd@gmail.com
Health care law to cost Mass. $162m over 10 years, report says
by Priyanka Dayal McCluskey - Boston Globe
Massachusetts will be responsible for at least $162 million in new costs over the next decade to fund the federal expansion of health insurance coverage, according to a new report.
The paper from the Pioneer Institute, a free-market-oriented Boston think tank, said that additional spending will squeeze the state budget and divert money from other priorities such as education and transportation.The costs come in the form of a fee that is part of the Affordable Care Act, which extended insurance coverage to millions of people. The law makes more Americans eligible for Medicaid and provides subsidies to many people on private insurance plans, depending on their level of income. Pioneer said it is the first organization to calculate the long-term costs of the fee.
Massachusetts will lay out at least $324 million over a decade, but half of that will be reimbursed by the federal government, Pioneer said. The fee will come out of the state’s Medicaid program, called MassHealth, which is funded by taxpayers and already costs more than $15 billion annually.
“Health care is sucking up all of the money,” said Joshua Archambault, senior fellow at Pioneer.
Insurers are also paying fees to fund federal health care coverage, which for many companies amounts to tens of millions of dollars a year. The fees for both insurers and the state will be suspended for a year in 2017, giving them a break from the costs.
“Ultimately, these added costs exacerbate the costs that the state, [insurers], and the health care system as a whole are struggling with,” said Eric Linzer, senior vice president at the Massachusetts Association of Health Plans, which represents insurers.
The Baker administration is planning a series of changes to rein in costs in the MassHealth program, which provides insurance to more than one in four state residents.
“We are focused on restructuring MassHealth in a way that both improves the quality and coordination of care and creates a more fiscally sustainable program for the Commonwealth,” MassHealth spokeswoman Michelle Hillman said in a statement.
The tyranny of corporatized health care: Time for single payer
By Craig Klugman, Ph.D.
Bioethics.net Blog, Aug. 24, 2016
In Illinois, Land of Lincoln insurance and Aetna announced that they are pulling out of the health insurance Marketplace. In other states, United HealthCare and Humana have announced pulling out of the exchanges. As a result, many newspaper headlines and political pundits have declared the Affordable Care Act (ACA, also known as Obamacare) to be in a “death spiral.”
Such statements are undermined by the latest studies showing the ACA is working. The Kaiser Family Foundation reported that three-quarters of people who lacked insurance before the ACA now have it. RAND Corp found that more people are receiving medical treatment and getting needed prescriptions as a result of the ACA. The ACA is accomplishing its intent—giving more people insurance coverage so that they can receive medical care and have their diseases managed. Preventive management is cheaper than intensive and expensive interventions after a disease has progressed.
An internal Aetna letter obtained by the Huffington Post and comments from Rep. Frank Pallone (D-NJ) suggest that Aetna’s move was not about losing money, but rather retaliation for the Department of Justice blocking the company’s proposed merger with Humana.
The Affordable Care Act leaves our health care subject to the whims of powerful corporations that exist to maximize profit and shareholder value, not to help policyholders access needed care. The health care of all Americans should not be held hostage by such companies.
In fifteen years as a professor of clinical bioethics and health policy, the one conclusion reached by every class I have taught is that the only long-term viable solution for affordable health care in this country is a single-payer system.
According to the United Nations Declaration of Human Rights, health care is a basic human right recognized by most industrialized nations. Even the U.S.-drafted Iraqi constitution guarantees every citizen a right to health care. In Canada and Sweden, the government is the insurer and provider of health care. In Germany, the government is the main insurer and while the provision of medical care is private, the government regulates reimbursement rates and drug costs. The U.K. has a government system of insurance and hospitals and a parallel private system. In managed systems, government regulation ensures that everyone has access to affordable care.
This contrasts with the U.S. where except for the VA and Medicare/Medicaid, insurance companies and medical providers dictate the terms and costs. Regulated systems prevent the game that Aetna is playing where people’s health come second to profit.
Critics of the Affordable Care Act state that the U.S. has the best medical care in the world. If by “best” one means the most expensive, then the U.S. does hold that honor. If one means longest life span, lowest infant mortality rate, and highest quality of health, then the U.S. ranks behind most industrialized nations. According to the CIA, we rank 43rd in life expectancy and 58th in infant mortality.
