Nov 14, 2019

Axios Vitals

By Caitlin Owens
Caitlin Owens

Good morning. Thanks to everyone who came to yesterday's event — it's always fun to meet Vitals readers in person!

  • Relatedly, it's been a while since I've reminded you that you can just reply to this email with any tips, thoughts or feedback.

Today's word count is 890, or ~3 minutes.

1 big thing: A political race to the bottom on drug prices

Illustration: Sarah Grillo/Axios

President Trump wants the U.S. to pay less than other countries for some prescription drugs covered by Medicare — a benchmark even lower than what congressional Democrats want.

Between the lines: The administration has moved the goalposts on its one major drug pricing policy left on the table, which could take a hatchet to the U.S. pharmaceutical system's business — if it's ever implemented.

Driving the news: Health and Human Services Secretary Alex Azar said at an Axios event yesterday morning that Trump now wants a "most favored nation status" policy.

  • The administration had previously pitched the idea of tying what Medicare pays for some Part B drugs to the average of what some other countries pay. The target price would have been 126% of that average price.
  • But Azar said that wasn't good enough for Trump. "[Trump's] view ... is that America ought to be getting the best deal among developed countries," Azar said.

The irony: Just last week, the White House publicly rejected House Speaker Nancy Pelosi's drug pricing bill, with head of the Domestic Policy Council Joe Grogan calling it "unworkable."

  • The Pelosi bill would allow Medicare to negotiate the price of some drugs, but the ceiling for those prices would be 120% of what other countries pay.

What they're saying: The administration's latest idea "could blow the Pelosi number out of the water for these part B" drugs, said the American Enterprise Institute's Ben Ippolito, who has warned about the implications of the Pelosi bill on the drug market.

  • "No matter how they are structured, international reference pricing schemes are the wrong approach for America," said Holly Campbell, a spokeswoman for PhRMA.

The bottom line: "The lower target price is obviously a change for the worse from industry’s perspective," Cowen Washington Research Group wrote in a policy note.

Go deeper.

2. Another reality check on hospital beds

Hospital beds are not filling up like they used to, but that doesn't mean hospitals want their beds to be empty, Axios' Bob Herman reports.

What they're saying: Even though more patients are being treated in outpatient clinics rather than hospitals, "we'll still be able to keep our beds pretty full," Don Scanlon, chief financial officer at Mount Sinai Health System, said this week at an investor lunch held at Goldman Sachs headquarters in New York City.

Details: Mount Sinai, a not-for-profit hospital system based in Manhattan with $5 billion in annual revenue, is preparing to sell $475 million in bonds, and was making its pitch to bondholders about why buying that debt would be a good deal.

Between the lines: Mount Sinai's discharges have trended down, but the hospital doesn't want to lose the bigger dollars tied to inpatient stays. And the system wants to reassure municipal investors they will see returns.

  • As a result, Mount Sinai has invested more money in outpatient centers in other parts of New York that serve as "feeders" for its main city hospitals, Scanlon said.

The bottom line: Mount Sinai, Trinity Health, Banner Health and a host of other hospital systems have openly touted plans to boost or retain admissions even though they say they want to keep people out of the hospital. This is a fundamental disconnect between "value-based care" and the system's financial incentives.

Go deeper: How banks and law firms make millions from hospital debt

3. Corporate America tackling mental health stigma

Illustration: Aïda Amer/Axios

Corporate America is attempting to abolish the "don't ask, don't tell" attitude on mental health between employers and their staff, Bloomberg Businessweek reports.

Why it matters: 63% of employees diagnosed with a mental illness say they have not disclosed it to their employer, according to a Harris Poll partnership with the American Heart Association CEO Roundtable.

The big picture: Depression is costing the U.S. economy about $210 billion a year, according to the Center for Workplace Mental Health. Employers take on about half that cost, due to employees' missed work and lost productivity, Axios' Marisa Fernandez writes.

The impact: Cisco Systems, Lyft, Microsoft and the NBA are either providing more access to health care professionals, free counseling or unspecified "emergency" days off, per Bloomberg.

  • Aaron Harvey, co-founder of ad company Ready Set Rocket, kickstarted a #DearManager social media campaign to give employees a prompt to open up.

The bottom line: Disparities in mental health coverage for ordinary workers will persist unless business leaders step up to improve insurance coverage.

Go deeper:

4. Bad news on superbug deaths
Expand chart
Data: CDC Antibiotic Resistance Threats in the United States 2019; Images: CDC; Table: Andrew Witherspoon/Axios

Antibiotic-resistant bacteria and fungi cause more than 2.8 million infections and 35,000 deaths annually in the U.S., according to new estimates posted by the Centers for Disease Control and Prevention in a long-awaited report.

Yes, but: While the overall numbers are "higher than previously estimated," the number of people dying from AR infections appears to be dropping, Axios' Eileen Drage O'Reilly reports.

5. Climate change threatens children's health

Climate change is creating a warmer world, and a new international report says children growing up in it will face more health problems than their parents did, per AP.

The big picture: Climate change is already impacting people's health — through problems like increasing diarrhea and mosquito-borne diseases — but that'll get worse if greenhouse gas emissions aren't curbed, per the report, which was published in the medical journal The Lancet.

  • "Children are the most vulnerable. They will bear the vast majority of the burden of climate change," Nick Watts, an Australian emergency room physician and the lead author of the report, told AP.

Go deeper: Climate change could be big business for pharma

Caitlin Owens