May 28, 2019
Good morning, and I hope you enjoyed the long weekend.
📷 Season 2 of "AXIOS" on HBO premieres at 6pm ET/PT on Sunday, June 2 on HBO platforms.
- Check out the Season 2 trailer here.
Today's newsletter is 861 words — <4 minutes of your time.
1 big thing: Transparency isn't a silver bullet
Adding more transparency to the health care system's secretive pricing structure is a bipartisan idea that's gotten a lot of interest in Congress and from the Trump administration.
Yes, but: Some experts say transparency alone probably won't do much to lower costs, and could even end up backfiring.
Driving the news: The Trump administration is expected to soon release an executive order mandating the disclosure of health care prices, the Wall Street Journal reported Friday.
- A new bipartisan Senate bill on health costs also includes several transparency measures.
What they're saying: Critics argue that the industry's secretive pricing practices support its own bottom line at patients' expense, and causes wild discrepancies in what the same service costs in different places.
The other side: More transparency could still end up being relatively useless for patients, experts said.
- There's evidence that patients don't use the tools already available to them to shop around. And even the prices that providers have negotiated with insurers — which are valuable trade secrets for both industries — don't tell patients their actual costs.
Transparency could even lead to higher prices, as providers see what their competitors are getting.
- "Knowing what concessions everyone is getting or giving can often mean that the low price in the market serves as a floor, rather than a ceiling, in future negotiations and that leads to higher prices over the long term," Avalere's Chris Sloan said.
The bottom line: At the least, more pricing information could help empower future policymakers.
- "You're going to see this jagged mountain range of pricing in the private sector, and it’s going to be pretty darn hard for people to justify it," said John Bardis, a former Trump administration health official.
2. The Oklahoma opioids trial starts today
The Oklahoma attorney general announced an $85 million settlement with Teva Pharmaceuticals over the weekend. Purdue Pharma got out of the Oklahoma opioids case by agreeing to a $270 million settlement in March.
- That leaves Johnson & Johnson defending itself in court versus Attorney General Mike Hunter, who believes the drug company created a "public nuisance" through the false marketing of their painkillers, my colleague Bob Herman reports.
Why it matters: Oklahoma is seeking $17 billion in damages over a crisis that has killed thousands of Americans, and if the state wins, it spells trouble of historic proportions for all of the various companies that are part of the consolidated national lawsuit in Ohio.
Who we're watching: Judge Thad Balkman, who will rule on the case after hearing 8 weeks of arguments.
- J&J denies wrongdoing and believe Oklahoma’s sole "public nuisance" claim is baseless.
3. The most expensive drug in the world
The FDA on Friday approved Zolgensma, a gene replacement therapy from Novartis that treats spinal muscular atrophy, for use in children younger than 2, Bob writes.
Why it matters: The treatment attacks a debilitating genetic disease that often kills infants, and it will come with a price tag of more than $2.1 million, making Zolgensma the most expensive drug on the planet.
Details: Novartis said it will allow health insurance companies to pay the $2.1 million, which does not factor in potential rebates or discounts, over 5 years.
- That puts Zolgensma's annual list price at $425,000, which Novartis said is less expensive than Spinraza, a competing therapy for spinal muscular atrophy made by Biogen.
Between the lines: The Institute for Clinical and Economic Review, a group that evaluates drug pricing and effectiveness, said in a statement that an appropriate all-in price range for Zolgensma would be between $1.1 million and $1.9 million — below what Novartis set.
- Other ICER estimates say the price should be even lower, between $310,000 and $900,000.
- Novartis acquired AveXis, the biotech firm that developed this gene therapy, for $8.7 billion last year, so investors want a return for that investment.
The bottom line: Zolgensma is emblematic of the new scientific advances that treat people with crippling diseases and of the debate society will have over how it should pay for these types of therapies.
Go deeper: The drug pricing debate is stuck in the past
4. Measles continues to spread
Since the start of 2019, the U.S. recorded 940 measles cases in 26 states, the Centers for Disease Control and Prevention said Monday.
What's new: In an effort to halt the spread of the extremely contagious disease, the CDC recently threatened to use its Do Not Board list on 8 infected people, as first reported by the Washington Post and confirmed by my colleague Eileen Drage O'Reilly.
- The move successfully dissuaded them from boarding their scheduled flights.
- As the summer season starts with increased travel via airports plus attendance at amusement parks and summer camps, public health officials are concerned that this outbreak will continue spreading.
- CDC says a key focus is to fight misinformation campaigns by anti-vaccination groups.
5. While you were weekending
- AstraZeneca is starting to target new drugs at the early stages of cancer, a contrast from the typical strategy of developing drugs to treat patients with advanced stages of the disease, WSJ reports.
- Juul is struggling to recruit scientists to do the research it needs to receive FDA approval, and to prove that its public health benefits outweigh the risks, the NYT reports.
- Summer camps are turning away unvaccinated children, Axios reported.
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