Jan 24, 2020

Axios Vitals

Good morning. Your stat of the day, via STAT: The major drug makers that belong to PhRMA collectively spent more than $120 million lobbying Congress in 2019.

  • Also, Congress didn't pass any major legislation to lower drug prices.

Today's word count is a meager 574, or a 3-minute read.

1 big thing: Pharma is investing in cancer, not pandemics

Illustration: Lazaro Gamio/Axios

Drug companies don't have much financial incentive to invest research and development dollars into new vaccines and antibiotics, leaving the world vulnerable to future pandemics.

Between the lines: The best-case scenario for these kinds of drugs is that they're lightly or never used. That doesn't sound very good to companies when their R&D dollars could alternatively go to diseases like cancer, which are much more likely to turn a sizable profit.

  • "The possibility for blockbuster sales motivates large drugmakers; little else moves the needle. The revenue potential for many infectious disease drugs is likely to remain limited, so other serious incentives are required," Bloomberg Opinion's Max Nisen writes.

Driving the news: The coronavirus, obviously, and the fact that it's revealed once again how unprepared the world is for a global pandemic.

By the numbers: 20 drug companies spent more than $2 billion on R&D over the last year, but only four of them have major vaccine units, per Bloomberg Opinion. Some drug companies have also stepped away from antibiotic development.

Yes, but: Some drug companies are rushing to develop vaccines to protect against the new virus, WSJ reports.

  • They include Moderna, Inovio Pharmaceuticals and Novavax Inc., as well as researchers at the University of Queensland in Australia.
  • The vaccines could be ready for human testing in a few months, but approval would take longer.

Go deeper: Dwindling antibiotics undermine fight against drug-resistant infections, WHO warns

2. Mapping the coronavirus
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Data: National Health Commission of the People’s Republic of China, the Centers for Disease Control and Prevention and the World Health Organization; Chart: Danielle Alberti/Axios
3. Colorado ain't buying what hospitals are selling

We have a new skeptic of hospitals' "cost-shifting" theory, Axios' Bob Herman reports: Colorado.

Driving the news: The Colorado Department of Health Care Policy and Financing released a new report that said hospital profits in the state have roughly tripled over the last decade — from about $500 per patient in 2009 to $1,500 per patient in 2018 — all while "uncompensated care levels in Colorado are at historic lows."

  • Hospitals have long argued that they need to charge private health insurers much higher prices because payments from Medicare and Medicaid are too low.

Yes, but: Colorado has done everything in its power, through state and federal law, to expand Medicaid coverage and increase Medicaid rates — yet Colorado hospitals have continued to raise private prices.

  • Despite higher rates for public programs, fewer uninsured people and less bad debt, employers and their workers have not seen any financial burden lifted from hospitals, the report says.
  • The Colorado Hospital Association submitted a statement to Axios that essentially said it didn't like the report, but didn't refute any of the report's facts.

The bottom line: "Cost shifts are driven by strategic hospital decisions, not by shortfalls from public insurance," Colorado officials wrote.

Go deeper:

4. Insys founder gets 5.5-year prison sentence

A judge yesterday sentenced John Kapoor, the founder and former CEO of Insys Therapeutics, to 5.5 years in prison after a jury found him guilty in a bribery and racketeering scheme around the company's potent opioid drug, Subsys.

Why it matters: "Kapoor, 76, is now the highest-ranking pharmaceutical executive to be sentenced in a case linked to the opioid crisis," Reuters reports.

Go deeper: Opioid maker Insys files for bankruptcy

5. Indian Health Service sued

Three Native American men are suing the Indian Health Service, saying it failed to protect them from sexual abuse by a pediatrician about 30 years ago, the Wall Street Journal reports.

Background: WSJ and PBS series "Frontline" revealed last year that IHS officials tried to silence whistleblowers and ignored complaints about pediatrician Stanley Patrick Weber's behavior.

  • Congressional hearings and five federal investigations followed, Axios' Marisa Fernandez writes.

IHS, which provides medical care for 2.6 million tribal members, employed the pediatrician for 30 years before he resigned in 2016.

What to watch: A White House task force is expected to release recommendations next month about how to further protect IHS patients, per WSJ.

Go deeper: Nearly 70 patients died in Indian Health Service's care