Jun 5, 2018

Axios Vitals

By Caitlin Owens
Caitlin Owens

Good morning … D.C. readers — You're invited to join Axios' Mike Allen and Bob Herman on Thursday for a conversation on the impact of innovation on health care including technology, biosimilars and more.

They'll be talking with Reps. Erik Paulsen and Sander Levin as well as CAMTech's Dr. Kristian Olson and Georgetown professor Sabrina Corlette. RSVP here.

1 big thing: ACA premiums keep going up

Two more states have released proposed rates for the next year of Affordable Care Act coverage and, no surprise, they’re all pretty steep.

  • Insurers in Washington state’s individual market are seeking a 19% increase, on average, the state said yesterday. Specific insurers’ hikes range from less than 1% up to nearly 30%.
  • In New York, the average proposed increase is 24%.

Key caveats:

  • These are proposed rates — the final increases could be different.
  • We all want to see an average, to get a handle on the overall situation, but mileage will vary considerably from one insurer to the next. The increases they’re seeking for next year depend in part on how much they raised their rates this year (some, for example, had already accounted for the possibility of losing the individual mandate).
  • Consumers’ actual premium costs will depend on their age, where they live, whether they smoke, and whether they get financial help from the government.

Yes, but: The trendline here is real. New York regulators attributed about half the proposed increase in average premiums to the loss of the individual mandate, and insurers have been clear that regulatory moves from the Trump administration are also making them nervous.

2. Drug prices keep going up

Yesterday's federal report on rising Medicare Part D drug spending led to a very clear conclusion: Giant price hikes are costing taxpayers and the government a lot of money.

ICYMI: HHS’ Office of the Inspector General found a 62% spike in federal spending in Medicare Part D — even after accounting for rebates and discounts, and even though the total number of prescriptions declined over the same time period.

“It’s a pretty damning indictment" of drug pricing practices, Niall Brennan, executive director of the Health Care Cost Institute, told Axios’ Bob Herman. “The OIG is not known for doing sloppy work.”

  • Brennan’s group found similar patterns when it looked at multiple sclerosis drugs — MS prescriptions and use were down, but prices rose and more than made up for any shortfalls.

Between the lines: The OIG report gets at two big issues with the country’s drug pricing system, Bob reports:

  1. Pharmacy benefit managers and other middlemen are getting their fill from rebates and other means. This was implied in Sanofi’s recent report showing the drug company had an 8.4% decrease in net price for its products in 2017.
  2. But drug companies still control a lot of the health care system’s wealth, and any meaningful changes would have to target their pricing or the U.S. patent system.

What they’re saying: PhRMA, the industry’s leading trade group, argued the OIG’s report “paints a misleading picture of medicine spending in the Part D benefit,” but did not offer any responses to why drugmakers hiked prices on drugs at six times inflation or why overall spending still outpaced growth in rebates.

3. Judge tells LePage to expand Medicaid already

A court in Maine told Gov. Paul LePage yesterday to quit dragging his feet on the state’s Medicaid expansion. Voters signed off on it last year, through a ballot initiative, but LePage’s administration — as expected — has not lifted a finger to actually put the policy in place.

The big question: Will he comply now, or keep running out the clock until he leaves office after the November elections? The court gave LePage’s administration a week to file the necessary paperwork with the federal government.

4. Apple opens health data to new apps

Apple CEO Tim Cook talking about apps. Photo: Justin Sullivan/Getty Images

Apple announced yesterday that it will open its health-records feature to third-party developers, which will allow them to create new apps using consumers' health data.

Why it matters: Apple's foray into health records has gotten pretty good reviews so far, and this move will make that technology more widely available.

  • Apple is providing developers with the tools to create apps that would, for example, help patients manage their medications.
  • "For the first time, consumers will be able to share medical records from multiple hospitals with their favorite trusted apps, helping them improve their overall health," the company said in a statement.
Caitlin Owens

Correction: Yesterday's Vitals got Sen. Tammy Baldwin's name wrong. We apologize for the error.

What we're watching today: HHS Secretary Alex Azar gives a speech to a joint meeting of the American Health Care Association and the National Center for Assisted Living (8:30am). Based on excerpts of his prepared remarks, expect him to stick largely to familiar ground.

Medicare's trustees deliver their annual report on the program's finances.

What's on your radar? baker@axios.com.