Good morning. Yesterday I learned, thanks to Bloomberg, that "Ebola bonds" are a thing. Apparently they're very lucrative, even as the Ebola outbreak rages on.
Today's word count: 890 words, or ~3 minutes.
Illustration: Aïda Amer/Axios
Several states have made ambitious attempts to address health care costs, only to be thwarted by the hospital industry.
Why it matters: States' failures provide a warning to Washington: Even policies with bipartisan support — like ending surprise medical bills — could die at the hand of the all-powerful hospital lobby.
The big picture: Hospitals are the biggest contributor to rising health care spending, and states are on the leading edge of trying to curtail those costs.
Driving the news: Hospitals' most recent political victory came in North Carolina, where large systems were able to remain in state employees' health plan without agreeing to the state's proposed payment rates, according to the Charlotte Observer.
What we're watching: Congress and the Trump administration are trying to pull off several reforms that hospitals oppose — including price transparency measures and a federal prohibition on surprise billing that would be similar to California's.
The bottom line: If the state battles are any indication, all of those political battles will be difficult, if not impossible, to win.
Pharmacy benefit managers negotiated $18 billion worth of rebates from drug manufacturers within Medicare’s prescription drug program in 2016, and they retained less than 1% of those rebates for themselves, according to a new Government Accountability Office report.
The big picture: This isn’t surprising, as Medicare is structured so that PBMs pass pretty much all rebates back to the federal government. While the GAO report offers a good base of how middlemen affect drug prices in Medicare, it does not fully address larger issues, my colleague Bob Herman reports.
Illustration: Sarah Grillo/Axios
The Food and Drug Administration yesterday approved Pretomanid Tablets, when used alongside 2 other antibiotics, to treat an extremely drug-resistant strain of tuberculosis, my colleague Orion Rummler writes.
By the numbers: "Tuberculosis has now surpassed AIDS as the world’s leading infectious cause of death," the New York Times reports.
What's new: Before the FDA approved this combination therapy, the most common treatment for this type of tuberculosis required patients to take around 30 pills a day plus sometimes daily injections for at least 18 months.
The bottom line: Although the new drug is now approved only in the U.S., FDA approval is a signal to the rest of the world that this treatment has validity.
A new Health Affairs study throws cold water on the idea that the U.S. spends so much more on health care than other countries because we spend less on other social services.
Between the lines: Instead, our spending on social services as a percentage of GDP is actually greater than the average of OECD countries, and there's a positive correlation between a country's spending on social services and its spending on health care.
The bottom line: It's the prices, stupid.
Novartis let go of the top 2 scientists in its gene therapy department AveXis shortly after learning about data falsification related to Zolgensma, the world's most expensive drug, STAT reports.
The timeline: A source told STAT that the scientists “have not been not been involved in any operations at AveXis since early May 2019,” and a source confirmed to STAT that their departure was connected to the data manipulation.
Why it matters: "The news will likely only amplify questions as to why Novartis delayed notifying the FDA of concerns," STAT's Damian Garde and Matthew Herper write.