Feb 24, 2020

Axios Vitals

By Caitlin Owens
Caitlin Owens

Good morning.

Situational awareness: It's my sister's birthday! Happy birthday, Carlye!

  • Also, the Trump administration's public charge rule goes into effect today. My colleague Stef Kight has a great rundown of what that means.

📺 Mark your calendars — Season 3 of "Axios on HBO" kicks off 6pm ET/PT Sunday, March 1!

Today's word count is 892, a 3-minute read.

1 big thing: Coronavirus stress tests our dependence on China

A Hong Kong commuter wears a face mask. Photo: Miguel Candela/SOPA Images/LightRocket via Getty Images

It's unclear whether the rapid spread of the coronavirus will actually result in prescription drug shortages, but it has undoubtedly highlighted the potential vulnerabilities of having the supply chain for American drugs so dependent on China.

Driving the news: I reported yesterday that about 150 prescription drugs — including antibiotics, generics and some branded drugs without alternatives — are at risk of shortage if the novel coronavirus outbreak in China worsens, per two sources familiar with a list of at-risk drugs compiled by the Food and Drug Administration.

  • China is a huge supplier of the ingredients used to make drugs that are sold in the U.S.
  • The FDA declined to comment on the list, but said in a statement that it's "keenly aware that the outbreak could impact the medical product supply chain" and has devoted additional resources toward identifying vulnerabilities to U.S. medical products.

What they're saying: In response to Axios' reporting, Sen. Josh Hawley will today send a letter to the FDA calling the degree of U.S. reliance on China for drugs "inexcusable."

  • "It is becoming clear to me that both oversight hearings and additional legislation are necessary to determine the extent of our reliance on Chinese production and protect our medical product supply chain," Hawley writes.

Flashback: Lawmakers have voiced concern before. Reps. Anna Eshoo and Adam Schiff — who chair the Energy and Commerce health subcommittee and the Intelligence Committee, respectively — wrote an op-ed in the Washington Post last year.

  • "Depending on any single supplier for such lifesaving goods would be troubling, but when that supplier is China at a time of rising tensions and conflict, it's a national security issue that demands the attention of the administration and Congress," they wrote.
2. Republican voters have moved on from ACA
Expand chart
Data: Kaiser Family Foundation; Chart: Axios Visuals

Republican voters have moved on from the Affordable Care Act, shifting their focus and opposition instead toward Medicare for All, the Kaiser Family Foundation's Drew Altman writes in today's column.

By the numbers: In the latest KFF tracking poll, 19% of registered Republicans said opposition to Medicare for All is their top health care issue, compared to just 3% who said the same for opposition to the ACA.

Republicans' top issue overall is the same as the overall public's: Reducing health care costs.

  • Repealing the ACA was Republicans' top health care priority as recently as 2016.

Yes, but: This does not mean attempts to repeal the ACA are over.

  • President Trump and many Republican leaders still support it, and the idea remains popular with Republican voters even as it has become a lower priority for them.

Between the lines: The ACA's popularity is at a high point — 55% support and 37% oppose it — and many of its provisions are popular across partisan lines.

  • Republicans and President Trump now see a bigger payoff with their base from branding Democratic ideas as socialism and and attacking Medicare for All.

What's next: If Sen. Bernie Sanders is the Democratic nominee, the focus on Medicare for All and the ensuing partisan warfare on health will intensify.

  • If Trump wins reelection, the current conflagration over Medicare for All will likely give way to a renewed debate about his plans for the ACA and Medicaid.
3. Insurer behemoths competing in new markets

Insurer-owned clinics are increasingly competing with hospitals and physicians for patients, the Wall Street Journal reports.

The big picture: Doctor groups and hospitals have invested heavily in purchasing physician practices, and are worried about insurers steering patients toward their own clinics.

For example: UnitedHealth Group's Optum arm has amassed doctor practices, surgery centers and urgent-care clinics. Aetna — which was acquired by CVS — has MinuteClinics. And Blue Cross & Blue Shield of Texas has recently opened clinics with a partner company.

  • Some plans favor care received by their own providers, although how many doctors a plan owns in any given market varies greatly.
  • "It's very worrisome for hospitals," Chas Roades, a health-care consultant, told WSJ. "Suddenly, the plan you're relying on for payment is also competing with you at the front end of the delivery system."

The big picture: Plans built around their own clinics generally have more limited doctor and hospital options, but that can lower premiums.

  • It can also benefit insurers by keeping revenue all under the same umbrella.
4. Blood test startup raises $165 million

Karius, a startup that tests for and identifies infectious diseases, has raised $165 million in a new funding round led by SoftBank's Vision Fund 2, Axios' Bob Herman reports.

The big picture: Diagnosing infections is difficult and time-consuming, but Karius says its sequencing test makes the process easier and quicker because everything can be done from standard blood draws.

How it works: Hospitals pay $2,000 for every Karius test, which involves getting a patient's blood and shipping the samples to Karius' lab in California, said Karius CEO and co-founder Mickey Kertesz.

  • The test, which has some company-funded research, extracts a certain kind of DNA from the blood and tests it for 1,400 microbes. That differs from other companies that also test for pathogens from blood.
  • Karius then reports what the specific infection is within 24 hours, instead of spending days or weeks on multiple tests, and that informs doctors of what treatment to use.

Between the lines: Theranos has created a wave of skepticism with blood testing. But 100 hospitals already use the Karius test, and the company has been "very open about what we do" with hospitals and investors, Kertesz said.

5. While you were weekending...
  • Six in 10 Nevada caucus-goers supported replacing private insurance with a single government plan for everyone, and of those voters, 48% went for Sen. Bernie Sanders, WashPost reports.
  • In a rural Tennessee county, children are being taught how to administer the overdose reversal drug Narcan, NYT reports.
  • The White House is planning to ask Congress for emergency funding to combat the coronavirus outbreak, but the amount may be much lower than what some public health officials say is necessary, per Politico.
Caitlin Owens