Good morning. I hope you had a nice weekend and enjoyed the premiere of "Axios on HBO" Season 2.
Today's Vitals is 750 words, <3 minutes.
1 big thing: How a cheaper prescription drug is getting boxed out
There are only a handful of biosimilars available in the U.S. And one of the country's biggest insurers is about to start disadvantaging one of them, in favor of its more expensive competitor.
Why it matters: Deals like this are part of the reason biosimilars — envisioned, roughly, as generic versions of complex and pricy biologic drugs — aren't gaining a foothold. And that's keeping prices high throughout the system.
Details: Udenyca is a biosimilar version of the cancer drug Neulasta. Its list price is 33% lower than Neulasta's.
- UnitedHealthcare will soon be redesigning its drug coverage so that it will only cover Udenyca after patients try Neulasta, and only if it doesn't work for them.
How it works: United will give preferential treatment to Neulasta because Amgen, which makes Neulasta, offered a bigger rebate than Coherus, which makes Udenyca, a source familiar said.
- Pharmacy benefit managers negotiate discounts in the form of rebates — part of which they keep as profits.
- "The process highlights the cost savings that are being generated as prices decrease due to the increased competition created by biosimilar entry," Amgen said in a statement.
"Amgen will pursue any avenue they have to block out the competition and extend this monopoly," said Denny Lanfear, the chairman, president, and CEO of Coherus.
- United did not comment on the record.
Between the lines: United is able to pass savings from this discount on to the insurers and employers it works for — which is, essentially, the way the system is supposed to work.
- But patients' out-of-pocket costs are often based on drugs' list prices, so some will be paying more because of this arrangement.
The bottom line: Because biosimilars are a new class of drugs, these kinds of arrangements not only disadvantage one drug, but are keeping the whole category from catching on, critics argue.
2. The most common drugs are getting more expensive
The cost of all but one of the 49 top-selling brand-name drugs included in a new JAMA study increased between 2012 and 2017.
By the numbers: The median cost increase of the drugs over these 6 years was 76%, and most drugs saw cost increases once or twice a year.
- The results suggest that costs for popular branded drugs will double every 7 to 8 years.
Caveat: The study uses data from the Blue Cross Blue Shield Axis, which includes data from 35 million privately insured people. It did not account for rebates, which can't be linked to individual claims.
- But it did compare its results with third-party estimates of net price data for each drug, and found that there was high correlation between net prices and costs.
- "This association suggests that the offered supposition that higher list prices and greater reliance on rebates reduce costs may be untrue," the authors write.
Key quote: "Competition among brand-name competitors appeared to do little to stymie rising costs."
- "Instead, products that may be prescribed interchangeably ... were highly synchronized in relative cost changes while demonstrating some of the largest cost increases in the industry over the past 6 years."
3. Voters are tuning out the health care debates
Are you following all the latest twists and turns in the Medicare for All debate? Or the Trump administration’s efforts to revive Medicaid block grants? Then you are unusual.
- A series of focus groups by the Kaiser Family Foundation found that voters in swing states and districts were only dimly aware of candidates' and elected officials' health care proposals, Kaiser's Drew Altman writes in today’s column.
- Many had never heard the term "Medicare for all," and very few had heard about Medicare or Medicaid buy-in proposals, or Medicaid and Affordable Care Act state block grant plans like the one included in President Trump's proposed budget.
Between the lines: Most voters in these groups don't seem to see the current health reform proposals on either side of the aisle as solutions to their top problems: paying for care or navigating the health insurance system and red tape.
- That, combined with a general distrust of politicians, can make these voters wary of any plan that sounds just a little too good to be true to them.
4. New data on ACA and cancer
The Affordable Care Act decreased racial disparities in access to cancer and increased early detection of ovarian cancer, according to a new study reported on by the Washington Post.
- While black adults with advanced cancer were 4.8% less likely to receive timely treatment pre-ACA, in states that have expanded Medicaid, that gap between black and white patients has almost completely closed.
What they're saying: “We are moving from black-white disparities to Massachusetts versus Mississippi disparities,” Otis Brawley, a Johns Hopkins oncologist, told the Post.
5. While you were weekending
- CVS will be defending its acquisition of Aetna before both a court and shareholders this week, WSJ reports.
- "Pharma Bro" Martin Shkreli has sued 2 directors and an ex-general counsel of his former company from prison, CNBC reports.
- Johnson & Johnson was on Friday ordered to pay $300 million in damages to a woman who claimed that using the company's talc powder caused her to develop cancer, WSJ writes.
Have a great week!