Nov 15, 2019

Axios Vitals

By Caitlin Owens
Caitlin Owens

Good morning, and happy Friday.

Today's word count is 926, or ~3 minutes.

1 big thing: What lower prices would mean for drug companies

Illustration: Eniola Odetunde/Axios

Drug pricing regulations would not decimate the pharmaceutical industry, according to an analysis from health policy researchers at West Health and Johns Hopkins.

Why it matters: This throws some cold water on Big Pharma's claims that new drug research and investments would evaporate if the federal government limits what they can charge for medications — the proposal du jour in Congress and the White House, Axios' Bob Herman reports.

Details: The report from West Health, a policy group funded by telecom moguls Mary and Gary West, found that drug companies have the highest profits of any industry when calculated as a "return on invested capital." And those profits would still be among the top if drug sales were reduced through federal negotiations or price caps.

  • "Pharma will still have this high rate of profitability, but it's also less volatile than other industries," said Sean Dickson, a health policy director at West Health and co-author of the report. "The demand for drugs is inelastic — people need to take them to stay alive."

Yes, but: Some economists and analysts criticized the report's methods — for example, focusing on publicly traded drug companies while leaving out smaller, failed drug firms could skew profitability.

  • And while pension funds and institutional investors would not abandon pharma, the industry likely would change how and where to spend research dollars.

PhRMA, the industry's primary lobbying group, said the authors are "naive" to claim drug pricing regulations "would not have a devastating impact on research and development," and that "excluding smaller biotech companies from the analysis demonstrates a rudimentary understanding of the drug development process."

2. Exclusive: Apple to remove vaping apps

Photo: Jose Luis Magana/AFP via Getty Images

Apple will remove all 181 vaping-related apps from its mobile App Store this morning, sources tell Axios' Ina Fried and Mike Allen.

  • Why it matters: The move comes after at least 42 people have died from vaping-related lung illness, per the CDC. Most of those people had been using cartridges containing THC, though some exclusively used nicotine cartridges.

Apple said in a statement to Axios: "Recently, experts ranging from the CDC to the American Heart Association have attributed a variety of lung injuries and fatalities to e-cigarette and vaping products, going so far as to call the spread of these devices a public health crisis and a youth epidemic. We agree."

  • Matthew Myers, president of Campaign for Tobacco-Free Kids, said: "Apple is setting a welcome example of corporate responsibility in protecting our kids."
3. Transparency rules coming today

President Trump plans to announce his transparency rules for hospitals and insurers today in a Roosevelt Room event, Politico reported yesterday.

Why it matters: Advocates of requiring hospitals and insurers to disclose negotiated rates say that it'll help patients shop for health care, which could in turn lower prices through enhanced competition.

The other side: Hospitals and insurers hate the proposal and say it could lead to higher costs, as providers receiving lower payments from insurers would then demand higher rates once they find out what their competitors are making.

Flashback: It was only two weeks ago that the administration punted on the hospital transparency rule; today's high-profile event may explain why.

Go deeper: Washington's favorite health policy isn't a silver bullet

4. U.S. cigarette smoking hits all-time low

Cigarette smoking among U.S. adults reached an all-time low in 2018 at nearly 14%, the Centers for Disease Control and Prevention reported yesterday, a decline of roughly 66% over the last 50 years.

Between the lines: Smoking cigarettes remains deadlier than vaping, despite the spotlight on the 2,000-plus cases and dozens of deaths associated with e-cigarette lung injuries this year, Axios' Marisa Fernandez reports.

  • More than 34 million adults continue to smoke, and millions more use other tobacco products, per the study.

Highlights:

  • One in seven adults in the U.S. still smoke cigarettes.
  • Between 2017 and 2018, e-cigarette use rose for the first time in several years, primarily driven by an uptick among young adults. In 2017, 5.2% of 18- to 24-year-olds used e-cigarettes, compared to 7.6% in 2018.
  • Smokeless tobacco use also increased from 2.1% to 2.4% among adults during the same time period.

Go deeper: Big Tobacco is targeting developing nations: report

5. 2020 Democrats' new drug pricing bill

Sens. Bernie Sanders and Cory Booker. Photo: Tom Williams/CQ Roll Call

Sens. Cory Booker, Bernie Sanders and Kamala Harris — who are all running for president — are announcing legislation today that would create an independent agency to determine list prices of prescription drugs.

  • If a drug company doesn't comply with the determined price, the HHS secretary could void the company's exclusivity period and allow other companies to produce the drug.

Why it matters: This is further mainstreaming of Democrats' leftward shift on drug prices.

  • It has become standard for Democratic presidential candidates to support the idea of taking drug companies' patents if their prices are too high. Most of the candidates also support some form of price regulation.
  • While Booker isn't a 2020 frontrunner, he's emblematic of the party's shift: In 2017, he was heavily criticized for voting against a bill allowing the importation of drugs from Canada.
  • Ironically, that bill was sponsored by Sanders and Sen. Amy Klobuchar, who is also running for president.

Go deeper:

6. Apple's new move into health research

Apple yesterday released an app for iPhone and Apple Watch users to participate in three longitudinal health data studies, Marisa reports.

The big picture: Apple is just one of several Silicon Valley companies investing in health tech and transforming the future use of health data. Clinical trials via phone could increase participation rates, compared to traditional in-person studies.

  • Apple addresses privacy concerns by promising not to sell user data and allowing users to pick what they want to share, among other options.
  • Apple is funding the research, while health agencies and educational institutions will study and track the data.

The voluntary studies:

  • Track people's heartbeats to learn early warning signs of atrial fibrillation, heart disease or declining mobility.
  • Track menstrual cycles and how they relate to women's health conditions such as infertility and polycystic ovary syndrome.
  • Collect headphone usage and environmental sound exposure data to track hearing impact over time.

Yes, but, per NYT: Data from iPhone and Apple Watch owners is an unrepresentative sample of society.

Go deeper:

Caitlin Owens