Axios Vitals

A briefcase with a red cross on the front.
July 02, 2019

Fun fact: Step and calorie counters don't actually help you lose weight, according to NYT. I'm feeling validated in my decision to do neither.

Today's word count is 792 words, ~3 minutes.

1 big thing: Some seniors pay more for generic drugs than brands

Seniors who use generic specialty drugs may end up spending more out-of-pocket than those who use the brand version because of how Medicare's prescription drug benefit is structured, according to a new study in Health Affairs.

The bottom line: "If you need a lot of drugs or some very expensive drugs you would save more money out-of-pocket by using brands instead of generics," tweeted one of the study's authors, Stacie Dusetzina.

Details: The problem is most acute for specialty drugs, which tend to be the most expensive on the market.

  • Branded drug companies pay discounts in Medicare's "donut hole," which count toward that senior's overall out-of-pocket spending. Generics don't, so it takes longer for seniors using those drugs to spend enough for the government to start picking up more of their costs.
  • While Congress fixed the problem for biosimilars (akin to the generic version of biologics) last year, it left traditional small-molecule drugs unaddressed.

By the numbers: Even where competition among drugs is robust, patients whose prescriptions cost between $22,000 and $80,000 per year would save money if they used brand-name drugs instead of generics, the study found.

  • Part D plans may cover either the brand or the generic version of a drug, meaning patients can't switch between them even if they could get a better deal.

What they're saying: "We need to redesign [Part D] to work for people needing high-priced drugs. All of them. And we need to make generics CONSISTENTLY less expensive for patients than brands," Dusetzina tweeted.

2. Generics prices aren't falling like they used to

More bad news, from my colleague Bob Herman:

  • Generic drugs exist to bring down how much we spend on prescriptions, but annual generic price deflation is at its lowest level in at least the past 2 years, according to data crunched by drug pricing firm 46brooklyn.

Several issues could be driving this, said Eric Pachman, one of the founders of 46brooklyn. 

  • Fewer multi-source generics may be hitting the market. Some drugs that were too cheap are correcting themselves, or manufacturers with few generic competitors are raising prices because they can.

Why it matters: "The generic marketplace is underperforming (relative to prior time periods) in its role to drive costs down," according to 46brooklyn.

Go deeper: The Connecticut attorney general has unsealed the entire complaint in the price-fixing lawsuit against generic drugmakers. 

Bonus: 20 drug companies are raising the list prices of more than 40 drugs, including some used by hospitals that are in short supply, WSJ reports.

3. Air ambulances' astronomical charges

Air ambulances charge higher rates relative to Medicare than most other services, and these rates have increased over time, according to another new study in Health Affairs.

Why it matters: Insurers often don't contract with air ambulances, meaning patients may be charged exorbitant sums for emergency transportation whether they're insured or not.

By the numbers: Air ambulances charged between 4.1 and 9.5 times more than Medicare paid for these services in 2016, depending on the type of ambulance and type of charge.

  • The median charge per air ambulance trip increased from about $24,000 in 2012 to about $39,000 in 2016.
  • The median ground ambulance charge was 2.8 times what Medicare paid.

What we're watching: Air ambulances are very unhappy with provisions of a Senate health care bill that would force them to separate out transportation and medical charges, prohibit them from balance billing patients, and establish a payment benchmark for out-of-network care.

  • But, as the authors of the study write, "without congressional or regulatory effort to address air ambulance billing practices, patients — who in emergencies have few options and little bargaining power — are at risk of exposure to excessive charges."

4. Sanders winning on health care — for now

Sen. Bernie Sanders
Photo: Sean Rayford/Getty Images

Democrats and Democratic-leaning independents want the government to the provide a national health program without completely replacing private insurance, but they also say that Sen. Bernie Sanders is the candidate that can best handle health care, a new CNN poll found.

  • 26% of these respondents said they trusted Sanders the most, 18% chose former Vice President Joe Biden, 16% chose Sen. Elizabeth Warren and 10% chose Sen. Kamala Harris.
  • Sanders' supporters include 27% of those who favor a national plan but still want some private insurance, and 36% of those who want to completely gut private insurance.
  • Only 3 in 10 Democrat or Democratic-leaning voters want to repeal private insurance.

Yes, but: If this wasn't contradictory enough, three-quarters of Americans said that they feel like they understand what candidates mean when they say "Medicare for All," including 80% of Democrats.

5. California pushes ahead on immigrant care

Speaking of 2020, California Gov. Gavin Newsom said yesterday that his state will continue expanding government health benefits to adults who are living in the U.S. illegally, AP reports.

  • The announcement follows all 10 Democratic candidates in last week's second debate saying that they support providing health care to undocumented immigrants.

Why it matters: Immigrant health care is likely to become a huge topic on the campaign trail, especially since President Trump has already begun to weigh in against the proposals.