Aug 29, 2017

Axios Vitals

By Caitlin Owens
Caitlin Owens

Good morning, and let's start with a bit of news: It's my last week writing Vitals! Starting next week, Sam Baker will be your host. He's got that rare ability to make you smarter about health care, even the wonkiest parts, while keeping it quick, easy and fun. Vitals 2.0 will be way better, so now's the time to get all of your friends to sign up.

And don't worry, I'm not going anywhere. I'll still be editing and contributing to Vitals — while taking a broader role to work across all areas of Axios coverage. So with that, here's the health care news you need to know.

No “bare counties” doesn’t mean no problems

No more “bare counties" with no Affordable Care Act insurers next year — so, hooray, all done, the end, right? Not really. Bob Herman has a smart rundown this morning of the pros and cons of the ACA markets now that the most urgent crisis appears to have passed. (We won't know for sure, as Bob points out, until insurers sign contracts next month to lock in the coverage.)

What's better now: People who buy health insurance on their own won't be left out in the cold. And many of them will be able to get subsidies.

What's not: A lot of them will only have one insurer to choose from, which isn't much of a choice. And the insurers that don't have competitors can charge pretty much whatever they want.

The bottom line: This is not the implosion President Trump and congressional Republicans warned us about. But does that mean the ACA markets are stable? Hardly.

Read more here.

Here’s why pharmaceutical advertising is skyrocketing

This one's from my Axios colleague Sara Fischer, who writes the weekly Axios Media Trends newsletter: Pharmaceutical advertising is booming at a time when other category leaders continue to decline, according to Standard Media Index, a company that tracks ad spending data.

The back story:

  • Prescription ads generally target older audiences, which continue to be one of the top demographics for news. As news programming grows, the pharmaceutical industry is taking advantage of that reach.
  • As baby boomers age, the audience for prescription drugs increases, which means the industry has more people to reach.
  • Pharmaceutical ads often cost more because of their length. (They have regulatory requirements to disclose side effects, dosages, etc., so they often need to take out 60-second ads as opposed to 30-second ads.)

Read more here. And sign up here for Sara's Media Trends newsletter for more news like this.

Uninsured rate falls — just a bit

A little more than 28 million people, or 8.8% of the U.S. population, were uninsured at the end of the first three months of this year, according to a new report from the Centers for Disease Control and Prevention's National Health Interview Survey — considered to be the gold standard of coverage data. That was barely down from the 9% uninsured rate in the same period of 2016 (the CDC said it was a "nonsignificant difference.")

Why it matters: Americans maintained health coverage through the opening months of Donald Trump's presidency despite calls to repeal the ACA. But the CDC data also show the limits of the ACA. The law was not designed to cover everyone, as the uninsured rate has plateaued.

One interesting number: High-deductible plans are taking off — 42.3% of people under age 65 were in a high-deductible health plan, compared with 39.4% last year and 25.3% in 2010.

Gilead’s expanding portfolio of expensive drugs

Gilead Sciences is about to add cancer drugs to its offerings, now that it's buying Kite Pharma for $11.9 billion. What does that mean? It means Gilead will get into the business of cell therapy for cancer. But as Forbes' Matthew Herper reports, it also continues "the unavoidable narrative of pharmaceutical innovation: medical breakthroughs at sky-high prices."

What it could cost: Per Business Insider, the price tag for Kite's cell therapy could be as high as $325,000. But there's a lot of uncertainty. Kaiser Health News reports that British health authorities say a $649,000 price for a competing drug by Novartis would be justified.

What the cancer treatments do: The personalized therapy uses the body's immune cells to attack malignant cells.

What to watch: Gilead chief executive John Milligan told Herper that the high price of the Kite therapy will be justified because, naturally, it's expensive to make: "The individual per patient cost to manufacture has got to be the highest in the industry."

The bottom line: There's an argument to be made that blockbuster drugs save money down the road if they can cure their patients. But given that Gilead also took heat for the high price of its hepatitis C drugs, it will have to convince the public that the benefits of its new cancer drugs are worth the price.

How Harvey will affect health care providers

The investment banking firm Jefferies warned yesterday that Hurricane Harvey will have a big financial impact on Texas health care facilities and providers. In an industry note, Jefferies analysts said the hospital chain HCA would be hurt the most, since about 11% of its beds are in the areas hardest hit by the storm, including Houston and Corpus Christi.

Key quote: “The degree of disruption caused by Hurricane Harvey ... [will] cause a notable disruption, specifically for hospitals, physician offices, surgery centers, and labs in those markets, as flooding and loss of power in the affected areas will likely prevent people from accessing healthcare facilities."

Why it matters: Yes, it's a business impact — but it also means that a lot of potential patients won't be getting medical care.

Drug price lawsuit against CVS is dropped

Earlier this month, we told you to keep an eye on a lawsuit filed against CVS by a woman who claimed she was charged more for a generic medication than she would have paid if she hadn’t used insurance. Yesterday, her law firm, Hagens Berman, withdrew the lawsuit after CVS told the firm that the lawsuit was riddled with errors.

What CVS said: Spokesman Mike DeAngelis said the lawsuit "contained numerous factual misstatements that, when corrected, make it clear that the plaintiff named in the suit was not overcharged for her prescriptions.” One example: It compared the copayments to "different drugs, dosages and/or quantities than what was actually purchased by the plaintiff.”

What’s next: The law firm said it might try again with a different plaintiff. "We plan to refile the lawsuit against CVS related to its generic drug pricing scheme promptly,” Steve Berman, the law firm’s managing partner, said in a statement. If there is a next round, though, it’s only worth watching if the next case is more airtight than this one.

Caitlin Owens

What we're watching this week: Govs. John Kasich and John Hickenlooper release ACA stabilization plan. Expected late in the week.

What we're watching next week: Senate HELP Committee hearings on bipartisan ACA stabilization bill, Sept. 6 and 7; markup of Senate funding bill for HHS, dates TBD.

What we're watching in September: Senate Finance Committee hearing on CHIP reauthorization. Also, Healthcare Security Forum, sponsored by the Healthcare Information and Management Systems Society, Sept. 11-13.

What did we miss? Lemme know: david@axios.com.