Feb 11, 2020

Axios Vitals

Good morning. Today is the New Hampshire primary, and we should all cross our fingers and hope it goes much more smoothly than Iowa did.

Today's word count is 818, or a 3-minute read.

1 big thing: Hospitals, Medicaid enrollees lose under Trump's budget

Illustration: Aïda Amer/Axios

President Trump's 2021 budget proposes massive reductions in Medicare and Medicaid spending, which would be felt most acutely by hospitals and Medicaid beneficiaries.

Why it matters: Budget proposals are more about messaging than policies that have any chance of becoming law, but it's still a good indication of the direction the administration would like to head in if Trump wins re-election.

  • Yes, but: The budget isn't entirely theoretical; the administration is moving full steam ahead on some of its Medicaid proposals — like work requirements and block grants — and is still hoping to notch a victory on prescription drug prices before the election.

Details: The budget would reduce Medicare and Medicaid spending by hundreds of billions of dollars each over the next decade.

  • The budget doesn't include new policy ideas to replace the Affordable Care Act or protect pre-existing conditions, but does include $844 billion in spending reductions from the "President's Health Reform Vision," which accounts for a large portion of its Medicaid savings.

Between the lines: These huge Medicare savings come at the expense of hospitals, including through site-neutral payment policies and reduced uncompensated care payments.

  • Although the Medicaid reforms are largely unspecified, if the Trump administration's past actions indicate future behavior, they'd likely include cuts to the ACA's expansion population and capping federal payments to states.
  • "The level of spending reductions called for would inevitably mean fewer people covered and more uninsured," the Kaiser Family Foundation's Larry Levitt said.

My thought bubble: It's extremely hard to see Congress legislating these kind of cuts to hospitals, no matter who's in charge. But if Republicans are in control after the election, it's pretty easy to see them at least trying to pass these large-scale Medicaid reforms again.

2. Reading the tea leaves on drug policy

Trump's budget calls for "comprehensive drug pricing reform" but doesn't mention the biggest drug pricing policy left on the administration's table.

What they're saying: When I asked HHS why the administration's international pricing index (IPI) wasn't included in the budget, a spokesperson said that "we have taken a sweeping series of administrative actions towards [our drug pricing] goals, and we are supportive of bipartisan, bicameral legislative efforts that will further these goals and lower drug prices for American patients."

Flashback: Trump didn't mention the international pricing index — which would tie what Medicare pays for some drugs to what other countries pay — during the State of the Union last week, either, instead calling out a bipartisan drug pricing bill sponsored by Sens. Chuck Grassley and Ron Wyden.

Between the lines: The Grassley-Wyden bill is by no means a pharma giveaway, but it's much more palatable to the industry than the huge cuts that would come under IPI.

3. Another Alzheimer's setback

Illustration: Sarah Grillo/Axios

A new study found that experimental drugs made by Eli Lilly and Roche didn't help people with a rare, inherited form of Alzheimer's, the Wall Street Journal reports.

Why it matters: Alzheimer's is a devastating disease, and drug after drug keeps failing to do more than temporarily alleviate its symptoms.

Yes, but: The prevalence of the disease, combined with how it has become somewhat of a holy grail for drugmakers, means that the industry has far from given up on it.

  • Last year, 405 drugs were being studied for the disease, and increase from 381 in 2018.

Go deeper: The outlook for Alzheimer's research keeps getting bleaker

4. The FDA defends its approval process

Many experts have questioned the FDA's drug approval standards over the past few years, as several controversial drugs have gotten the green light despite less rigorous testing, Axios' Bob Herman writes.

What they're saying: Peter Stein, the head of the FDA's office that analyzes new drugs, sat down with Zachary Brennan of Regulatory Affairs Professionals Society and said the only thing that's changed with the FDA's approval process is a shift in the types of drugs the agency is reviewing.

  • "If you look in the last couple years, we still see some drugs for chronic diseases, but even there, it tends to be subgroups and populations that were undertreated with drugs previously available, and what we're seeing is a dramatic increase in drugs for rare diseases," he said.

The bottom line: There's no doubt biotech startups and drug companies have invested more time and money in treatments that go after cancers or conditions that treat a very small subset of people. Those kinds of medicines usually command the highest prices.

  • And the FDA is saying those types of drugs have more leeway in the approval process, even if they only have one trial or don’t have randomized test groups, because "patients and physicians are willing to accept a bit more uncertainty." 
5. Kidneys on flights are getting delayed

Transporting kidneys on commercial flights for transportation can put the organs in jeopardy, thanks to delays and logistical problems, Kaiser Health News and Reveal report.

Why it matters: Organs can only be outside of the body for a certain number of hours before doctors will refuse to put them inside patients, Axios' Marisa Fernandez writes.

By the numbers: More than 8,800 organ and tissue shipments were collected voluntarily between 2014 and 2019 from the United Network for Organ Sharing.

  • Nearly 170 organs could not be transplanted and almost 370 endured what the system calls "near misses," with delays of two hours or more.
  • 22 additional organs were transportation "failures" and were able to be transplanted elsewhere.

The bottom line: Organ distribution lacks a centralized system, relying on multiple partners like non-profits, doctors, career services and several domestic airlines to transport a kidney. It can lead to confusion and logistics problems where in the end, the patient suffers.

Editor's note: The first item in yesterday's Vitals has been corrected to say that the House Energy and Commerce Committee's surprise billing legislation would use a blend of benchmark rates and arbitration to resolve surprise billing disputes (not decide payment rates based on a benchmark).