Jun 14, 2019

Axios Vitals

By Caitlin Owens
Caitlin Owens

Situational awareness: Parkinson's disease costs patients, families and the U.S. government nearly $52 billion a year, according to a new report by the Michael J. Fox Foundation.

  • This is about evenly split between direct medical costs and non-medical costs like missed work, early retirement and family caregiver time.

Today's word count: 843 words, ~3 minutes.

1 big thing: What can happen with the CVS-Aetna merger

Photo: Justin Sullivan/Getty Images

Federal Judge Richard Leon is raising antitrust concerns about CVS Health's $78 billion takeover of Aetna, but legal experts say he simply doesn't have authority to nix the deal, Axios' Bob Herman reports.

Why it matters: The biggest companies in health care keep getting bigger, and critics fear anticompetitive effects — but nothing has actually slowed the industry's rapid consolidation.

Driving the news: A New York Post article claimed Leon "appears to be nearing a surprise move to block" the CVS-Aetna deal. But that isn't quite accurate.

  • "[Leon] can't stop the deal because it's already happened," said Joe Krauss, a former antitrust attorney at the Federal Trade Commission now at Hogan Lovells.

Details: CVS and Aetna completed their transaction last November. To satisfy antitrust concerns, the Department of Justice required Aetna to sell its Medicare prescription drug plans.

Where it stands: Leon can either approve that settlement, or "he can say the remedy was insufficient," said Andrea Agathoklis Murino, a former DOJ antitrust attorney now at Goodwin Procter. But he can't undo the merger.

  • If Leon rejects the settlement, DOJ would likely appeal or negotiate a new remedy with CVS and Aetna.
  • DOJ also could order CVS and Aetna to unwind their merger, but that process is messy, and it's never happened under the type of proceedings happening here.

Between the lines: The settlement — making Aetna sell its Medicare drug plans — wouldn't materially change the market share for those policies, nor does it address concerns of combining health insurance and drug benefits.

  • "This is a highly consolidated market," said Mike Landis, litigation director for the U.S. Public Interest Research Group, which opposed the merger. "We hope DOJ will see the light."
2. It pays to do M&A, CVS-Aetna edition

CVS and Aetna have together have spent roughly $900 million on legal and advisory fees since 2017 to get their deal approved, according to Securities and Exchange Commission filings, Bob writes.

Flashback: Lawyers and bankers reaped $1.5 billion from the failed health insurance mergers of a few years ago.

3. HHS gives employers new insurance flexibility

Employers will soon be allowed to use pre-tax dollars to subsidize their employees' individual market coverage, the Trump administration announced yesterday.

What they're saying: This policy is probably good for employers and bad for taxpayers, according to a Brookings analysis of an earlier draft of the proposal.

  • The policy doesn't ban employers from offloading their sickest workers, though it tries to limit that practice.
  • If businesses do shift the workers with the highest medical bills away from the company-sponsored health plan, that plan's premiums would go down. But the influx of sicker patients into the individual market would drive those premiums up.
  • The administration, on the other hand, argues that the rule will enhance competition in the individual market.

The rule also allows employers to contribute to their employees' purchase of short-term plans.

  • These plans appeal to younger, healthier people, which means that older, sicker workers could end up paying higher premiums, according to Brookings.
4. U.S. targeting Chinese cancer researchers

Photo: Aurora Fierro/Cover/Getty Images

The Trump administration's "economic cold war" with China has spread to the search for cancer cures, as the administration tries to rid U.S. research institutions of Chinese influence, Bloomberg reports.

  • "Chinese people in America, including U.S. citizens, are now targeted for FBI surveillance," Bloomberg's Peter Waldman writes.

"The aim is to stanch China's well-documented and costly theft of U.S. innovation and know-how. The collateral effect, however, is to stymie basic science, the foundational research that underlies new medical treatments," Waldman adds.

Details: Cancer researcher Xifeng Wu, an American citizen, resigned in January from a top position at the MD Anderson Cancer Center, after a months-long investigation into her professional ties to China.

  • The investigation was led by the National Institutes of Health and the FBI. Three other Chinese-American scientists also recently left MD Anderson.
  • An NIH official said Wu and 4 other scientists had violated confidentiality requirements and didn't disclose paid work in China.

Yes, but: Cancer research has become increasingly globalized, and U.S.-China collaborations have produced meaningful work.

  • "Ways of working that have long been encouraged by the NIH and many research institutions ... are now quasi-criminalized," Waldman writes.

What they're saying: "Even something that is in the fundamental research space, that’s absolutely not classified, has an intrinsic value," Lawrence Tabak, principal deputy director of the NIH, told Bloomberg.

  • "This pre-patented material is the antecedent to creating intellectual property. In essence, what you’re doing is stealing other people's ideas."
5. We're the worst patients in the world

We're all quick to criticize the U.S. health care system for high spending and poor outcomes, but American patients may also be the problem, the Atlantic's David Freedman writes.

  • One study found that 74% of the variation in life expectancy within the U.S. was attributable to lifestyle factors like smoking and inactivity — behaviors decided by patients, not doctors.

Another big problem is that American patients don't like to be told they can't have expensive care.

  • A survey of 1,000 patients recently found that only 31% view cost as very important when making a health care decision.
  • Other countries often exclude expensive, unproven treatments from health coverage, but "when American insurance companies try this approach, they invariably run into a buzz saw of public outrage," Freedman writes.
  • We also use more speciality care and emergency care than other countries.

Americans are often over-treated, but doctors say that's because patients demand it (and that they fear malpractice lawsuits).

  • And then there are patients who disregard what their doctors say — like failing to take their prescribed medication.
Caitlin Owens