Apr 10, 2019

Axios Vitals

By Caitlin Owens
Caitlin Owens

Situational awareness: Chuck Grassley has won a Grammy, and the federal government has charged 24 people for their alleged participation in a health care fraud scheme leading to $1.2 billion in losses. Choose your news.

1 big thing: Push to lower drug prices gathers steam

Sens. Ron Wyden and Chuck Grassley at a Finance Committee hearing. Photo: Tom Williams/CQ Roll Call

While it's too soon to declare a drug pricing fire, yesterday saw several smoke signals as the push to lower drug prices inched forward.

The big picture: Lawmakers took real steps toward finding reforms that can gain bipartisan support, focusing on both drug manufacturers and members of the drug supply chain.

  • The leaders of the Finance Committee have asked the HHS inspector general for an investigation into "spread pricing," Bloomberg reports, a practice by pharmacy benefit managers in which they charge health plans one amount for a drug and reimburse pharmacies at a different, lower rate.
  • The House Ways and Means Committee unanimously passed a drug price transparency bill — something that previously has been pushed for mostly by Democrats.
  • Maryland passed a bill late Monday night creating a board that would study drug prices and then make recommendations on how to lower them, WTOP reports.

Yes, but: The Maryland bill originally allowed the board to set upper limits on what all plans would pay for certain drugs, but the state legislature watered it down — a win for the drug industry.

  • And while transparency is widely regarded as an important step, that alone probably won't solve the drug price problem.

The bottom line: None of these measures are going to make a huge dent in total drug spending, and none of them take pharma head-on. But any bipartisan action on bills that the drug industry doesn't like is another step into a new political world.

2. What "Medicare for All" means for you

Illustration: Lazaro Gamio/Axios

Sen. Bernie Sanders will introduce a new version of "Medicare for All" today that's even more ambitious than his last one — which was already more ambitious than any other health care system on Earth, Axios' Sam Baker writes.

Sanders’ plan would move almost everyone — whether you’re on Medicare or Medicaid, buy insurance on your own through the Affordable Care Act, or get it through your job — into a single government-run program.

  • You could not keep your existing plan.
  • You could keep your doctor. When the Affordable Care Act made some people switch doctors, it's because they had to switch insurance plans, and each plan has its own network of doctors and hospitals. With a single national plan, though, there are no networks.
  • Coverage would be incredibly generous. Sanders' program would cover just about everything, including vision and dental, all with no premiums and no out-of-pocket costs (like copays and deductibles) — unlike today's private insurance.

The other side: Taxes would go up. A lot. That’s the trade-off for eliminating premiums and deductibles. Sanders has not said which taxes he would raise.

  • Overall spending would be about the same as what we’re expected to spend under the status quo, according to multiple estimates. We'd just pay for it differently.
  • Today's hodgepodge of premiums, copays, and state and federal spending would all be rolled into one federal, taxpayer-funded program.

Go deeper

3. Idaho amends voter-approved Medicaid expansion

Idaho Gov. Brad Little yesterday signed into law a bill adding work requirements and other addendums to the Medicaid expansion program approved by 61% of voters in November, the Idaho Statesman reports.

  • Idaho is now the second red state to make changes to what voters approved last year, following Utah's rollback of its Medicaid expansion.
  • The bill follows the second defeat of work requirements in court, bringing into question whether the work requirements will survive.

Go deeper: The bill may break the law in other ways too, according to the Statesman.

4. Doctor pay on the rise

Doctors' salaries have increased 20% since 2015, according to a new Medscape report, outpacing pay among the general public.

Why it matters: In the health care system, one person's salary is another person's premium, co-pay, deductible, taxes ... you get the picture.

Details:

  • The gap between what male and female doctors are paid increased from 18% in 2018 to 25% in 2019.
  • Four of the five states where doctors make the most are in the South.
  • Nearly three-fourths of physicians said they spend more than 10 hours per week on paperwork. In 2012, about half of respondents said that they had 1–4 hours of paperwork per week.
5. Purdue's cozy relationship with Tufts

OxyContin pills. Photo: Liz O. Baylen/Los Angeles Times via Getty Images

Purdue Pharma and the Sackler family — both of which are facing legal questions about their involvement in the opioid epidemic — made donations to Tufts University's medical school that may have helped advance their business interests, Stat News reports.

  • Tufts, for example, allowed a high-ranking Purdue executive who said in 2003 that OxyContin wasn't addictive to lecture in the pain program and receive the title of adjunct associate professor.
  • The Massachusetts attorney general has alleged that “Purdue got to control research on the treatment of pain coming out of a prominent and respected institution of learning."

Experts told Stat that this isn't necessarily an example of a company buying influence, instead it points to a larger problem:

  • "So much industry money flows to academic institutions, professional societies, and patient advocacy organizations that it’s hard to tease apart what’s a purchase of influence and what’s a marriage of convenience for groups with aligned interests or beliefs," Stat's Andrew Joseph writes.
6. By the numbers: Pharma’s $7 billion in tax savings

Johnson & Johnson, Pfizer, Merck and Abbott Laboratories collectively kept $7 billion in tax savings last year due to lower corporate tax rates and bringing home cash that was parked overseas, according to a new report from anti-poverty charity Oxfam.

Why it matters: The Republican tax law made it possible for the largest pharmaceutical companies to retain money that otherwise would have gone to public coffers, Axios' Bob Herman reports. But as Oxfam notes, there has not been a corresponding increase in drug development or lower drug prices.

The big picture: “These pharma giants are certainly not the only examples of multinational companies benefiting from the new US corporate tax regime,” Oxfam wrote in its report.

  • But companies with large offshore tax holdings “provide a microcosm of the extent to which the wealthiest in our world play by an entirely different set of rules — with profound consequences.” 

Go deeper: Read Oxfam's report

Caitlin Owens

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