Latest Drugwonks' Blog
Congressman John Conyers just introduced a bill that, if passed, would create government-run health care here in the United States. This same proposal for a "single-payer" system has been put forth in every Congress since 2003, and like all of those previous bills, Conyers’ legislation is destined to die an unceremonious death.
Almost simultaneously, Senator Richard Durbin (D-Ill.) and Rep. Jan Schakowsky (D-Ill.) introduced into the U.S. Senate and House of Representatives versions of a bill that would require the HHS secretary to negotiate Medicare Part D drug prices with pharmaceutical manufacturers. The Medicare Prescription Drug Savings and Choice Act of 2013 would offer one or more Medicare-administered prescription drug plans to compete with the privately administered prescription drug plans currently offered under Medicare Part D. Durbin and Schakowsky have introduced versions of the bill in Congress at least three times since Part D came into effect in 2006.
But just because such brazen attempts at socialized medicine are doomed to fail doesn’t mean the threat of government-run healthcare isn’t real. In fact, the current push to allow federal price controls in the Medicare drug benefit, Part D, is a first step towards a single-payer system.
While Medicare as a whole is a fiscal basket case -- due to run out of money in 2024 -- Part D has been the very model of a well functioning federal program since its implementation in 2006.
The Congressional Budget Office (CBO) found that, between 2004 and 2013, Part D will cost an extraordinary 45 percent below what was initially estimated. Premiums for the program, meanwhile, are roughly half of the government’s original projections. Part D enrollees pay, on average, $30 a month -- a rate that has remained essentially unchanged for years.
It’s no wonder that beneficiaries are so pleased with the program. In fact, 96 percent of those enrolled in Part D say that their coverage works well.
These unprecedented results are largely due to Part D’s market-based structure. Beneficiaries are free to choose from a slate of private drug coverage plans, forcing insurers to compete to offer the best options to American seniors. It’s hardly surprising that the program has led to low prices and satisfied customers.
Of course, anywhere there are market principles at work creating value for consumers, there are liberals eager to meddle -- and Part D is no exception. First, President Obama promised to dismantle Part D in the State of the Union with his proposal to “reduce taxpayer subsidies to prescription drug companies.” This was his coded way of saying that he intends to ruin one of the best market-based government programs in history.
And now, Minnesota Senator Amy Klobuchar has introduced a bill that makes good on the president’s promise. The legislation would allow the Department of Health and Human Services to negotiate directly with drug companies in order to set prices under Part D. The bill would repeal Part D's “non-interference clause” that was included in the law specifically to stop HHS from distorting the market by strong-arming drug companies.
It’s hard to see Klobuchar’s bill as anything but a federal power grab. Unhappy that a single-payer system is a political loser, the president and his fellow liberals are content to takeover the health sector one reform at a time. After all, despite the Democrats’ false promises of cost-savings, there’s no reason to revoke the non-interference clause.
Through their own negotiations with drugmakers, private insurance plans that operate under Part D have already had great success in keeping pharmaceutical prices down. In fact, the CBO has observed that Part D plans have “secured rebates somewhat larger than the average rebates observed in commercial health plans.”
What’s more, the CBO has said time and again that doing away with the non-interference clause “would have a negligible effect on federal spending.” In a report from 2009, they reiterated this view, explaining that such a reform would “have little, if any, effect on [drug] prices.”
In fact, allowing the feds to negotiate drug prices under Part D would likely have a negative effect on the program. The CBO predicts that, when HHS forces pharmaceutical firms to lower the cost of a particular drug, this tactic brings with it “the threat of not allowing that drug to be prescribed.”
In other words, Democrats want to take a program that provides affordable medicine for millions of seniors, and reform it in a way that limits drug access without saving money or addressing any of the systemic problems that afflict Medicare.
As Mr. Conyers’ bill demonstrates, Democrats will never succeed in creating a single-payer system by passing one, all-encompassing bill. Instead, liberals in Washington will have to take over the health sector bit by bit. The push to impose Part D price controls is the latest attempt to grab a little more power for the federal government. Those who support a healthcare system that benefits from choice and competition have a lot to be concerned about.
You’re more likely to get a doctor’s appointment in Canada if you’re rich than if you’re poor, even though the government pays the bills, according to a new study.
In the spring and summer of 2011, a team of Canadian researchers posing as prospective patients cold-called 375 doctors offices in Ontario to schedule a check-up.
The researchers posed in each call as one of four types: a wealthy banker in good health, a wealthy banker with diabetes and back problems, a welfare recipient in good health, or a welfare recipient with diabetes and back problems.
Overall, the callers were 50% more likely to be offered an appointment when they posed as bankers than when they posed as welfare recipients.
Canada has universal healthcare, and the researchers said they studied Ontario in particular because it has a single public insurer, and patient pay no copayments or deductibles for visiting a physician. In theory, therefore, general physicians in Ontario and their staffs would have no financial incentive to choose a rich patient over a poor one, according to the study, conducted by doctors at the Keenan Research Centre at the Li Ka Shing Knowledge Institute at St. Michael’s Hospital in Toronto.
Read the full piece here.
