Good morning ... Sometimes you read a headline and all you can do is hope you never have to find out for yourself whether it's true. Case in point: "No One Is Prepared for Hagfish Slime."
Pharmaceutical companies defend their high prices largely by arguing that they need to recoup the costs of researching and developing new drugs — including the failures. But the World Health Organization says that math doesn't add up, my colleagues Caitlin Owens and Bob Herman report this morning.
The big picture: A new WHO report says new cancer drugs have translated into better survival rates, but that high prices are the main factor limiting access to those life-saving drugs. And it says R&D costs don't justify those prices.
By the numbers: Even after accounting for failed clinical trials and other opportunity costs, drug companies saw a median return of $14.50 for every $1 they spent on research and development, the paper says, citing earlier research published in the Journal of the American Medical Association.
The other side: “The report is wrong on the facts and deeply flawed,” a spokeswoman for the Pharmaceutical Research and Manufacturers of America said. “The report’s narrow scope fails to properly account for the value that cancer medicines provide to patients, health care systems and societies.”
A new round of price increases for brand-name prescription drugs was just enacted, Bob reports.
Details: Pharma giants Pfizer and Novartis have officially raised prices on dozens of drugs, according to data from 46brooklyn Research and Elsevier's Gold Standard Drug Database.
Some important context: These are list prices. Insurance plans will end up actually paying lower, negotiated rates.
Yes, but: List prices still matter for patients with high deductibles, including Medicare coverage.
Non-profit hospitals are conducting "wealth checks" to identify wealthy patients, then hitting up them for donations. And though hospitals say wealthier patients don’t get better care, they do get more personal touches.
Hospitals search public data like property records and political contributions to identify wealthy patients.
By the numbers: Charitable donations to hospitals topped $10 billion in 2017, per KHN.
Why it matters: “I feel like the risk is we are setting up a two-tiered health care system — one for wealthy patients and one for everyone else,"3e Johns Hopkins internist Rosalyn Stewart told KHN.
Pharmacy benefit managers' role in the drug supply chain is incredibly opaque. But Bloomberg helps pull back the curtain a little bit more.
How it works: PBMs' profit from the "spread" between the prices they charge their clients (insurance companies and employers) and what they actually pay pharmacies for drugs. But it's usually impossible to know exactly what that spread is.
The latest details come from New York's Medicaid program. A new analysis commissioned by independent pharmacists in the state, and shared with Bloomberg, found that PBMs' markups doubled from 2016 to 2017.
The other side: PBMs say New York overpays its pharmacies. A spokesman for PBMs' trade organization in Washington told Bloomberg that "New York’s special interest drugstore lobby wants to rearrange deck chairs on the Titanic without offering ways to keep Medicaid afloat.”
The non-profit drug supplier Civica RX has upped its expectations and now says it will be able to provide about 20 drugs this year, Reuters reports.
Civica RX is consortium of hospitals and non-profits, led by Intermountain Healthcare, that aims to jump-start the supplies of older drugs that hospitals rely on, but which have become inaccessible due to shortages and price hikes.
Go deeper: Axios' Felix Salmon has a good Civica RX explainer.
A school superintendent in Indiana was charged with insurance fraud after she used her son's insurance to get medicine for a sick student.
Details, via the Indianapolis Star:
My thought bubble: I suppose this is probably insurance fraud, but man, this must be one of the most pure-of-heart crimes ever committed. And I don't think this is necessarily a scathing indictment of the health care system; it's just ... really an all-around bummer, to be honest.
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