Single-payer saves money by eliminating third party payer administration and profit costs. The American Hospital Association reports that healthcare providers spend millions of dollars in time, technology and personnel managing dozens of competing and contradictory insurance company policies and forms.
To be sure, this would shake up the medical insurance industry, but the same companies complained that they would not survive the Affordable Care Act, which gave them 20 million new subscribers. Similar to the UK and Germany, these companies can offer private insurance plans for those who can afford them or who wish coverage above and beyond what the government insurance would provide.
The most economical and efficient solution is a single-payer system that keeps the goal of caring for people as the highest priority and protects Americans from the tantrums of private companies profiting on human suffering.
Craig Klugman, Ph.D., is a bioethicist and medical anthropologist who teaches at DePaul University.
http://www.pnhp.org/print/news/2016/august/the-tyranny-of-corporatized-health-care-time-for-single-payer
Bioethics.net Blog, Aug. 24, 2016
In Illinois, Land of Lincoln insurance and Aetna announced that they are pulling out of the health insurance Marketplace. In other states, United HealthCare and Humana have announced pulling out of the exchanges. As a result, many newspaper headlines and political pundits have declared the Affordable Care Act (ACA, also known as Obamacare) to be in a “death spiral.”
Such statements are undermined by the latest studies showing the ACA is working. The Kaiser Family Foundation reported that three-quarters of people who lacked insurance before the ACA now have it. RAND Corp found that more people are receiving medical treatment and getting needed prescriptions as a result of the ACA. The ACA is accomplishing its intent—giving more people insurance coverage so that they can receive medical care and have their diseases managed. Preventive management is cheaper than intensive and expensive interventions after a disease has progressed.
An internal Aetna letter obtained by the Huffington Post and comments from Rep. Frank Pallone (D-NJ) suggest that Aetna’s move was not about losing money, but rather retaliation for the Department of Justice blocking the company’s proposed merger with Humana.
The Affordable Care Act leaves our health care subject to the whims of powerful corporations that exist to maximize profit and shareholder value, not to help policyholders access needed care. The health care of all Americans should not be held hostage by such companies.
In fifteen years as a professor of clinical bioethics and health policy, the one conclusion reached by every class I have taught is that the only long-term viable solution for affordable health care in this country is a single-payer system.
According to the United Nations Declaration of Human Rights, health care is a basic human right recognized by most industrialized nations. Even the U.S.-drafted Iraqi constitution guarantees every citizen a right to health care. In Canada and Sweden, the government is the insurer and provider of health care. In Germany, the government is the main insurer and while the provision of medical care is private, the government regulates reimbursement rates and drug costs. The U.K. has a government system of insurance and hospitals and a parallel private system. In managed systems, government regulation ensures that everyone has access to affordable care.
This contrasts with the U.S. where except for the VA and Medicare/Medicaid, insurance companies and medical providers dictate the terms and costs. Regulated systems prevent the game that Aetna is playing where people’s health come second to profit.
Critics of the Affordable Care Act state that the U.S. has the best medical care in the world. If by “best” one means the most expensive, then the U.S. does hold that honor. If one means longest life span, lowest infant mortality rate, and highest quality of health, then the U.S. ranks behind most industrialized nations. According to the CIA, we rank 43rd in life expectancy and 58th in infant mortality.
Single-payer saves money by eliminating third party payer administration and profit costs. The American Hospital Association reports that healthcare providers spend millions of dollars in time, technology and personnel managing dozens of competing and contradictory insurance company policies and forms.
To be sure, this would shake up the medical insurance industry, but the same companies complained that they would not survive the Affordable Care Act, which gave them 20 million new subscribers. Similar to the UK and Germany, these companies can offer private insurance plans for those who can afford them or who wish coverage above and beyond what the government insurance would provide.
The most economical and efficient solution is a single-payer system that keeps the goal of caring for people as the highest priority and protects Americans from the tantrums of private companies profiting on human suffering.
