Oct 24, 2018

Axios Vitals

Good morning ... Check out this incredible ice sheet in Antarctica. It’s smooth and rectangular like a tabletop. Honestly it looks like a fake image that would spread on Twitter. But it’s real.

1 big thing: New efforts to combat the opioid crisis

President Trump and First Lady Melania Trump, at an opioids event last year. Photo: Alex Wong/Getty Images

The number of overdose deaths in the U.S. “has begun to plateau,” Health and Human Services Secretary Alex Azar said yesterday, in advance of a White House event today at which President Trump will sign Congress' most recent opioids bill into law.

What's new: Preliminary data from the Centers for Disease Control and Prevention shows the death rate holding steady, after years of increases.

  • “Plateauing at such a high level is hardly an opportunity to declare victory,” Azar said. “But the concerted efforts of communities across America are beginning to turn the tide.”

What’s next: The legislation Trump will sign this afternoon includes a couple of important policies, including expanded access to medication-assisted treatment. And health care companies are joining in with announcements of their own.

  • Express Scripts is announcing that it successfully redirected many of its clients toward shorter prescriptions and safer drugs.
  • Emergent BioSolutions will announce that it’s donating doses of naloxone, the overdose-revival drug, to every public library and YMCA in the country, senior White House counselor Kellyanne Conway told Axios earlier this week.

Meanwhile, HHS announced a new initiative yesterday to improve Medicaid treatment for women who are dependent on opioids and are pregnant or have recently given birth.

  • The 5-year model will include up to $64.6 million in grants to states, with the goal of delivering treatment to women who need it and connecting them with other support networks.

Go deeper: The youngest victims of the opioid epidemic

2. Rising health costs hit poor families hardest
Expand chart
Adapted from a JPMorgan Chase Institute report; Chart: Axios Visuals

Americans are spending more money out of pocket every year on health care, and that trend is placing a bigger burden on poorer families than on wealthier ones.

By the numbers: The lowest-income households spend nearly 3% of their take-home pay on health care, compared to about 1% for the wealthiest families, according to new research from the JPMorgan Chase Institute.

  • That gap is widening. The overall growth in the burden of health care costs is modest, overall, but it’s higher for poor families than rich ones.

Rising out-of-pocket spending is driving these trends, per JPMorgan. According to its report, out-of-pocket spending grew by 8.5% last year — the fastest clip in at least 3 years.

Why it matters: Substantial out-of-pocket costs, like high deductibles and coinsurance, are designed to give people more exposure to what their care really costs. And their exposure to those costs does seem to be increasing.

  • There’s just not much evidence that patients are able to become "better customers" as a result.
3. Express Scripts opens up mail-order network

Express Scripts, which negotiates drug prices for 80 million Americans, may be opening the door for any mail-order pharmacy — including Amazon's newly acquired PillPack — to get full access to its large network, my colleague Bob Herman reports this morning.

  • Express Scripts sent a notification this month to pharmacies saying its networks will expand to include "pharmacies predominantly engaged in mail-order practice" by the first quarter of 2019.

Between the lines: Express Scripts, a dominant pharmacy benefit manager that is getting gobbled up by Cigna, owns a massive mail-order drug business that represents almost half of its revenue.

  • The company has been criticized (and sued) for steering patients toward itself, by excluding other pharmacies that deliver drugs to people's homes.

The big question: What's included in the company's contracts with mail-order pharmacies?

  • "If a pharmacy decides not to participate due to the terms and conditions imposed by Express Scripts, this avoids the perception that Express Scripts is blocking or kicking out mail-order pharmacies from their network," said Stephen Buck, a pharmaceutical industry expert.
4. 10 million people may use expanded HRAs

Federal regulators expect that roughly 10 million people will ultimately buy insurance on their own, but with help from their employer.

Driving the news: As we previewed in yesterday’s Vitals, the administration is making that kind of coverage easier by expanding Health Reimbursement Arrangements, or HRAs.

  • Employers put money into those accounts, tax-free, to help their workers cover health care expenses.
  • Employers usually offer an HRA on top of their health care plan. But the administration wants to let people use those funds to pay the premiums on an individual policy — meaning employers wouldn’t necessarily have to offer their own health care plans.

By the numbers: By 2024, more than 10 million people each year will be using an HRA contribution to buy individual coverage, according to estimates in the proposed regulations.

  • Roughly 7 million otherwise would have had employer-sponsored coverage, and about 3 million otherwise would have had an individual policy without help from an employer.

What we're watching: At least for now, the proposal says HRAs can’t be used to purchase the bare-bones, “short-term” insurance plans the administration recently expanded. But they’re asking for public comments on whether that’s the correct answer.

5. Drug prices drive political spending

The controversy over prescription drug prices has touched off a spending spree for campaign ads, advocacy and lobbying.

Shot: Through its super PAC, the advocacy group Patients For Affordable Drugs has spent $10 million on the midterm elections.

  • It has run ads against both Democrats and Republicans whom it believes are beholden to the drug industry, and supported members of both parties who have criticized pharma.

Chaser: PhRMA, the industry’s leading trade organization, “has already spent $21 million on lobbying this year — a sum that puts it on course to smash its previous annual lobbying records," STAT reports.

  • That’s just PhRMA, and it’s just lobbying. It doesn’t include individual companies’ lobbying activity, and it doesn’t include any of the industry’s political contributions or advocacy ads.