March 06, 2019
Good morning ... ICYMI, the FDA yesterday approved the first new depression treatment in years, a nasal spray aimed specifically at patients whose severe depression has resisted other treatments. Could be a very big deal for a whole lot of people.
D.C. readers: You're invited to Mind the Skills Gap tomorrow at 8 am. Join Axios' Kim Hart for a look into the role policy, business and education leaders play in offsetting the skills gap.
1 big thing: So long, Scott Gottlieb
You’d be hard-pressed to find many Trump administration officials with a better reputation, on both sides of the aisle, than Scott Gottlieb. But now he’s leaving.
The big picture: Gottlieb has been an incredibly consequential FDA commissioner. He's not without his critics — no one is — but he's about as close as you can get, especially in this administration.
Gottlieb's campaign against flavored tobacco products will be the main headline from his tenure at the FDA, and it's by far the biggest controversy he has courted. It was also one of those regulatory agendas only a conservative could set, and won praise from public-health advocates.
- The public health community also praised Gottlieb, earlier in his tenure, for using both regulatory tools and rhetoric to embrace medication-assisted therapy for people addicted to opioids. Breaking the stigma around replacement therapies like methadone has been a long-standing priority.
- And he leaned into the FDA's ability to help spur a more competitive marketplace for drugs, largely through generics. He maintained the agency's effort to clear away a backlog of generic drugs awaiting approval decisions and also prioritized complex generics, like a new EpiPen.
- His reputation as a competent, no-nonsense regulator, combined with near-constant outreach, made Gottlieb popular, even with Democrats who were sometimes surprised they liked him.
- Flashback from last February: Everybody likes Scott Gottlieb
The other side: Some conservative activists thought he went too far on vaping, and he was never popular with liberal advocacy groups like Public Citizen, who saw him — and who see the FDA generally — as overly friendly to industry.
What we're watching: Tobacco stocks were up and biotech stocks were down after news of Gottlieb's resignation broke.
- Gottlieb presented his vaping proposal to the White House just last week, so even though he's sticking around for about another month, the vaping industry will have more opportunities to soften or kill his plans once Gottlieb leaves.
2. Bill would ax PBM rebates in private market
The Trump administration has taken aim at pharmacy rebates in Medicare and Medicaid, and now Republican Sen. Mike Braun wants to extend those proposed limits into the private market.
Details: Braun's bill would require PBMs to ditch the complex rebates they now use to provide discounted drugs for people with insurance.
- They'd have to move to a model of flat fees and pass all discounts on to patients at the pharmacy counter.
- Today, rebates are usually held back and used to reduce premiums.
Why it matters: Extending the administration's rebate ban into the private market is one of PBMs' greatest fears and one of pharma's greatest wishes.
- If the administration's plan is finalized and a bill like Braun's becomes law, we'd be looking at a pretty major restructuring of the drug supply chain — and at least this part would cut overwhelming in the drug industry's favor.
3. Stand-alone ERs are crazy expensive
Freestanding emergency departments, which provide emergency medical care but are physically separate from hospitals, charge many times more than other providers for the same care, according to a new analysis by UnitedHealth Group.
- (Standard disclaimers apply: Yes, the nation's biggest insurer has some skin in the game here on ER costs. But there's also plenty of other evidence that ER costs are indeed very high.)
How it works: Freestanding ERs often don't provide treatment for common emergencies like trauma, strokes and heart attacks, per my colleague Caitlin Owens.
- Only 2.3% of visits to freestanding emergency departments are for actual emergency care.
- The number of these facilities increased from 222 in 2008 to 566 in 2016.
- In Texas, the average cost of treating common conditions at a freestanding emergency department is 22 times greater than treatment at a doctor's office, and 19 times more than at an urgent care center.
- If the location of care was changed to one of these cheaper alternatives, it'd save more than $3,000 per visit.
- Freestanding emergency departments are disproportionately located in affluent areas that have access to other providers, and in Texas, less than one in four receive ambulances.
The bottom line: It is much, much cheaper to go see your family doctor if you have a fever — the most common diagnosis at Texas freestanding emergency departments.
4. Deaths of despair hit a record
It's not just drug overdoses: Deaths from suicide and alcohol are also on the rise. Combined, more than 150,000 Americans died from those 3 causes in 2017 — more than ever before, Axios' Stef Kight reports.
What's next: The Trust for America's Health and Well Being Trust, which put together those figures, project that drugs, alcohol and suicide are on track to kill 1.6 million Americans by 2025.
- Life expectancy has already fallen in the U.S. for 3 years in a row, largely due to these trends, while the global average life expectancy continues to rise.
- Montana had the highest rate in suicide in 2017 at 29.6 deaths per 100,000.
- West Virginia — which was hard hit by the opioid crisis — had the highest rate of drug-related deaths at 56.3 of every 100,000.
- New Mexico had the highest alcohol-related death rate at 31.6 out of every 100,000.
There's hope: Stef also notes that today's teens aren't drinking, dealing drugs or having sex nearly as much as their parents' generation. Probably for the best.
5. 1 💰 thing: HCA executives' pay
$109 million: The amount R. Milton Johnson made in 2018, his final year as CEO of HCA Healthcare before retiring, according to a new company SEC filing.
- That amount represents actual stock gains, and he has another $50 million waiting in retirement, Axios' Bob Herman notes.
$43.5 million: The amount Johnson’s successor, Samuel Hazen, made last year as HCA’s second-in-command.
Go deeper: The GOP tax law led to more than $500 million in tax savings for the HCA hospital chain.