But I think in general states are going to have to accept the federal dollars to expand Medicaid. It is the law of the land for better or worse and to say no to tax dollars that already being collected and not use them is a waste at any level.
Is this how entitlements are created? You bet. Will Medicaid be faced with cost overruns and shortages of care and other bad stuff? No doubt. I could write the articles now and just add the numbers in later. It will be up to those of us who would rather see a more rational market for medicine to change how dollars are spent. To tell governors NOT to use Medicaid money to expand healthcare is like telling students not to get student loans for college. Few of us have the income to match the courage of that conviction. And any politician who does not take money to cover a new benefit is probably a politician that will not be re-elected. People forget that Reagan expanded Medicaid coverage in California.
From here on in -- or until there is one party Republican government -- Obamacare will be the law of the land. The binary decision has been made. The issues are no longer a matter of yes or no as much as they are "how much?" and "how?"
That's governing. As James Madison wrote in the Federalist Papers: "in framing a government which is to be administered by men over men, the great difficulty lies in this: you must first enable the government to control the governed; and in the next place oblige it to control itself."
Somethings never change.
This quote from an unnamed administrtation source in the New York Times says it all: “There is no general mandate under Medicaid to reimburse providers for all or substantially all of their costs,” the administration said. Substantially. As in ten cents on the dollar. Maybe. Anyone out there willing to increase their business by charging 75-90 percent less?
States Can Cut Back on Medicaid Payments, Administration Says
By ROBERT PEAR
Published: February 25, 2013
WASHINGTON — The Obama administration said Monday that states could cut Medicaid payments to many doctors and other health care providers to hold down costs in the program, which insures 60 million low-income people and will soon cover many more under the new health care law.
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Manuel Balce Ceneta/Associated Press
Gov. Jerry Brown of California, center, on Monday during a National Governors Association meeting in Washington.
The administration’s position, set forth in a federal appeals court in California, has broad national implications as it comes as the White House is trying to persuade states to expand Medicaid as part of the new law.
The statement of federal policy infuriated health care providers and advocates for low-income people. But it may encourage wavering Republican governors to go along with the expansion because it gives them a tool to help control costs.
Byron J. Gross, a lawyer at the National Health Law Program, an advocacy group for low-income people, said: “The federal government is trying to bend over backward to show flexibility and accommodate states as much as it can. California is an example of that.”
In a brief filed with the United States Court of Appeals for the Ninth Circuit, in San Francisco, federal officials defended a decision by California to cut Medicaid payments to many providers by 10 percent.
Kathleen Sebelius, the secretary of health and human services, approved the cuts in October 2011 after finding that beneficiaries would still have “adequate access” to the wide range of services covered by Medicaid.
The Obama administration urged judges to uphold those cuts, which are being challenged by patients, doctors, dentists, hospitals, pharmacists and other health care providers in California.
AARP, the lobby for older Americans, joined the health law advocacy group and more than a dozen consumer groups in opposing the cuts, which they said would reduce access to care for millions of current and future beneficiaries.
In an interview, Gov. Jerry Brown of California, a Democrat, said the Medicaid cuts were essential to his efforts to dig the state out of a budget hole.
“California has a great record of providing more benefits, expanding to more people, doing more of everything,” said Mr. Brown, who was here for the winter meeting of the National Governors Association. “But I believe in balancing our budget, living within our means.”
“We like the president’s commitment to extend health care to as many Americans as possible, and we can be powerful partners,” Mr. Brown said. “But we need more authority than we now have. I want to emphasize that — more authority than we have now to manage the Affordable Care Act and the expansion of Medicaid.”
Medicaid is one of the fastest-growing items in state budgets. Cutting payment rates saves money for states and for the federal government, which will pay most of the costs for people who become eligible for Medicaid under the new law.
Health care providers said California’s payment rates were inadequate even before the cuts. They pointed to a federal study that said, “California stands out because of its very low Medicaid payment levels.”
In an interview, Dr. Paul R. Phinney, president of the California Medical Association, a plaintiff in one of the court cases, said: “Two-thirds of doctors in California cannot afford to participate in Medicaid because the rates are so low. The problem will only get worse if rates are cut as we move more and more people into Medicaid.”
The cuts were supposed to take effect in 2011 but have been held up, pending the outcome of litigation.
Health care providers said California was cutting Medicaid payment rates for “purely budgetary reasons.”
In court papers, the Obama administration said, “It is entirely appropriate for a state to review its Medicaid plan to determine whether it can continue to satisfy its statutory obligations at lower payment rates.” Indeed, the administration said, states should conduct such reviews “to avoid the perpetuation of payment rates that are unnecessarily high.”
Federal law says Medicaid rates must be “sufficient to enlist enough providers” so that Medicaid beneficiaries have access to care at least to the same extent as the general population in the same geographic area.
The Obama administration said California officials had agreed to monitor beneficiaries’ access to care and to “take prompt action if any problems are indicated.”
Moreover, the administration said, Congress gave states “wide discretion” to set Medicaid rates, and courts should not second-guess decisions by Secretary Sebelius on the adequacy of rates.
