Latest Drugwonks' Blog
The federal government is sucking cash out of it's "clients and counterparties" -- state Medicaid programs, providers, etc. to pay for Obamacare leaving near term shortfalls in their wake.
For instance:
State officials told Kaiser Health News earlier this week that they have already negotiated many drug discounts that exceed 15.1 percent so they will lose that money under the new federal rules. Some said millions of dollars could be on the line for individual states, but federal officials said they have not estimated the cost to states.
State officials had hoped the federal government would interpret the law in a way that left their discounts untouched. But in a letter Thursday to state Medicaid officials, the federal Centers for Medicare and Medicaid Services explained, "The amount of the savings resulting from the increases in the rebate percentages … will be remitted to the Federal government."
Cindy Mann, the agency’s director for the Center for Medicaid and State Operations , confirmed in an interview that meant states that already received drugmaker rebates between 15.1 and 23.1 percent would no longer be able to keep that portion of their savings. States and the federal government would continue to share in savings for the portion of the rebates both below and above that range. Many states already have average rebates well above 23 percent.
Mann suggested that state officials could negotiate deeper discounts with drugmakers to try to "recapture that dollar."
In otherwords, you are on your own.
In turn, the federal government will use that cash to finance small business tax credits -- that evaporate in 6 years -- for insurance coverage that, because of the legislation -- was estimated by CBO be 13 percent higher. So Obamacare is draining Medicaid to pay for tax credits to reduce the increased cost of healthcare insurance triggered by the bill:
"The credits are available in full to firms with 10 or fewer employees who offer an average wage of $25,000 or less. The credit is reduced for employers who have as many as 25 employees and average wages of up to $50,000 annually. Employers with more employees or higher average wages don't get the credit at all.
In addition, the credits are only available for six years, further complicating long-term efforts to help small businesses afford providing health insurance for their employees, said Amanda Austin, director of federal public policy for the NFIB, which opposed the Democrats’ health reform efforts and the new law.
The tax credit is emerging as a flashpoint in the ongoing debate about how the reform will affect costs and insurance affordability.
Austin, who spoke Monday at a U.S. Chamber of Commerce forum on what health reform may mean for businesses, said that although some small businesses’ efforts to provide their employees with coverage might be helped by the tax credit, businesses don't want to continue to return to Congress every few years to ask for the program to be extended.
"What we want is the market to drop its costs down long term," she said, adding that individual and small group markets for health insurance could see premiums increase by as much as 13 percent in the coming years. In the meantime, she and others are spending a lot of time waiting to see what the Department of Health and Human Services will do as the rulemaking process for the health law begins to gain momentum."
www.kaiserhealthnews.org/Stories/2010/April/27/small-businesses-health-tax-credit.aspx
Meanwhile, the Obama administration and HHS Secretary Sebilius are disavowing the estimates of Medicare actuary showing a financial meltdown of Obamacare in the decade ahead, with same estimates showing a collapse of healthcare service delivery in Medicaid -- where most people receiving "insurance coverage" will go... At the same time, the bill provides incentives for people to wait until they are sick instead of obtaining coverage, driving costs up. As the report states: “existing providers resources and could lead to price increases, cost-shifting, and/or changes in providers’ willingness to treat patients with low-reimbursement health coverage.”
tinyurl.com/24pgepa
What did Goldman Sachs call the less than healthy assets it was trying to sell? Something about Obamacare's financing of healthcare has the same smell.
Six percent.
As in eating 232 calories compared to 247. Fifteen calories if my math is correct.
Morever, the "impact the effect of calorie posting is actually to increase Starbucks revenue. "
That means either more people showing up or people visting more frequently. Eating more perhaps.
I bring this up in the context of the FDA's war on salt, which comes on the heels of yet another less than rigorous report issued by the Institute of Medicine...
Dr. Michael Alderman, a hypertension specialist at Albert Einstein College of Medicine, has been quoted lately in many papers covering the recently vamped-up war on salt. Alderman said a randomized clinical trail is needed to determine the effect of reducing sodium intake on the length and quality of life. At this point, he says, there’s no proof that it couldn’t be detrimental.
conflicting effects.”
www.pizzamarketplace.com/article.php
Moreover, we don't exactly know what role salt plays in regulating food or calorie intake.
UC Davis nutrition professor Judith Stern and three colleagues last November published a study in the Clinical Journal of the American Society of Nephrology that questions that "scientific logic and feasibility" of limiting sodium consumption.
Stern, along with UC Davis adjunct professor David McCarron, reviewed data from a range of worldwide studies and examined neuroscience research and found that a body naturally regulates salt intake "within a narrowly defined physiological range."
