Feb 28, 2019

Axios Vitals

Good morning ...

Situational awareness: Wellington Management, the largest shareholder in Bristol-Myers Squibb, told the company's board yesterday that it doesn't support plans to buy rival drugmaker Celgene.

1 big thing: What people really spend on health care
Illustration: Rebecca Zisser/Axios

It's a lot more than just the visible stuff, the Kaiser Family Foundation's Drew Altman writes in today's column. And people will have to understand that before they can understand how Medicare for All, or any other sweeping reforms, would affect them.

Between the lines: Few people think about the other health costs they pay: their taxes to support health care, or what their employers are paying toward premiums (which is depressing their wages).

  • For a family of 4 earning $50,000 a year, with standard employer coverage, total health care spending could add up to as much as $23,050, between their own costs and what their employer spends on their behalf.

Why it matters: This could be particularly important when analyzing Medicare for All proposals, since they would so significantly alter the financing of health care by shifting it from premiums and out-of-pocket costs to taxes.

Read the column.

2. By the numbers: AbbVie's rebates

AbbVie paid out $16.4 billion in rebates and other discounts to pharmacy benefit managers and wholesalers in 2018, the pharmaceutical company disclosed late Wednesday in its annual regulatory filing.

  • AbbVie, which makes Humira, had almost $32.8 billion in net revenue last year, Axios' Bob Herman notes. That means rebates represented 33% of AbbVie's gross revenue.

Between the lines: AbbVie hasn’t changed its rebating that much. Rebates were 31% and 30% of AbbVie's gross revenue in 2017 and 2016, respectively.

  • Rebates are the topic de jour, as policymakers wrestle with the controversy over drug prices. But it’s worth remembering that drug companies don't offer discounts on all drugs — like single-source brands, some rare-disease drugs and most oncology medications.
3. Georgia's answer to surprise billing

Georgia legislators are advancing a bill that aims to prevent patients from getting surprise medical bills. But that proposal could drive up costs across the board, my colleague Bob reports.

Details: The most recent version of the bill says that if patients unexpectedly receive "unanticipated ... out-of-network services," health insurers must pay doctors their full pre-insurance charges, or a metric that averages the highest percentiles of local charges — whichever is less.

  • Insurers would also have to pay out-of-network providers their full charges for ER patients, if the patient isn't quickly transferred to an in-network facility.

The catch: These rates would be very high. If doctors know they will get paid their full charges, or something very close to them, why would they accept lower rates by agreeing to be part of insurers' networks?

BTW: The state senator who is sponsoring the bill, Republican Chuck Hufstetler, is an anesthetist. Hufstetler and his office did not respond to questions.

Go deeper: Why ending surprise medical bills is harder than it looks

4. Childbirth is more deadly for black mothers

Racial disparities in health are getting better, but there's still a deep and persistent inequity between the health of white and black mothers.

"Put simply, for black women far more than for white women, giving birth can amount to a death sentence," Harvard's public-health school notes in its magazine.

By the numbers: Maternal mortality is on the rise overall in the U.S., according to Harvard. On average, the mother dies in 18 out of every 100,000 births.

  • For white women, it's about 12 deaths per 100,000 births. But for black women, the mortality rate is over 3 times higher — 40 deaths per 100,000 births.

Researchers have consistently tied those disparities to social factors, like poverty and racial discrimination. If your body experiences enough severe stress and fight-or-flight situations over a long enough time period, your health suffers.

  • "It's like facing tigers coming from several directions every day," University of Michigan professor Arline Geronimus told the Harvard magazine.
5. Activists remind GOP: Pharma's a friend

The conservative American Action Network is spending almost $3 million to try to keep Republican lawmakers aligned with Medicare's privately run drug benefit, pushing back on mounting pressure to support more direct government intervention.

By the numbers: The advocacy group's campaign will include $2.8 million worth of print and digital ads targeting 46 GOP House members and 11 Republican senators.

Between the lines: Medicare's drug benefit is administered by private insurers and relies on private pharmacy benefit managers to negotiate prices with private drug companies.

  • The political uproar over drug prices, though, has sparked plenty of criticism of the private health care sector, revitalizing Democrats' push for the federal government to negotiate Medicare's drug prices directly.
  • Republicans have started to make some other anti-pharma noises, but haven't yet endorsed direct government price negotiations. And AAN is hoping to keep it that way even as congressional Republicans look ahead to their 2020 races.