“There is no general mandate under Medicaid to reimburse providers for all or substantially all of their costs,” the administration said.
Is the concept of “limited use” approvals falling victim to concerns that the could become a tool for the agency to narrow approved indications and to bar off-label prescribing.”
Janet Woodcock calls it like she sees it, “Given that there is skepticism and controversy, to pick an area where there is a compelling need might be a reasonable thing to do.”
It seems likely that limited use will be limited (at least initially) to anti-infective drugs.
As BioCentury points out, “Restricting the pathway to anti-infectives would allow FDA to address a public health crisis and test drive the concept, but would disappoint patient advocacy organizations and emerging biotech companies that hope the regulatory tool could speed development and approval of new drugs for a variety of conditions.”
And the pathway would be voluntary. Woodcock, “The pathway would be voluntary,” said Woodcock, and would be used to help companies tailor highly streamlined development programs to meet urgent public health needs.
The basic concept is for FDA to allow extremely streamlined development programs for drugs for well-defined subpopulations for which benefits clearly outweigh risks, and to couple expedited approvals with measures intended to discourage inappropriate off-label prescribing.
What measures? And through what authority? BioCentury opines that, “The lack of specifics and distrust of the agency’s intentions have led some critics to assume FDA is seeking a broad expansion of its power over the practice of medicine, and others to accuse the agency of plotting to allow dangerous under-tested drugs on the market.”
There is little controversy about approving drugs based on relatively small studies that demonstrate high levels of efficacy in tightly targeted populations. But FDA’s suggestion that it could work with physicians and payers to limit use of a marketed drug in the absence of documented safety concerns is controversial.
Since the FDA is being attacked from almost every side -- it’s likely they are doing something right.
And anti-infectives are a good place to start.
The Washington Post reports that David G. Miller, executive vice president of the International Academy of Compounding Pharmacists, "said he will support legislation requiring pharmacies that operate like drug manufacturers to register with the Food and Drug Administration and be subject to stricter standards enforced by the agency." The Post notes, "Miller and his 2,700-member group have traditionally argued that all pharmacies should fall under the purview of state pharmacy boards, not the FDA, and fought efforts in 2007 to shift primary oversight from the states to the federal government. On Thursday, Miller said he now wants to see FDA registration for what he describes as compounding manufacturers and supports giving the agency the power to enforce safety standards for these firms."
HHS issued a final rule on Wednesday that includes language that will increase the number of drugs eligible for reimbursement by insurers under the Affordable Care Act's essential health benefits requirements. Under the final rule, insurers must cover at least one drug per therapeutic area or the same number of drugs in each category and class as specified in the state benchmark plan, whichever is greater. The rule also states that a health plan "must have procedures in place that allow an enrollee to request and gain access to clinically appropriate drugs not covered by the health plan." The language on coverage requirements for drugs is virtually identical to that included in the proposed rule in November.
In response to comments expressing concerns about the cost of the requirement, HHS said it believes the policy "reflects drug coverage in a typical employer plan and will have a negligible effect on premiums." The agency added that the policy will be a "transition" for the first two plan or policy years starting in 2014 -- when ACA is slated to come into effect -- and that it "will study and take into considerations the effects this policy, if any, have on changing typical drug coverage in the market."
If we want to change our national healthcare paradigm we must also change the way people learn, discuss and address healthcare issues. And that means social media.
Attention Pharmaceutical Industry: If you’re not at the table, you’re on the menu.
If you can't measure it, then it doesn't count.
The FDA plans to draft guidances on how companies should create goals for a REMS and on the other metrics needed to determine if those goals are successfully met and a guidance on methodologies for assessing REMS. (FDA agreed in the PDUFA V commitment letter to issue a draft assessment guidance by the end of September 2014.)
An OIG review of 49 REMS, and the FDA’s reviews of those assessments states the obvious, “If FDA does not have comprehensive data to monitor the performance of REMS, it cannot ensure that the public is provided maximum protection from a drug’s known or potential risks.”
But sometimes the obvious is important to state.
According to the Pink Sheet, “FDA currently possesses no way to force sponsors to provide the needed assessment data, so OIG recommends the agency seek enforcement authority from Congress. FDA agreed that this recommendation should be pursued if an opportunity arises. That opportunity could be the reauthorization of the Animal Drug User Fee Act, which is eyed as a means to gain approval of a track and trace system.”
We’ll see if that dog hunts.
When it comes to social media, the FDA wants companies to do what’s in the best interest of the physician and the patient (really!). But there’s an unfortunate disconnect – the regulatory go-forward proposition of many companies is to avoid any regulatory ambiguity. The result is a vast regulated healthcare speech wasteland. Alas, when it comes to social media, “in compliance” and “in the best interest of the public health” are often viewed as mutually exclusive.
Center for Medicine in the Public Interest is a nonprofit, non-partisan organization promoting innovative solutions that advance medical progress, reduce health disparities, extend life and make health care more affordable, preventive and patient-centered. CMPI also provides the public, policymakers and the media a reliable source of independent scientific analysis on issues ranging from personalized medicine, food and drug safety, health care reform and comparative effectiveness.