Stern goes on to note: "If a 'normal' range of sodium intake exists that is consistent with the optimal function of established peripheral and central nervous system mechanisms, that fact should be the sole basis of national nutrition guidelines for dietary sodium intake," Stern's study said. "To attempt to use public policy to abrogate human physiology would be futile and possibly harmful to human health."
During her April 22 presentation to the Food and Drug Law Institute's annual meeting, Woodcock was asked when FDA would translate its commitment to the idea of transparency into a greater number of concrete actions.
Some stakeholders have called on the agency to take transparency into newer areas, such as releasing product application "complete response" letters.
Dealing with documents is not as simple as posting them on the FDA website, it appears. Woodcock said nearly all of them would require some redacting of proprietary or other sensitive information for legal protection. She said when the number of pages reaches into the billions, it is a massive workload.
On a entirely different subject, this just in from the BBC:
Men whose love lives are falling short can try a new prescription pill to combat the problem.
The first drug made available in the UK for premature ejaculation, called Priligy, can reportedly triple the amount of time a man can last in bed. It works by altering levels of serotonin in the brain, which should give men more control over ejaculation.
Keep calm and carry on.
The complete Beeb story can be found here: http://news.bbc.co.uk/2/hi/health/8646075.stm
The European Court of Justice ruled on April 22 that financially incentivizing physicians to prescribe generic drugs (and to switch patients from branded medicines) is legal – but it remains illegal for innovator companies to engage in similar practices.
In its ruling, the ECJ said that EU legislation banning pharmaceutical companies from offering financial incentives to doctors does not prevent public health bodies, like UK Primary Care Trusts, from implementing schemes that offer doctors financial inducements for switching patients to a specific, named, medicine.
The switching of large numbers of patients in one area of the UK from a branded statin to generic simvastatin was believed to have been one of the triggers for the original court case, currently being heard in the UK High Court; it was this court that referred the questions decided by the ECJ in its ruling.
But, to understand the unintended consequences of such actions, it’s also imperative to consider what happens when such switching occurs. Case in point, The Health Improvement Network (THIN) study-- an observational study of a large United Kingdom primary care database showed that patients who were switched from established Lipitor therapy to generic simvastatin experienced a 30% increase in relative risk of cardiovascular events or death compared to patients who remained on Lipitor therapy.
The data, which included records from October 1997 to June 2005, were generated from a retrospective analysis of a medical database of anonymous patient records entered by general practitioners in the United Kingdom. The analysis included 11,520 patients (2,511 patients who had taken Lipitor for six months or more and were switched to simvastatin vs. 9,009 patients who were taking Lipitor for six months or more and then remained on Lipitor therapy).
While the reasons these patients were switched is not known -- it is certainly not inconceivable that it might have had something to do with ... short term costs to the system.
Now there will be another reason – direct payments.
And what of Article 94 of EU Directive 2001/83 which bans the practice. Specifically, "Where medicinal products are being promoted to persons qualified to prescribe or supply them, no gifts, pecuniary advantages or benefits in kind may be supplied, offered or promised to such persons unless they are inexpensive and relevant to the practice of medicine or pharmacy."
Do different rules apply to government incentives? In the EU it looks like this is just the case. Another lesson we need to learn as we move forward into the uncertain world of Uncle Sam, MD.
"While Berwick will be constrained by congressional directives and institutional rules, his large vision focuses on nothing less than revamping the delivery system from top to bottom. For example, when I interviewed him for my book Rx For Healthcare Reform, here’s how Berwick explained why he thought we could cut 30 to 40 percent out of healthcare spending without affecting quality:
The work of John Wennberg and Elliott Fisher at Dartmouth shows that the more intensive services are available in a community, the more that they’re used without effect on the quality of care. So supply drives demand. It’s a monster cost driver without value added.
This isn’t what most of the healthcare community (aside from primary care doctors) wants to hear. It isn’t what drug or device makers want to hear. And it’s a major reason why Republicans will oppose Berwick. But it is the message that all stakeholders need to absorb and take to heart if we really want to control costs and make good healthcare available to everyone."
http://industry.bnet.com/healthcare/10002286/berwicks-big-vision-will-make-him-target-in-bid-to-become-medicare-chief/
Meanwhile in the UK, Britain's Department of Health said investment in the NHS had risen from £35bn in 1997 to more than £110bn by 2011. That's over 200 percent, twice as fast as it did in the US. At the same time, UK oncologists note: "We now spend similar amounts to Europe on health generally and cancer care in particular, but less than two thirds of the European average on cancer drugs.... It just can't be that everybody else around the world is wrong about access to innovative cancer care and the NHS right in rationing it so severely."
No, it is also that UK cancer survival rates are still the lowest in Western Europe.
http://news.bbc.co.uk/2/hi/health/7579422.stm
Yes, "discipline" indeed.
