Jul 15, 2019

Axios Vitals

Good morning ... I'll be filling in as your Vitals host for the next 2 weeks, while Caitlin Owens take a well-deserved vacation. And hey, good for her. I'm not jealous. Not at all. Who wants to go to Europe in the summer, anyway?

Today's Vitals is 892 words. You should be able to read it in less time than it'll take Caitlin to finish off her morning espresso. Did I mention that I'm not jealous?

1 big thing: Here's Joe Biden's health care plan

Photo: Scott Olson/Getty Images

Joe Biden is rolling out a health care plan today whose policies and political priorities are both rooted firmly in the Affordable Care Act.

Details: The cornerstone of Biden's proposal is a new public insurance option, which would compete alongside private insurance.

  • The public plan would be available to everyone, even people who get their coverage from an employer. That's an important difference from the one that was debated in 2010.
  • Biden also would make the ACA's premium subsides more generous and more widely available.

On cost control, the plan would give Medicare the power to directly negotiate drug prices and establish a new board to determine a fair price for new, first-in-class drugs.

  • Drugmakers would also have to pay a tax if they raise their prices above inflation.
  • There's a proposal to end surprise hospital billing, but otherwise not a lot in there on hospital costs.

One potential controversy: Biden's new public option would automatically take the place of the Medicaid expansion in states that haven't expanded.

  • States that have expanded would have to keep paying their share of the bill for the expansion.
  • In other words, non-expansion states would seem to get a better deal than those that participated in the expansion — arguably, rewarding their resistance to the ACA.

The bottom line: Health care may be the most defining substantive policy disagreement among the 2020 field.

  • Biden's proposal is more ambitious than anything that was seriously on the table during the ACA debate, but looks decidedly moderate compared to Bernie Sanders' plan — which is significantly more ambitious than almost any other health care system in the world.
2. Generics gaming in Medicare

Many generic drugs are "wildly overpriced" in Medicare, according to a new analysis of federal data from research firm 46brooklyn Research. Axios' Bob Herman has all the details.

Why it matters: Health insurers and pharmacy benefit managers manipulate generic drug prices in Medicaid, and it appears more generics gaming occurs in Medicare — all on the back of taxpayers and patients.

How it works: Medicare drug plans are buying many generics at prices that are significantly above their ingredient costs.

  • Because plans can't conduct "spread pricing" in Medicare, they claw back money from pharmacies, based on those inflated prices, through different means.
  • Example: A common dose of antipsychotic drug aripiprazole costs $0.30 per pill, but the median Medicare drug plan priced it at $2.58 per pill in the first quarter of this year, according to 46brooklyn's analysis. A handful of companies priced it at more than $20 per pill.
  • 46brooklyn's data can't pinpoint where those margins are going. But pharmacies almost certainly aren't keeping big chunks, given how Medicare plans are increasingly clawing back money from them over the past few years.

Go deeper: Explore the data

3. The GOP isn't worried about its ACA lawsuit


Senate Republicans aren't sweating the prospect of the courts striking down the entire Affordable Care Act, insisting they'd be able to act quickly to repair the damage — despite their inability to coalesce around a replacement plan at any point over the past decade.

Driving the news: "Do I hope the lawsuit succeeds? I do," Sen. Kevin Cramer told Politico. "What I wish is we had some idea where we are going if it does succeed, as it looks more and more like it might."

My thought bubble: It wouldn't be easy even to restore the most politically popular parts of the law.

  • To match the ACA's level of protections for people with pre-existing conditions, a new plan would not only need to require insurers to cover those patients, but also would have to guarantee coverage for the services they'd need and prevent insurers from imposing benefit caps.
  • We have plenty of very recent evidence that Republicans themselves are divided over those issues, never mind the added complexities of negotiating with a Democratic-led House.

The other side: "I can't say that I hope it succeeds," Sen. Shelley Moore Capito told Politico, referring to the anti-ACA lawsuit.

4. Data breaches hit 3.5 million patients

Roughly 3.5 million people were affected by the latest round of health care data breaches, Modern Healthcare reports.

  • These breaches were all reported to the federal government last month, though they did not necessarily happen last month.

By the numbers: There were fewer individual breaches reported in June than in May, but those breaches exposed more patients' records.

  • Hacks and "IT incidents" accounted for about 45% of the total, per Modern Healthcare. The rest were largely from theft or accidental exposure.
  • Of the 3.5 million patients whose data was exposed, some 3 million came from a single hack that hit Dominion National, an insurer provider of vision and dental care.

Go deeper: What your hospital knows about you

5. While you were weekending ...
  • Gilead will pay more than $5 billion to take on a bigger stake in biotech company Galapagos, the Wall Street Journal reports.
  • The number of voters blaming Trump for the state of the health care system is rising, but it's still smaller than the number who blame Obama. Yahoo Finance has the details.
  • 2 Minute Medicine highlights a study that found patients who live in disadvantaged neighborhoods are more likely to be readmitted after a hospital stay.
  • The Ebola outbreak in Democratic Republic of Congo has reached the city of Goma, prompting fears of a much wider outbreak, the BBC reports.

Thanks for reading. Send your tips to baker@axios.com and your complaints to caitlin@axios.com.