Happy Tuesday. Hope you're not missing Sam too much — yet.
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The Trump administration's announcement of a new trade "understanding" with Mexico yesterday included a bullet point on drug patents that could have big implications for the pharmaceutical sector, but is severely lacking in detail.
Why it matters: The issue of drug companies' patent exclusivity period was a huge deal as the Trans Pacific Partnership was being debated, and there are warning signs that the same lawmakers who took issue with the handling of biologics in that deal also are worried about this one.
What we know: The understanding "includes 10 years of data protection for biologic drugs and expanded scope of products eligible for protection," according to a press release from the United States Trade Representative.
Pharma's reaction: “We look forward to analyzing the final text of the agreement once completed to ensure it includes policies that protect against global free-riding, promote research and development and reward ... innovation," said a spokesperson for the Pharmaceutical Research and Manufacturers of America.
What they're saying: “We feel this is bad news for patients who are seeking more affordable biologics. It would delay biosimilar competition," said Jeff Francer, general counsel for the Association for Accessible Medicines.
The bottom line: If pharma gets an expanded class of products eligible for patent exclusivity, it could be a very good deal for them — even if it is shorter than U.S. law.
Republicans have wasted no time in trying to make vulnerable Senate Democrats pay a price for voting last week against an amendment defunding Planned Parenthood.
Why it matters: These Democrats need to win over independent or Republican voters to keep their seats, and thus need to be more conservative than the rest of their party. Tying them to liberal groups and the left wing of their party is one way the GOP is trying to deny them these votes.
The state of play: The National Republican Senate Committee almost immediately released a TV ad slamming Sen. Heidi Heitkamp for her vote against the amendment, saying she "doesn't vote like North Dakota."
Kaiser Health News and NPR rolled out the latest installment of their “Bill of the Month” series, and it’s a doozy.
Driving the news: A 44-year-old teacher with health insurance through his school district had a heart attack last year. After surgery and recovery, he was on the hook for nearly $109,000 in surprise charges because the hospital he went to (owned by HCA Healthcare) was not in-network.
The bottom line: Even patients with decent private health insurance are facing mountainous medical bill debt, my colleague Bob Herman reports.
Long-term care hospitals, which primarily treat very sick people for several weeks and are paid by Medicare in a separate system, are “primarily cost-increasing institutions” that contribute to the waste in the country’s health care system, according to a new working paper from academic researchers.
Key quote: “Our results imply that Medicare could save about $4.6 billion per year — with no harm to patients — by not allowing for discharge to LTCHs.”
The other side: The industry pushed back and said the research did not show all benefits of long-term care. But other independent groups, like the Medicare Payment Advisory Commission, have similarly found skewed incentives in the system, Bob reports.
Go deeper: The Wall Street Journal investigated long-term care hospitals in 2015, finding that many companies discharge Medicare patients after they’ve reached “maximum profitability.”
Three pharmaceutical wholesalers — AmerisourceBergen, Cardinal Health and McKesson — control a vast majority of U.S. drug distribution, and Wall Street is not optimistic things will get better for them in the short term, Bob reports.
How it works: Distributors are paid a percentage of a drug’s list price for their services. And if drug companies are pausing price hikes for political reasons, that hurts distributors, which operate on narrow profit margins. It’s shown in the numbers so far this year.
What they’re saying: Drug distributors aren’t facing extinction by any means, but some investment shops aren’t eager to throw investor dollars toward those companies.
“We are doubtful that manufacturers will place a high priority on making distributors whole in the near term. After all, manufacturers have framed the drug pricing debate to place blame squarely on warped incentives in the supply chain.”— Robert W. Baird & Co. analysts
What we're watching today: California's Assembly is expected to vote on SB 1156, the bill that would cap payments to dialysis providers for patients who have private insurance funded by charities.
What we're watching this week: FDA Commissioner Scott Gottlieb testifies before the Senate health committee tomorrow.
Thanks for reading! Make sure to let Sam know how much you miss him. And, if you have an outrageous medical bill, like the $109K bill in the story above, send us a line about it: email@example.com and firstname.lastname@example.org.