Here's my take on Berwick's sweeping and silly assertions. Do we really want someone so driven by ideology and biased against our own healthcare system to head up CMS?
http://spectator.org/archives/2010/04/26/the-fix-is-in
Remember Richard Foster?
He’s the CMS official whose report on Part D costs were “suppressed” during the debate over the MMA. That was in 2003 – when he was a “whistle-blowing darling of Congressional Democrats.
That was then. This is now. Robert Pear reports that:
In signing the measure last month, President Obama said it would “bring down health care costs for families and businesses and governments.” But Mr. Foster said, “Overall national health expenditures under the health reform act would increase by a total of $311 billion,” or nine-tenths of 1 percent, compared with the amounts that would otherwise be spent from 2010 to 2019.
In his report, sent to Congress Thursday night, Mr. Foster said that some provisions of the law, including cutbacks in Medicare payments to health care providers and a tax on high-cost employer-sponsored coverage, would slow the growth of health costs. But he said the savings “would be more than offset through 2019 by the higher health expenditures resulting from the coverage expansions.”
Mr. Foster says the law will save Medicare more than $500 billion in the coming decade and will postpone exhaustion of the Medicare trust fund by 12 years, so it would run out of money in 2029, rather than 2017. In addition, he said, the reduction in the growth of Medicare will lead to lower premiums and co-payments for Medicare beneficiaries.
But, Mr. Foster said, these savings assume that the law will be carried out as written, and that may be an unrealistic assumption. The cuts, he said, “could become unsustainable” because they may drive some hospitals and nursing homes into the red, “possibly jeopardizing access to care for beneficiaries.”
Nancy-Ann DeParle, director of the White House Office of Health Reform, said that fear was unfounded.
“Unfounded.” That’s the counter-argument? Seems so. The White House is going to have to do better – a lot better. And remember – this story is from the pages of the New York Times – not the Washington Times.
The complete New York Times Story can be found here.
This will certainly add fuel to the fire of those calling for repeal.
But rather than repeal we should be talking “appeal” – like in appealing to the better angels of our nature. In other words -- being for something. And that something is called "the truth."
Let’s start a movement – and let’s call it “Appealism.” Here’s how it works: Rather than calling for “repeal” (which is a negative thing) let’s be for “appeal.” That means appealing to common sense and un-fuzzy math. It means calling a spade a spade and (most importantly) being honest.
I know – how naïve. But …
Even if the GOP realizes its most optimistic November projections, the likelihood for legislative repeal is still, well, a highly optimistic projection. And, even all the stars and planets align in an elephant-friendly fashion, there’s no scenario that provides for a two-thirds majority over-ride of a 100% predictable Presidential veto.
Hence, the need for “appeal.” The Foster analysis is a good place to start because the finish line isn’t repeal; it’s controlling the rule-making process. And that’s where “appeal” comes in.
Appealing to reality. Appealing to facts and figures rather than rhetoric and double-sided political coin of bribes and threats.
Appealism. Yes we can.
"Makers of dietary supplements looked to be on a collision course with Sen. John McCain when the Arizona Republican introduced legislation designed to strengthen policing of products marketed to casual and professional athletes." Yet, "the two sides appear to have reached a compromise they say will be part of a manager's amendment to a major food safety bill (S 510) being readied for Senate floor debate." Notably, "the provisions would require the Food and Drug Administration (FDA) to issue long-delayed guidance on acceptable supplement ingredients and report to the Drug Enforcement Administration when it rejects new supplements that contain synthetic anabolic steroids." This "would be a victory for McCain," who wanted the FDA to have more authority over supplements.
Talk about federal preemption!
CMS Medicaid confirmed Thursday that some money states receive as rebates from drugmakers will now be redirected to the federal government to help pay for the new health overhaul.
State officials had hoped the federal government would interpret the law in a way that left their discounts untouched. But in a letter Thursday to state Medicaid officials, CMS Services explained, "The amount of the savings resulting from the increases in the rebate percentages … will be remitted to the Federal government."
Cindy Mann, CMS director for the Center for Medicaid and State Operations , confirmed in an interview that meant states that already received drugmaker rebates between 15.1 and 23.1 percent would no longer be able to keep that portion of their savings. States and the federal government would continue to share in savings for the portion of the rebates both below and above that range. Many states already have average rebates well above 23 percent.
Mann suggested that state officials could negotiate deeper discounts with drugmakers to try to "recapture that dollar."
Thanks Cindy. Very helpful.
Teva is resigning from the Generic Pharmaceutical Association effective June 30th. (Apotex and Hospira resigned from GPhA last year.)
Does this make GPhA the healthcare equivalent of the Not Ready for Primetime Players?
Because Teva (Hebrew for "nature") most certainly is.
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.
