Feb 20, 2019

Axios Vitals

Good morning … When rotten apples freeze, then slide out of their icy molds, you get "ghost apples."

1 big thing: Another tuition-free med school
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Data: AAMC; Chart: Naema Ahmed/Axios

Kaiser Permanente's new School of Medicine will cover all tuition and health insurance costs for each student in its first 5 graduating classes, my colleague Bob Herman reports.

The big picture: This follows the lead set by NYU's medical school. The goal of free med school is to encourage more low-income students to enter medicine, where the average debt for each graduate who borrows is $192,000.

  • There’s also a hope that, without student loans to worry about, more new doctors will enter lower-paying specialties instead of gravitating toward the biggest paychecks.
  • "We don't want debt to influence students' career choices," said Mark Schuster, dean and CEO of Kaiser's medical school. "We would like it so students can follow their heart and go into the work environment that feels right for them."

By the numbers: One year of tuition at Kaiser's medical school, which will have active students by next summer, costs about $55,000. Kaiser's health coverage costs about $6,500 per year.

  • Covering those costs for 4 years for the first 5 classes, each of which will enroll 48 students, means Kaiser will be shelling out roughly $60 million from its own coffers.
  • That's basically a rounding error for Kaiser, which owns health plans, hospitals and doctors' clinics and collected $80 billion of revenue in 2018.

Yes, but: After NYU announced its free tuition last year for all current and future medical students, economists and policymakers warned the move would merely subsidize education costs for an already affluent group.

Go deeper.

2. Ohio is ready to take back PBM money

Ohio Attorney General Dave Yost has formally demanded that OptumRx, one of the country's largest pharmacy benefit managers, pay back $16 million in "overcharges" related to handling drug benefits for a state agency.

Why it matters: This isn't a lot of money in the grand scheme of things, but it's a forceful step that shows states are actively looking to claw back money from a PBM if they think the company is skimming too much profit from the drug pricing process.

Go deeper: States are the new battleground for drug middlemen

3. The unexpected cost of a failed pregnancy

We know childbirth is wildly expensive in the U.S. The Philadelphia Inquirer has a very depressing related story: The cost of a failed pregnancy can also be unexpectedly large, leaving women or couples to sort through and challenge medical bills on top of an enormous emotional loss.

Details: One woman profiled by the Inquirer, Jodi Laughlin, had to have an emergency C-section. Her baby then lived only 32 minutes, due to a buildup of fluid in her body.

  • Laughlin’s insurer, Cigna, initially denied coverage for her C-section and for 2 procedures to drain the baby’s excess fluids. Those procedures were instead billed at $16,500 and $26,450. Cigna said none of those 3 procedures were medically necessary.
  • The family was eventually able to negotiate that down to $4,000. Laughlin’s husband said he initially hid the bills from his wife, given how much she was already going through.
  • Genetic testing revealed that the same outcome was likely if the Laughlins conceived again, so they turned to fertility treatments — at an out-of-pocket cost of $19,000.

Worthy of your time.

4. Study: FDA, drugmakers let opioid misuse slide

From Axios' Caitlin Owens: Federal regulators and fentanyl manufacturers didn't take action when it became clear that highly potent fentanyl products were being inappropriately prescribed to as many as half of the patients taking them, according to a new study in the Journal of the American Medical Association.

How it works: The type of fentanyl in question is approved by the Food and Drug Administration only for adult cancer patents who have already built up a tolerance to less potent opioids.

  • An FDA monitoring program requires that all doctors, pharmacists and patients involved in prescribing, dispensing and using these drugs certify that they understand their proper use.
  • The FDA also requires manufacturers to demonstrate that they are in compliance with the rules.
  • In surveys by drugmakers, most doctors, pharmacists and patients indicated that they understood how these fentanyl drugs were supposed to be used, but some providers were prescribing them for off-label use anyways.

The bottom line: In 2016, drugmakers found that between 34.6% and 55.4% of patients receiving this kind of fentanyl did not have opioid tolerance, meaning the drug was being misused.

  • Despite this information, neither the FDA nor drugmakers took action to end the inappropriate prescribing.
5. Opioids trial set to begin in Oklahoma

From Caitlin: Proceedings in Oklahoma’s case against several major drug companies are scheduled to begin May 28, and could preview how the giant federal case that's pending in Ohio is going to go, The Washington Post reports.

  • 36 states have sued drug companies, and the consolidated case in Ohio includes more than 1,600 plaintiffs.
  • Defendants in the Oklahoma case include Purdue Pharma, Johnson & Johnson, Teva Pharmaceuticals and Actavis. The state could seek more than $1 billion from the companies, either through trial or settlement, sources told WashPost.

Why it matters: If this case does go to trial, it could provide leverage in the cases to follow, including through evidence released to the public.

  • A lawsuit in Massachusetts, for example, has already made public allegations detailing how members of the Sackler family, which owns Purdue, were involved in pushing sales of addictive painkillers to rake in profit.
  • "What happens there is going to set the standard for what happens after it," Abbe R. Gluck, a Yale law professor, told the Post.
6. Beware the blood of youth


In case common sense didn't tell you that infusing yourself with young people's blood will not make you younger or healthier, allow the FDA to provide that warning.

What's new: "We have a lot of public health concerns. This is not an appropriate use of plasma," FDA Commissioner Scott Gottlieb told CNBC in an interview yesterday.

  • "Simply infusing plasma is not a benign intervention and should not be used in such cavalier fashion," he said.
  • The FDA also released an official warning about the practice, which is in some cases being billed as a way to fight the effects of aging.

Ambrosia, one of the startups offering young people's blood in transfusions, recently said it was up and running in 5 U.S. cities, charging $8,000 for a liter of young blood.