Oct 25, 2018

Axios Vitals

Good morning ... This is cool: Thousands of items and artifacts dug up during the construction of a subway tunnel help tell the story of a city — in this case, Amsterdam — dating as far back as 119,000 B.C.

1 big thing: What to watch in Trump's drug pricing speech

President Trump and HHS Secretary Alex Azar. Photo: Nicholas Kamm/AFP/Getty Images

President Trump is headed to the Department of Health and Human Services this afternoon for a speech on drug prices with HHS Secretary Alex Azar.

What we're watching: Expect a heavy emphasis on Medicare Part B — the part that pays for drugs administered in a doctor's office.

  • Flashback: One of the more ambitious proposals in Trump and Azar's drug-pricing blueprint calls for shifting some drugs from Medicare Part B, which pays fixed prices, into Medicare Part D, where private companies negotiate discounts.

Driving the news: Medicare pays almost twice as much as other industrialized countries for many of the most expensive prescription drugs, according to a new report HHS released this morning that's focused on Part B drugs.

Details: HHS looked at the prices for 27 drugs, comparing them to the prices in 16 similar countries, mostly in Europe. Together, those 27 products make up about 60% of all spending in Part B.

  • The U.S. had the highest price for 19 of those 27 drugs.
  • HHS only found 1 drug whose U.S. price was lower than its average international price. Among the other 26, the U.S. prices were as much as 7 times higher.
  • Medicare pays an average of 1.8 times more than those other countries for these drugs.

The speech starts at 2pm.

2. The outrage over insulin prices

Illustration: Sarah Grillo/Axios

The whole debate over drug prices is a personal one for patients.

But even in that context, the uproar over insulin prices is especially loud — largely because it's an old drug, with no alternatives, that millions of people depend on every day to stay alive. And, it's seen massive price hikes for years.

My colleague Bob Herman unpacks it all this morning...

By the numbers: Eli Lilly, Novo Nordisk and Sanofi control almost the entire insulin market. Together, those companies had about $22 billion in global insulin revenue in 2017. These are the per-vial list prices for common insulin brands, according to Elsevier's Gold Standard Drug Database:

  • Novo Nordisk's Novolog: $289
  • Eli Lilly's Humalog: $275
  • Sanofi's Lantus: $270
  • Of note: Walmart sells an older type of insulin for $25 a vial, but many patients don't want to switch treatments.

What they're saying: Today's insulin is better than past versions, according to Jeremy Greene, a primary care doctor and historian at Johns Hopkins Medicine who has studied insulin.

  • But manufacturers' approach to patenting their products has led to "wild inflation in the cost of living for a person living with diabetes," he said.

There are few easy solutions to bring down prices.

  • Civica Rx, the new not-for-profit drug company, may manufacture insulin in the future. But insulin is a complex drug to manufacture, and existing manufacturers have created patent thickets to shield their products from competition.
  • Competition from a biosimilar version of insulin could help, but would "not get us back to $7 or $15 or even $50 a vial," Greene said.

Go deeper.

3. One man's fever is another man's targeted marketing

Information about your health is quickly becoming a bigger part of Silicon Valley’s targeted-marketing apparatus.

How it works: Data mined from “smart thermometers” helped Clorox target ads for its disinfectant wipes during flu season, the New York Times reports.

  • Clorox partnered with Kinsa, which sells thermometers that sync with users’ smartphones. Kinda has raised about $29 million in venture funding, per the NYT.
  • When the thermometer data showed that lot of people in one area had fevers, Clorox targeted its ads to those zip codes.

“The challenge with Google search or social media or mining any of those applications is you’re taking a proxy signal — you’re taking someone talking about illness rather than actual illness,” Kinsa founder and CEO Inder Singh told the Times.

Amazon also appears to be moving in a similar direction, reportedly patenting technology that would allow Alexa to tell when you’re sick and offer to order cough drops for you off of Amazon.

There are also more direct therapeutic uses. In addition to its marketing data, Kinsa has a partnership with telemedicine firm Teladoc that allows users who use both products to transfer data between the two.

  • "If you have a newborn who has a fever, you need to see the doctor right away and if it’s 3 a.m., I’m very happy to present you the option to talk to a telemedicine doctor,” Singh said.
4. Medicaid spending outpaces enrollment
Expand chart
Adapted from KFF; Chart: Axios Visuals 

Medicaid spending is rising even though enrollment is flat, according to the Kaiser Family Foundation’s annual survey of state Medicaid directors.

This is unusual. Historically, enrollment is the key driver of overall Medicaid spending, and the two have tended to rise or fall roughly in tandem.

Why it’s happening: Enrollment is flat largely because the economy is doing well. Medicaid’s rolls generally swell during a recession; low unemployment keeps the program steady.

  • Spending growth is outpacing enrollment growth because of high prescription drug costs, Kaiser says, particularly drugs to treat hepatitis and HIV.
  • Many states have also bolstered their coverage for mental health and addiction treatment services, in light of the opioid crisis.

What's next: Enrollment is being pulled in both directions.

  • Red states’ embrace of work requirements will shrink their Medicaid programs.
  • But a combination of ballot initiatives and competitive governor’s races this year could bring more states into the Affordable Care Act’s Medicaid expansion, potentially causing an enrollment bump in 2019 or 2020.
5. Amgen cuts prices 60% for cholesterol drug

Amgen is cutting the list price for Repatha, a biologic drug that treats high cholesterol, by 60% — bringing it down to the low, low price of $5,850 per year.

What they’re saying: “Today's action reflects … Amgen's support for the goal of President Trump and his Administration to lower the price of drugs for U.S. consumers,” the company said.

  • Amgen is one of the companies that delayed scheduled price hikes in the second half of this year, in response to public pressure from Trump. Actually reducing prices is a much more significant step.

Between the lines: This isn’t pure benevolence — a price cut should also help boost sales. Repatha has seen “far slower adoption than expected for what once thought to be a sure-fire blockbuster,” Bloomberg reports.

  • More than 40% of Repatha patients are on Medicare, according to Bloomberg, and Medicare enrollees often pay a percentage of drugs’ list prices.
6. FDA approves new flu treatment

For the first time in almost 20 years, the Food and Drug Administration yesterday approved a new drug to treat (rather than prevent) the flu — just in time for flu season.

Details: The drug, Xofluza, is taken in a single dose. When taken within 48 hours of developing flu-like symptoms, it can help patients get over those symptoms faster, according to the FDA.

Yes, but: "While there are several FDA-approved antiviral drugs to treat flu, they’re not a substitute for yearly vaccination," FDA Commissioner Scott Gottlieb said in a statement.

Be smart: Get a flu shot.