Good morning. Here is a fun fact, per JAMA: "The United States alone accounts for 41.7% of global health spending, although it accounts for only 4.4% of the global population."
1 big thing: CAR-T payment challenges are only beginning
The Trump administration proposed bumping up hospital payments for CAR-T cancer therapy last week, but the question of how to pay for these procedures — which are individualized for each patient — is far from settled.
The big picture: Hospitals don't want to keep losing money over this treatment, and that could affect who gets it. More CAR-T therapies are in the development pipeline, but competition isn't a surefire solution, given its personalized nature.
Hospitals can lose upwards of $100,000 when they provide CAR-T therapy to a Medicare beneficiary on an inpatient basis.
- The administration's proposal would help, but it doesn't solve the problem long-term.
- If Medicare raises its reimbursement rate to make hospitals whole, that's expensive for taxpayers. But manufacturers aren't budging on their prices.
- And even though experts say some hospitals might stop providing CAR-T if they continue to lose money, they also say it won't be enough to prompt manufacturers to lower their prices as a way to restore those lost sales.
- "To the extent that [the manufacturers are] just saying that’s the price, take it or leave it ... hospitals may not have the opportunity to negotiate," said Vanderbilt's Stacie Dusetzina.
What they're saying: "Some hospitals just aren’t going to pay this ... and that's counter to the general objective, I think, of having new innovative treatments, which is that they get to patients," Memorial Sloan-Kettering Cancer Center's Peter Bach said.
What we're watching: There are more CAR-T therapies in the development pipeline. If they make it to market, they'll be available for more uses, but it's unclear what this will do to the price.
The bottom line: Unless and until competition drives down the cost of CAR-T, or either Medicare or manufacturers cave, the system is at a standoff — one that isn't sustainable in the long run.
2. Signs of higher drug spending (with a catch)
Gross prescription drug spending appears to be on the rise, Axios' Bob Herman reports.
- Preliminary data from the Bureau of Economic Analysis shows the amount spent on prescriptions in the first quarter of 2019 increased 7.1% year over year, the highest annualized growth rate since the fourth quarter of 2015.
Yes, but: The data points do not factor in the rebates and discounts that drug manufacturers pass along to industry middlemen. So that higher spending rate doesn't tell the full story, and real spending growth almost certainly is lower.
Details: The BEA will revise these numbers twice by June, but they still won't account for drug rebates.
- Data from the Centers for Medicare & Medicaid Services, which accounts for rebates but takes longer to come out, remains the gold standard for tracking prescription drug spending.
- CMS found spending growth for retail prescriptions was essentially flat in 2017 and estimates the final growth rate in 2018 will be 3.3%. CMS predicts net drug spending will rise by 4.6% in 2019.
The bottom line: "The rebate issue really makes a mess of these things," said Paul Hughes-Cromwick, a health economist at research firm Altarum. Until the federal government gets real-time rebate data from drugmakers or pharmacy benefit managers, he said, "we're all running around chasing our tails."
3. Trump's giving up on part of the ACA
The Trump administration is about to formally give up on a part of the Affordable Care Act that had largely died on its own, Axios' Sam Baker writes.
Driving the news: The Office of Personnel Management intends to stop administering the ACA's multi-state insurance plans. Axios reviewed a draft of the notification letter OPM is planning to send to congressional leaders.
How it works: The ACA initially envisioned creating 2 multi-state plans — private insurance policies that would be available through the ACA's insurance exchanges in every state. The goal was to provide guaranteed competition in states that lacked it.
- But the policy never got off the ground. By 2017, there was just 1 plan operating in just 1 state.
Between the lines: An administration official framed the death of the multi-state plans as a bad omen for "Medicare for All," arguing that it was "a pilot program for the public option, and it’s been a dismal failure with even the most liberal states balking on it."
- It's true that this policy was designed to do some of the same things a public option would have done, and that it failed.
- But it failed, in part, because its insurers never were very enthusiastic about setting up networks of doctors and hospitals across multiple states — which is also a bad omen for the conservative priority of selling insurance across state lines.
4. The promise and pitfalls of medical technology
Innovative medical technology is trying to solve the problem of getting people to take their medicine, but its cost and its unfamiliarity has blocked widespread use, the Washington Post reports.
- The first digital therapy to be approved by the Food and Drug Administration, Abilify MyCite, isn't on the market because of providers' and insurers' reservations about the product.
- Abilify is an old drug used to treat schizophrenia and other mental illnesses. The new product is the same pill but with an electronic tracking component added, which transmits a signal when it comes into contact with stomach acid.
- Eventually, doctors can view the data collected to monitor whether a patient is taking his or her medicine — serious information for schizophrenia patients.
- Abilify MyCite costs $1,650 a month.
The big picture: The collision of drugs and medical devices with Silicon Valley has resulted in apps to help treat numerous health care conditions, and there are studies underway for more digital pills to treat cancer and other diseases.
- But the cost-effectiveness of these new technologies hasn't yet been proven, and until if and when it is, that's a huge barrier to uptake.
- "I think that these technologies have a lot of potential benefits, but it's going to be a question of evidence — that they can demonstrate value to patients and payers," former FDA Commissioner Scott Gottlieb told the Post.
5. While you were weekending
- Black, Latino and low-income patients are much more likely to receive amputations related to their diabetes than white or higher-income patients, Kaiser Health News reports with CNN. That's despite the fact that we know how to manage diabetes, and amputations are easily preventable.
- Politico dives into how raising the smoking age to 21 could actually be a win for Big Tobacco.
- And the New York Times reports that Juul is lobbying against state legislation aimed at reducing youth vaping and tobacco use.
- Drugmaker Roche's lead in the development of oncology drugs is shrinking as other companies increase their focus on cancer, the Wall Street Journal reports.