Craig Klugman, Ph.D., is a bioethicist and medical anthropologist who teaches at DePaul University.
http://www.pnhp.org/print/news/2016/august/the-tyranny-of-corporatized-health-care-time-for-single-payer
Obamacare Premiums Set to Rise, Even for Savvy Shoppers
by Margot Sanger-Katz - NYT
In the last few years, even though premiums in the Affordable Care Act’s health insurance marketplaces were rising, most customers could avoid a big price rise by shopping for a cheaper plan.
Next year, according to a preliminary analysis, that is going to be a lot harder.
Even someone who shopped wisely this year and is willing to switch plans to get the best deal next year is looking at an average premium increase of 11 percent, according to an analysis of rate filings in 18 states and the District of Columbia provided by the McKinsey Center for U.S. Health System Reform.
That’s more than double the increase McKinsey measured last year for the same plans in the same group of states.
To get the best deal, more than half of last year’s bargain hunters will need to switch. The plans that were least expensive this year in the popular “silver” category are no longer the price leaders in most markets, according to the analysis. People who want to stay in their current plan — either because they like the coverage or want to keep a certain group of doctors and hospitals — could face much larger increases.
The national picture could be even worse. This analysis looks only at states that have publicly released all insurance filings for next year, and some of those states have the most stable markets. In many of the remaining 32 states with the health exchange plans, insurers have been requesting large price increases, and lower-cost insurers have left.
Most current customers will be insulated from the full increases. To help people afford insurance, the law offers sliding-scale subsidies to people earning less than 400 percent of the federal poverty level, which is around $16,000 for a single person. The analysis suggests that most people with a subsidy will see smaller price increases if they switch to the lowest-cost plan. But people earning higher incomes, who pay the full cost of their insurance, will face bigger price increases than before. So will the federal government, which will now pay more in subsidies for everyone else.
The Department of Health and Human Services has been highlighting the role of subsidies in buffering the effects of price changes. In a recent white paper, it estimated that, even if all premiums went up by 25 percent, a large majority of customers could still find plans that would cost them less than $75 a month. That report assumed that the income mix of customers in the marketplace would not change, and that all premiums would increase in perfect concert.
“We remain confident that the majority of marketplace consumers will be able to select a plan for less than $75 per month when open enrollment begins November 1,” said Marjorie Connolly, a department spokeswoman, in an email. “Last year, the average monthly premium for people with marketplace coverage getting tax credits increased just $4.”
Of course, the agency is also hoping that more people sign up for the plans this year, including some who pay the full cost of their premiums.
The new analysis looks at the least expensive plan in the most popular category, silver. When customers switch plans — this year 43 percent did so — many gravitate toward these plans. Our national average is weighted by the number of people eligible for the marketplaces in the parts of the country we analyzed. The rates in 14 states are still being considered by local regulators.
A broader look at premiums is likely to find even higher average increases. Charles Gaba, who runs the website ACASignups.net, has been scouring public sources of information about next year’s rates. He has calculated an average national rate increase of around 24 percent. Mr. Gaba’s numbers have some limitations compared with the McKinsey data — he is looking at averages across a wide range of individual insurance products, not just those in the Affordable Care Act markets.
And he has examined information only about plans that are returning from 2016, not new plans or carriers. But his estimate, too, is around double what he calculated last year around this time: 12 percent.
The larger premium increases for 2017 are not a surprise. Several predictable factors help explain them. Two government programs that helped insulate the insurance companies from big losses expire at the end of this year. And many insurers with low premiums in the past have found that their prices weren’t high enough to cover their costs. Unexpected losses in this market have led some insurance companies to go out of business, and others to leave the markets voluntarily.
An optimistic view of this year’s price increases is that they represent a one-time market correction, as insurers adjust to the real costs of caring for these customers and to the changes in federal policy. The more pessimistic view is that declining competition and enrollment could lead to rising premiums in future years, too.
Cynthia Cox, an associate director at the Kaiser Family Foundation, which has analyzed similar rate filings for big cities, said that on the whole “the factors that are driving premiums to increase in 2017 are one-time factors.” Price trends for future years, she said, will depend on how many people sign up.
No comments:
Post a Comment