Aug 6, 2019

Axios Vitals

Good morning from New York City, where I'll be until Wednesday morning. If you are around with time to kill, let's grab coffee, pizza, bagels — whatever fits the stereotype.

Today's newsletter is 820 words, or 3 minutes.

1 big thing: America's mental health problem isn't mass shootings

Illustration: Lazaro Gamio/Axios

The U.S. has a gun violence problem and a mental health problem. But conflating the two won't solve either.

The big picture: The average person suffering from a mental illness is no more prone to violence than anyone without a mental illness, and mental-health advocates say exaggerating a link between mass shootings and mental illness can be stigmatizing and harmful.

Between the lines: "A very small proportion of people with a mental illness are at increased risk of violent behavior if they are not treated," 2 former CEOs of Mental Health America wrote in Health Affairs in 2013.

  • These are the people with the most severe mental illnesses — often those characterized by paranoia and delusions, the authors added. These people also may have a substance abuse problem or a "history of victimization."

Yes, but: Nearly two-thirds of gun deaths are suicides, and “mental illness is a very strong causal factor in suicide," Duke University's Jeffrey Swanson said.

Even if Congress did decide to further limit people with mental illness' access to guns, they'll quickly run up against the mental health system's broader shortcomings.

  • A patient must interact with the system to receive a mental health diagnosis. And one of the system's biggest problems is that many people with mental illness can't get the treatment they need.
  • Only 25% of active shooters included in an analysis released by the FBI last year had ever been diagnosed with a mental illness, even though 62% had appeared to be struggling with some kind of mental health issue in the year before the attack.
  • "The act of somebody who goes out and massacres a bunch of strangers, that’s not the act of a healthy mind," Swanson said. "But that doesn’t mean that person has a mental illness."
2. The rise of authorized generics

Drug companies are increasingly trying to maximize their profits by creating generics to compete with their own brand-name products, Kaiser Health News reports.

Why it matters: "Authorized generics" can be just as profitable, if not more profitable, than the branded drug. They also can stifle competition from other generics, leading to higher prices for patients.

By the numbers: There are almost 1,200 authorized generics in the U.S., according to the FDA. Last year, there was about one new authorized generic a week.

  • For every $1 invested into an authorized generic, there's a return of $51, according to research firm Cutting Edge Information.

What they're saying: A spokesperson for PhRMA told KHN that authorized generics increase competition, which "reduces prices and results in significant cost savings."

The other side: They can “stave off generic competition and make sure that generics can’t get much of a foothold when they do get to market,” Robin Feldman, a professor at the University of California Hastings College of the Law, told KHN.

  • And because authorized generics often aren't subject to rebates, their net price could end up being higher than the net price of the original branded drug.

Go deeper: Reality check on Lilly's new, cheaper insulin

3. Another U.S.-China problem

China’s dominance in drug manufacturing is a national security issue, Bloomberg’s Anna Edney reports.

Details: American officials have expressed two concerns:

  • If China ever decided to cut off the flow of drugs and active ingredients, the U.S. (and many other countries) would likely face steep shortages.
  • Safety and quality lapses in Chinese manufacturing also pose a risk to the U.S., including drugs taken by military personnel.

“The national security risks of increased Chinese dominance of the global [active pharmaceutical ingredient] market cannot be overstated,” the Defense Health Agency’s Christopher Priest told an advisory panel last week, per Bloomberg.

4. Medicare sets higher hospital pay for 2020

The federal government approved a 3% all-in pay bump for Medicare’s inpatient services in 2020, equating to $3.8 billion in additional funding to hospitals, Axios' Bob Herman reports.

The bottom line: Even though the final raise is down from the proposed regulation (which would’ve raised Medicare inpatient spending by $4.7 billion), this is one of the most generous rules hospitals have seen in years, as mandated cuts from the Affordable Care Act are phasing out.

Yes, but: Some hospitals will benefit more than others, especially when it comes to specific payment policies.

  • Medicare will continue to make “add-on” payments for CAR-T therapy, but decided against creating a new diagnosis code for the cancer treatment — something hospitals and drug companies have vigorously lobbied for.
  • Hospitals in higher-wage cities get paid more than facilities in rural areas, and Medicare is finalizing changes that would attempt to lessen the growing discrepancies.
  • Some hospitals in high-wage areas have been known to game this system.

Read the rule

5. A new wrinkle in major opioid case

Photo: Getty Images

States don't like the settlement plan pitched by the plaintiffs in the massive federal opioids case pending in Ohio, which could slow down any momentum toward a settlement, the NYT reports.

  • They say the plan — pitched by lawyers for nearly 2,000 cities and counties — gives outsized power to localities, not states.
  • States have also sued these same companies, and attorneys general don't want to be boxed out of negotiations or the resulting agreement.
  • They also think that states are better equipped to manage the settlement money.