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Good morning, and welcome to 2020! I hope you all had a wonderful holiday season and are feeling refreshed heading into the new year.

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Today's word count is 883, or a ~3-minute read.

1 big thing: Pharma hikes prices for hundreds of drugs

Illustration: Sarah Grillo/Axios

Pharmaceutical companies began 2020 the same way they begin every year: with price hikes on hundreds of drugs.

Between the lines: The price increases are salt in the wound following Congress' failure to pass meaningful drug price legislation in 2019, and are already being used to make the political case for action this year.

By the numbers: As of Friday, drug companies had increased the prices of 445 products by a median of 5%, according to an analysis by 3 Axis Advisors. More hikes are expected throughout January.

  • Pfizer increased the prices of 58 drugs, the most of any company by far. Novartis, Allergan and GlaxoSmithKline each had counts in the twenties.

Some notable increases, per Axios' Bob Herman:

  • AbbVie: ⬆️ 7.4% on Humira, the world's top-selling drug that is facing major competition and lower prices everywhere — except the U.S.
  • Biogen: ⬆️ 6% on Tecfidera, a multiple sclerosis drug that is facing a major patent lawsuit.
  • Gilead: ⬆️ 4.8% on a host of medicines, including its main HIV drugs (Truvada, Descovy and Biktarvy).
  • Purdue Pharma: ⬆️ 5% on its OxyContin painkiller, all while the company sits in bankruptcy court and the Sackler owners dangle billions in public settlement funds.

Yes, but: List prices don't reflect discounts and rebates, which reduce net prices. List prices do, however, affect people who have high deductibles or are uninsured.

The bottom line: Congress these days is much better at doing nothing than passing legislation, and its inertia is only going to be made worse by the November election. Until something changes, expect increases to happen again.

2. 2020 health policy will be made in the states

Illustration: Aïda Amer/Axios

With legislation in Congress likely to be blocked by partisan division and interest group opposition, much of the real action in health care this year will be in the states, the Kaiser Family Foundation's Drew Altman writes in today's column.

The big picture: States don't have the money or purchasing power the federal government does, but their decisions nevertheless affect millions of people, and they could signal the future of federal reform.

What to watch: Colorado and Washington are implementing public insurance options that could be a model for Democrats at the federal level.

  • Pennsylvania and New Jersey are taking over their Affordable Care Act marketplaces from the federal government.
  • California is embarking on an ambitious state-financed coverage expansion.

State interest in Massachusetts-like cost controls may grow, as could interest in using Medicaid to pay for non-medical services for high cost patients, as North Carolina is doing.

The other side: Idaho and other red states are promoting short-term insurance plans as an alternative to the Affordable Care Act.

  • Georgia is seeking ACA waiver plan to ditch the state's marketplace and a subsidy scheme allowing healthier consumers to choose skimpier plans that do not meet all ACA standards.
  • Tennessee is seeking a form of per capita cap within Medicaid, with broad flexibility and favorable terms for the state.
  • Red states' efforts to implement work requirements for Medicaid appear to be faltering in the face of adverse court decisions and opposition. But the Trump administration is still approving them.
3. The medications that are thrown away
Expand chart
Data: Chronic Condition Data Warehouse (CCW); Table: Axios Visuals

Last year, Medicare paid for $725 million worth of expensive medications administered in outpatient clinics — things like chemotherapy drugs — that ended up being discarded, according to new data released by the federal government.

Why it matters: Although that amount is just 2% of what Medicare paid for those types of infusion drugs, that's still a "very astonishing amount of waste," said Rena Conti, a health economist at Boston University who has studied the issue, Axios' Bob Herman reports.

By the numbers: 10 highly discarded drugs accounted for 63% of Medicare's wasted dollars.

Between the lines: Drugs that are given intravenously and are based on someone's weight are more difficult to administer than pills, and some cannot be reused after the vials are opened — thus making them prone to some inevitable waste.

  • But some pharmaceutical companies package drugs in oversized single-use vials, knowing a lot will get thrown out but will lead to more reorders and sales.

Yes, but: Requiring companies to make more appropriate vial sizes may not reduce wasted medications or save money.

  • Researchers say drug companies could easily adapt because, as monopolists, they would still be able to charge whatever they want regardless of the vial of dose size.

Hospitals and doctors play important roles, too, because they control the purchasing and use of these infused drugs.

  • However, "the system does not reward hospitals to be good stewards of resources," Conti said.
4. New year, new vaping policy

For those of you who completely checked out over the holidays, the biggest health care news was that the Trump administration finally issued its contentious vaping policy last week.

Details:

  • Fruit, mint or dessert-flavored vaping cartridges are banned, but menthol and tobacco flavors can still be sold.
  • All flavored e-cigarette liquids that come in vials for tank vaping systems — mainly sold in vape shops — will still be allowed.

The other side: Both Republicans and Democrats in Congress and heads of public health organizations, including the American Heart Association and the Campaign for Tobacco-Free Kids, are concerned the guidelines don't go far enough.

5. While you were weekending...
  • 20 states and Washington, D.C. formally asked the Supreme Court on Friday to review the major ACA case in its current term, which would resolve it before the 2020 election.
  • Pharmaceutical companies trying to develop new antibiotics are struggling, the Wall Street Journal writes.
  • The U.S. is facing a shortage of geriatricians, and the problem will only worsen as the population ages, the New York Times reports.
  • And in case you missed it last week while Vitals was off, a new study in the New England Journal of Medicine found that hospital mergers don't improve quality of care, Bob writes.