March 28, 2023

Good morning, Vitals readers. Today's newsletter is 1,004 words or a 4-minute read.

🎺 Tune in tomorrow: Axios' second annual What's Next Summit is happening all day tomorrow, March 29, starting at 8:10am ET!

  • Check out our day-of agenda, including interviews with music producer Timbaland and Whole Foods Market CEO Jason Buechel. Register to livestream the event here.

1 big thing: The quiet privatization of government health insurance programs

Illustration: Natalie Peeples/Axios

The biggest public health insurance programs have become increasingly privatized over the last decade, even while politicians sparred over whether government-run health care should be expanded to cover more Americans, Axios' Caitlin Owens writes.

Why it matters: Although privately run Medicare and Medicaid plans are still highly regulated and funded by the government, the commercialization has complicated efforts to rein in medical spending and unleashed fierce partisan fights like the ongoing one over Medicare Advantage.

Driving the news: Insurers that administer Medicare benefits and their allies are running an enormous lobbying blitz against proposed regulations by the Biden administration that they say will cut their government funding and, in turn, harm enrollees.

  • Supporters of the cuts say the proposal corrects overpayment, which plans obtain by manipulating the billing system.
  • The potency of the lobbying is a sign of just how ingrained Medicare Advantage has become among seniors over the years β€” and how important it is to some insurers' business mix.

The big picture: Medicare for All rose to prominence during Democrats' 2016 presidential primary, championed by Sen. Bernie Sanders.

  • Four years later, it returned as a key litmus test for Democratic presidential hopefuls. More moderate candidates, including President Biden, instead embraced a public option, which would extend eligibility for government-run insurance to more Americans.
  • But as Democrats aired out whether or not to abolish private insurance, existing public programs became increasingly commercialized.
  • Meanwhile, attempts to expand Medicare eligibility or benefits as part of Democrats' domestic policy agenda during Biden's first two years in office fizzled largely over the cost.

What we're watching: Medicaid programs will soon begin cutting loose millions of people who are no longer eligible for the program post-pandemic or who get caught up in administrative errors. It's unclear what financial effect this shrinking of program rolls will have on insurers.

  • And the Biden administration will issue its final rule on Medicare Advantage rates next week, revealing the impact of plans' lobbying.

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2. FDA proposes overhaul of cancer drug fast-track

Illustration: Rebecca Zisser/Axios

The FDA is eyeing policy changes that could make drugmakers conduct more stringent trials to win fast-track approvals of cancer drugs, Axios' Adriel Bettelheim writes.

Why it matters: The agency's accelerated approval process has drawn fire for the way it allows manufacturers to launch products based on preliminary evidence and charge high prices before they complete trials.

  • Some products don't work out: Merck withdrew its blockbuster cancer therapy Keytruda for some uses after an FDA crackdown on drugs approved through the fast-track process without the required post-marketing data, per Clinical Trials Arena.

Driving the news: The FDA is proposing treatments be put through randomized controlled trials, in which drugmakers measure the effectiveness of an experimental treatment against a conventional one, instead of widely used "single-arm studies" that lack a comparison.

  • Single-arm studies would be limited to specific instances, and companies would be encouraged to discuss with FDA in advance whether the expected effect is reasonably likely to predict clinical benefit.
  • β€œGiven the limitations of single-arm trials, a randomized controlled trial is the preferred approach to support an application for accelerated approval,” the FDA wrote in draft guidance.

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3. Ohio sues big pharmacy benefit managers

Illustration: Shoshana Gordon/Axios

The state of Ohio is taking pharmacy benefit managers Express Scripts and Prime Therapeutics to court, accusing them of using a Switzerland-based company "to illegally drive up drug prices."

Why it matters: The case increases scrutiny around drug industry middlemen and, in particular, their use of overseas subsidiaries to conduct business, the Wall Street Journal reports.

The details: Ohio Attorney General Dave Yost announced the suit Monday, accusing the Cigna-owned Express Scripts and Prime of price fixing and pointing to Express Scripts' group purchasing organization, Ascent Health Services, created in 2019.

  • Later that year, Express Scripts announced a "collaboration" with Prime Therapeutics and Ascent before relocating Ascent's operations to Switzerland.
  • "Express Scripts and Prime Therapeutics have used Ascent to share pricing, discount and rebate information with each other and with Humana Pharmacy Solutions, an Ascent customer β€” driving drug prices up even higher," according to Yost's office.
  • This has impacted the price of multiple drugs, including driving the price of insulin, the lawsuit claims.

Emailed requests for comment to the companies were not returned by this morning.

The big picture: This isn't the first time Yost has targeted PBMs in court. Yost sued Centene in 2021, alleging it used its PBM's to inflate the cost of care, leading to millions in overpayments, per Healthcare Dive.

4. Data du jour: Female docs face family "penalty"

Annual earnings for U.S. physicians, by gender
Data: JAMA; Chart: Axios Visuals

Female physicians who get married and have children will earn about $3.1 million less than their male counterparts, according to a study published in JAMA Health Forum.

The details: The cross-sectional study of 95,435 U.S. physicians by Dartmouth researchers found pay gaps between all age groups and family statuses. For instance, single female physicians earned about $1.6 million less than single male physicians.

  • The study found the penalty was primarily due to fewer hours worked relative to men.
  • Researchers also found female physicians earn between 21% and 24% less per hour than their male counterparts regardless of whether they were married or had children.

What they're saying: "Women now account for roughly half of students graduating from medical, law and business schools, yet still earn far less than men in these professions," senior author Douglas Staiger, social sciences professor in the Department of Economics at Dartmouth said in a statement.

  • "Our study adds to the evidence suggesting that social norms regarding the roles of men and women at home play an important role in explaining the earnings gap, even for professional women," he said.

5. Catch up quick

πŸ‘€ The blast effect: This is how bullets from an AR-15 blow the body apart. (Washington Post)

πŸ₯ These women survived combat. Then they had to fight for health care. (Washington Post)

πŸ”¬ Heated oral arguments at SCOTUS hint at Sanofi-Regeneron edge over Amgen in its patent spat. (Endpoints News)

πŸ› The fate of abortion rights in Georgia comes down to this major court case. (Axios)

πŸ€ 1 last thing: Turns out, sports may just be good for the soul β€” at least when you catch the game in person, Axios' Kendall Baker writes. New research has found that attending live sporting events improves levels of well-being and reduces feelings of loneliness.

Thanks for reading,Β and thanks to senior health care editor Adriel Bettelheim and senior copy editor Bryan McBournie for the edits.