Sep 24, 2019

Axios Vitals

By Caitlin Owens
Caitlin Owens

Good morning. Here is your quote of the day, from the NYT's deep dive into the rise of the anti-vaccine movement:

  • "Science has become just another voice in the room," Paul Offit, an infectious disease expert at Children's Hospital of Philadelphia, told the Times. "It has lost its platform. Now, you simply declare your own truth."

Today's word count is 784 words, or ~3 minutes.

1 big thing: America is pharma's piggybank
Expand chart
Reproduced from the Ways and Means Committee; Table: Axios Visuals

Americans would save a boatload if we paid the same prices as other wealthy countries pay for prescription drugs, a new analysis from the House Ways and Means Committee confirms.

Why it matters: This is why the industry is so staunchly opposed to both President Trump's and House Speaker Nancy Pelosi's plans to piggyback off of other countries' lower prices.

Where it stands: Most countries included in the analysis have average drug prices that are between 24% and 30% of U.S. prices. Government regulations keep drug prices lower in these countries.

  • Those U.S. prices don't take into account rebates and discounts, which bring down the price most insured patients actually pay.
  • The average rebate in Medicare Part D is about 22%, according to a 2015 estimate from the Congressional Budget Office. Those rebates would have to be significantly bigger to match other countries' prices.

The other side: "International comparisons link list prices in the United States — that almost nobody pays — to these artificially low prices set by governments in other countries," PhRMA spokesperson Holly Campbell said.

  • "In every country where the government sets medicine prices, patients face significant restrictions in accessing new medicines and long treatment delays," she added.

Yes, but: Many patients with high deductibles or no insurance at all pay the list price for their prescriptions, leading to unfilled prescriptions and other medication adherence issues.

2. The Blue Cross Blue Shield tax break rolls on

Health Care Service Corp., the parent of Blue Cross Blue Shield plans in 5 states, did not pay any federal income taxes in the first half of 2019, Axios' Bob Herman reports.

  • Instead, it got a $454 million tax refund, according to company financial documents.

The big picture: HCSC received a $1.7 billion federal tax refund in 2018, and Blue Cross Blue Shield insurers continue to be some of the biggest beneficiaries of the 2017 Republican tax overhaul.

By the numbers: HCSC's net profit in the first half of 2019, including the $454 million refund, topped $2.3 billion. These figures do not reflect the corporation's self-insured business with employers.

  • HCSC was sitting on a $19.1 billion cash reserve as of June 30, several billion dollars more than competing insurers, including its publicly traded Blues brethren Anthem.

What we're watching: HCSC has $323 million of unpaid rebates that need to go out to consumers who were overcharged for insurance.

Between the lines: HCSC and other state Blue Cross Blue Shield plans heavily lobbied Congress and the White House to enact changes to the tax code starting in 2018. This was why.

3. Generics are sometimes inaccessible to seniors

Plans providing Medicare's prescription drug benefit are often slow to cover the first generic competition to a branded medication, according to a new white paper by the Association for Accessible Medicines, which represents generics.

Why it matters: Generics are our system's way of keeping drug prices in check. But this doesn't happen unless patients have access to them.

"First generics" are included on the formularies of Medicare Part D plans only 10–25% of the time in the first year after they launch, according to the paper.

  • This increases to 25–35% of the time in the second year after launch, and 55–65% of the time in the third.
  • Even when they are covered, first generics are frequently placed on the same or similar "tier" as the brand drug they're competing with — meaning that patients have no financial incentive to choose the generic.

My thought bubble: Statistics like these only feed the school of thought that says competition isn't doing enough to drive down drugs prices, and so the government should take a heavier hand.

4. How to make methadone more available

As the opioid epidemic rages on, methadone — one of three approved medications to treat opioid use disorder — can be hard to come by, according to a new article in Health Affairs.

  • Although it's effective, it's heavily regulated, and can only be obtained at opioid treatment programs. These are subject to strict federal, state and even local rules.
  • But many communities don't have enough treatment programs to meet the demand for them.

What they're saying: Methadone could be made more available in primary care settings, which would increase treatment capacity, the paper argues.

  • The Drug Enforcement Administration could also regulate mobile methadone vans, which have been used in several states to reach patients who can't travel to a treatment program.
  • States could encourage the use of "medication units," which are associated with a treatment program but provide off-site medication at places more convenient for patients.
  • States could also loosen restrictions on the number of treatment programs or the services they offer.
5. Juul's latest problem

Illustration: Sarah Grillo/Axios

Federal prosecutors in California have opened a criminal probe into Juul, the Wall Street Journal reports.

Yes, but: WSJ was unable to confirm what the focus of the probe is.

Why it matters: Juul's already under fire from all directions, but a federal criminal investigation escalates things.

Caitlin Owens