Good morning and happy Monday. We've got your first look at how much money the health insurance giants spent on those failed mergers and we'll help you get smarter on the latest huge drug price hike. Meantime, the Obamacare town halls are getting louder and rowdier — just in time for a congressional recess that could be full of them.
Aetna didn't get to merge with Humana, and Anthem didn't get to merge with Cigna, but at least they're $1.5 billion poorer for it. That was the total amount of fees they paid to the lawyers and investment bankers who tried to help them combine, Bob Herman found after adding up all the fees they disclosed in Securities and Exchange Commission filings. Bob has been working on this piece for quite a while, and it's a good look at just how much the companies sank into the efforts — and how all of that spending affects consumers and investors.
Among the firms that got the money: banks like Goldman Sachs, Citigroup and Credit Suisse, and law firms like White & Case and Jones Day. It started with summer 2015, when the proposed mergers were announced, and ended with the court rulings that slapped them down. Except it's not really over for Anthem, since it's going to appeal the ruling against the Cigna merger. Read Bob's story here.
You've probably seen the viral video of a Florida GOP official getting shouted down this weekend at a town hall meeting after trying to revive the old, false rumor about Obamacare "death panels." (Here's what I wrote about it on Saturday.) There's been a lot of pro-Obamacare eruptions at Republican town halls lately, so here's what we're learning from them:
White House senior policy adviser Steve Miller told Face the Nation yesterday that "we have a plan that we're putting into motion now" on President Trump's Obamacare replacement, and that we should see the plan "very soon." The only specific piece he mentioned was an expansion of health savings accounts, but he insisted that "we're very far along on this. Farther than many people realize."
Reality check: It could be true, but remember that Trump has claimed before that his plan was almost ready to go, and that he'd release the plan as soon as Tom Price was confirmed as Health and Human Services secretary — which has already happened.
The repeal-first crowd: Jonathan Swan reports that the House conservatives who met in New York last week are united in their calls for a sweeping, quick Obamacare repeal vote. His source says there was a "consensus that we need to move forward with a repeal vote that is at least as robust as what we have previously passed in 2015 and that we should move quickly." That's important because it's a big block of Republicans who may not be as interested in replacement as the rest of the party.
The latest sky-high drug price hike comes from Marathon Pharmaceuticals, which is going to charge a list price of $89,000 for an old drug that will be used to treat Duchenne muscular dystrophy. There's been a lot written about it over the last few days, but so far, no official comments from President Trump — who's still on a tear about rising drug prices — or Republicans and Democrats in Congress who have focused on the issue.
Most analysts agree it's not on the same level as Martin Shkreli — who jacked up the price of an old drug without adding any new uses for it — but it's not good. "This is the kind of thing that gives the entire industry a black eye, even though it's justified under the law," Paul Howard of the Manhattan Institute, who has done a lot of work on medical innovation, told me. Here are the fixes he suggested:
Drug pricing is so complicated it'll make your head hurt, but Forbes' Matthew Herper makes it sound easy. His take on the Marathon price hike: It's a case where they did it because the law allows it. Yes, Marathon had to do the clinical trials to get the Food and Drug Administration's approval to market the drug in the United States. But a 6,000 percent price hike? It's "absurd," Herper writes, and can't be justified just because drug companies have to jump through all those hoops for a drug that was already available in other countries at way lower prices.
What we're watching this week: Senate Finance Committee confirmation hearing for Seema Verma, Thursday; the release of the HHS rule to stabilize the Obamacare markets, date unknown.
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