Today's News and Commentary

About pharma

Whistleblowers: Company at heart of 97 000 percent drug price hike bribed doctors to boost sales: Companies that dramatically raise prices can’t always succeed on their own. This article highlights a whistleblower’s claim that Mallinckrodt's Questcor Pharmaceuticals unit bribed doctors and their staffs to increase sales of HP Acthar Gel- used to treat a rare infant seizure disorder. The price was hiked to $39,000.

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FDA requires stronger warnings about rare but serious incidents related to certain prescription insomnia medicines: The FDA will require boxed warnings (its strongest caution) for eszopiclone (Lunesta), zaleplon (Sonata) and zolpidem (Ambien, Ambien CR, Edluar, Intermezzo, and Zolpimist). The reason for this change is “several reports of rare, but serious injuries and deaths resulting from various complex sleep behaviors after taking these medicines. These complex sleep behaviors may include sleepwalking, sleep driving and engaging in other activities while not fully awake, such as unsafely using a stove.” I do not expect much change in prescribing of these medications since the side effects have been known for quite awhile. Also, stock prices of the companies should not be affected- Ambien and Sonata are available with generics and Lunesta’s parent corporation Sumitomo Dainippon Pharma Co. Ltd.has not dipped after the announcement

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Oklahoma high court nullifies medical abortion restrictions: Following the Kansas Supreme Court decision allowing abortion as a human right under its constitution, another “middle America” state’s high court ruled that “a state law restricting access to drug-induced abortions is unconstitutional.” This example is another instance of state action that may challenge federal initiatives on this issue.

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Maryland Takes Step Toward Capping Drug Prices: A bill waiting for the governor’s signature would create a panel to review drug prices for governmental entities and set caps if needed. Other states, like California, have only required advance notification of price hikes.

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House Judiciary Unanimously Passes Bipartisan Bills to Lower Prescription Drug Prices: Meanwhile, at the federal level, the House Judiciary Committee passed four bipartisan bills to lower prescription drug prices. Measures in these bills include strengthening the Federal Trade Commission’s (FTC) “ability to challenge anticompetitive pay-for-delay agreements in court;” prohibiting big pharmaceutical companies “from engaging in anti-competitive conduct to prevent generic versions of prescription drugs from entering the marketplace;” curbing “the abuse of the Food and Drug Administration (FDA) citizen petition process and expand access to prescription drugs by reducing incentives for branded pharmaceutical companies to interfere with the regulatory approval of generics and biosimilars that compete with their own products;” and requiring that “the Federal Trade Commission (FTC) conduct a study on the state of competition in the drug supply chain. This study would focus on whether pharmacy benefit managers, or PBMs, have engaged in any anti-competitive practices, such as steering patients to pharmacies for anti-competitive purposes, giving such pharmacies more favorable rates than it offers to competing pharmacies, or using its market power to depress the use of lower-cost prescription drugs.”

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US drugmakers buoyed by growth in China and new products: This article documents how much Chinese sales (and to some degree sales in developing nations) are significantly contributing to US drug manufacturers’ profitability.

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Payment policy for prescription drugs under Medicare Part B and Part D: James Mathews, Ph.D., executive director of the Medicare Payment Advisory Commission (MedPAC) testified yesterday before the House Subcommittee on Health of the Committee on Energy and Commerce about MedPAC’s recommendations to control drug spending. This written testimony starts with a really good summery of how Medicare Parts B and D pay for drugs. See Figure 1 for the evolution (and display of complexity) of the Part D actuarial formula. He then discusses rising costs for both parts. If you already know these facts, start on page 17 with the recommendations. Among the recommendations are:

For Part B: Reducing the payment rate from 106 percent to 103 percent of wholesale acquisition cost for new single-source Part B drugs that initially lack Average Sales Price (ASP) data and for existing drugs that lack ASP data; requiring manufacturers to pay the Medicare program a rebate when the ASP for a drug grows at a rate in excess of an inflation benchmark; and grouping an originator biologic and its biosimilars into the same billing code to maximize price competition.

For Part D: Giving sponsors greater flexibility to use formulary tools, like removing protected status from two of the six drug classes in which plan sponsors must now cover all drugs on their formularies (antidepressants and immunosuppressants for transplant rejection), streamlining the process for formulary changes, requiring prescribers to provide supporting justifications with more clinical rigor when applying for exceptions, and permitting plan sponsors to use selected tools to manage specialty drug use; excluding manufacturer discounts on brand-name drugs from counting as enrollees’ true out of pocket spending (for meeting deductible and annuals maximums); and reducing government reinsurance while increasing capitated payments.

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About healthcare IT

Epic, Cerner growing EHR market share with increased hospital consolidation: KLAS: “Among hospitals with 500 or more beds, Epic has a 58% market share and Cerner now has 27% of the market.” What is interesting about the growth in market share is that much of it has come through mergers an acquisitions among customers.

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How FHIR 4 will drive interoperability progress in healthcare: While not really news, this article is a nice summary of where the industry is with respect to FHIR and interoperability. It does get a bit technical for those not familiar with IT terminology.

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As Artificial Intelligence Moves Into Medicine, The Human Touch Could Be A Casualty: An interesting article from NPR that looks at the interface between humans and Artificial Intelligence with respect to patient care.

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About health insurance

Trump urges Dem senator to revive bipartisan ObamaCare talks: This story is really strange. At a White House meeting yesterday, President Trump encouraged Senator Patty Murray (D-Wash) to resume her efforts to get bipartisan support to fix the ACA. In 2017 and 2018 she worked with Senator Lamar Alexander (R-Tenn) to craft a compromise proposal. According to the story: “Murray replied that she had been told the White House would veto the measure. Trump replied that he never said that and encouraged Murray and Alexander to resume their efforts, a Democratic source said.” I am not sure how this request fits into the “repeal and replace before 2020” strategy the President previously announced.

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