Latest Drugwonks' Blog
After a feisty year of debate, Congress has passed healthcare reform legislation. Once enacted, it will increase the numbers of Americans with health insurance as well as both the size and scope of government. There’s also the very real danger that the legislation will further erode the stake that physicians have to practice both the art and science of medicine.
And the numbers? Staggering when you consider they are absurdly under-scored. According to Douglas Holtz-Eakin (director of the Congressional Budget Office from 2003 to 2005), if you strip out all the gimmicks and games and rework the calculus, a wholly different picture emerges: The health care reform legislation would raise, not lower, federal deficits, by $562 billion. Even with readjustment, it will make the Social Security trust fund look like Fort Knox. The day the President signs this into law could be viewed by a near-future generation of Americans as a day of infamy -- if we let it.
So here’s the good news – the solution is innovation.
We have to embrace innovative technologies for medical records and prescribing. We need innovative clinical trial designs and molecular diagnostics so that we can develop better, more personalized medicines faster and for far less then the current $1 billion plus delivery charge. We need innovation in access and reimbursement policies that rewards speed-to-best-treatment rather than more lower-cost patients per hour.
Will more people have access to health insurance? They will and that’s a good thing. But, let’s be honest, we’re not talking about erasing the word “uninsured” from the American healthcare dictionary – we’re just redefining what it means.
We have to embrace the fact that we will all pay more in taxes (yes, all of us) eventually. And, ultimately, we will be okay with that. Americans are always willing to do what’s right for their fellow citizens. As Winston Churchill said, “Americans always want to do the right thing – after they have tried everything else.” Even so, many of our fellow Americans will receive less comprehensive healthcare benefits than they are receiving now.
So we’d better start taking innovation – of both the incremental and discontinuous varieties – seriously. And that means both spending more on harder developmental R&D (with concomitant higher investment risks). In this regard, the new legislative language on the development of FOBS (follow-on biologics or, if you prefer, biosimilars) is a good thing. (And don’t ever call them generic biologics!)
There’s lip service to the need for more robust comparative effectiveness – although this is a battle yet to be either defined (comparative effectiveness or cost effectiveness or clinical effectiveness?) or fought (do we need a U.S. version of NICE?). And a battle royal it will be. In addition, there’s as yet-to-be reconciled language on a Medicare advisory board that could very well morph into a national formulary body. L’audace, l’audace, toujours l’audace. This isn’t even the end of the beginning.
Of course we bid adieu to the infamous Medicare Part D Doughnut Hole. Pax vobiscum. The Medicare prescription drug benefit is coming in hundreds of millions of dollars under budget already and consistently has 90% + approval ratings by America’s savvy seniors. Medicare Advantage programs? Don’t ask.
Now insurance companies can’t turn anyone down because of a pre-existing condition (bravo!) but they can’t charge higher premiums for people who have them? This isn’t an elegant or economically viable solution and will have to change. Otherwise it’s just a slow march to a single-payer system.
Over the past year, we spent a lot of wasted time throwing around terms like “death panels” but, at the end of the day, we didn’t even begin to address the elephant-in-the-room issue of how much of our national treasure we spend on end of life care. We will have to address this highly volatile and divisive issue – and sooner rather than later.
The legislation doesn’t do anything really significant about driving young, healthy people into the insurance pool. The anemic penalties (which don’t even kick-in right away – the demographics and politics aren’t too hard to figure out) actually disincentivize youthful participation. After all, why not pay the monthly penalty (which is less than even a very affordable monthly insurance premium) if, when you do face a medical emergency, you can’t be turned down or charged more? Nor does the bill create any sort of national insurance pool – where we can all benefit from a 50-state economy of scale insurance marketplace.
Some of the best things about the bill are what is does not do.
No drug importation. (Sorry! Senator Dorgan. Hooray! Peggy Hamburg.) And the Non-Interference Clause remains the law of the land. When originally drafted (wisely by then Senators Daschle and Kennedy), we knew then what we need to remember now, that (1) direct government negotiations for Medicare drug prices won’t (according to numerous government studies and leading economists) lower Medicare drug prices and (2) it is the next slippery step towards even broader price controls. And price controls equal choice controls.
So let’s keep our eye on the prize. No, not the November elections – the real prize: better access to healthcare for all Americans. Innovation that focuses on creating a chronic healthcare culture that embraces prevention and prophylactic care. We will not survive as a nation of obese, hypertensive diabetics. Rather than wasting time on spin, let’s redouble our efforts on innovation. Then, when we succeed through brainpower and teamwork (and, hopefully some civil bipartisanship), the circus surrounding this vote and the past year’s partisan political warfare will be but a footnote in American political history.
That applies to the goal of carving up Medicare and controlling healthcare spending through greater government regulation on access to and higher taxes on innovation, with the objective and/or on consequence of discouraging investment overall in order to expand healthcare entitlements:
Washington State, which has made much of it's position as leader in biomedical innovation is a bellweather of what it to come:
tinyurl.com/ydpvubs
Non-Profits, Investors Worry About Proposed Washington State Tax Surcharge Increase
NEW YORK (GenomeWeb News) – Washington state lawmakers are considering more-than-doubling the business and occupation tax surcharge imposed on non-profit research institutes engaged in R&D, as well as their startup spinouts and other biotech businesses — part of an $800 million package of taxes intended to balance a $2.8 billion budget shortfall.
The current B&O tax surcharge on qualified research and development expenditures, other than for capital improvement purposes, is the gross income derived from R&D, multiplied by 0.484 percent. That tax would rise by half a percentage point, to 0.974 under the measure, which passed the state House of Representatives earlier this month by a 52-45 vote, with one representative excused.
ESSB 6143, a bill to modify the state excise tax law, is pending in the state Senate's Rules Committee, which on Thursday placed the bill on a third reading. State lawmakers have extended their 60-day regular session with a special session that began Monday.
"All the R&D community is up in arms about this — as well as the investment community," Robert Nelsen, a co-founder and a managing director of Arch Venture Partners, told GenomeWeb Daily News. "It seems like innovation is under fire at the federal and state level. There is a whole lot of talk from all levels of government about how great innovation is, and the response is to tax it. It is absolutely insane."
Nelsen has joined the state's life sciences trade group, the Washington Biotechnology and Biomedical Association, and the Washington Global Health Alliance, which promotes collaborations in global health research and programs across the state, in fighting the proposed B&O tax hike.
Leroy Hood, president of the Institute for Systems Biology, told GWDN a review of the bill by ISB's senior vice president for finance and operations, James Ladd, found the bill is not likely to hurt the institute in the short term because it can more than make up the tax through several tax credits.
"The longer term is very unclear. I think the biggest impact that it will have is that it will reduce the attractiveness of startup companies in Seattle," said Hood.
Hood has co-founded more than a dozen companies, including five spun out of ISB that are based on its technologies. He recalled having "a long and difficult fight" with the funding venture capitalists and CEO candidates to locate one of the ISB spinouts — Integrated Diagnostics — in Seattle. That firm, which raised $30 million in Series A venture capital financing last fall, aims to develop tests for monitoring organ-specific proteins that appear in the earliest stages of diseases, using genomic and proteomic technologies and discovery data licensed from ISB.
"I won — just barely," said Hood. "This probably won't happen in the future."
He added, "I think the bill is unbelievably short sighted — just what I have come to expect from a state government that does not seem to understand that the future for Washington will be embedded in information-based jobs. This is exactly the wrong approach to facilitating the information—based economy.
"I must say it was one of the big debates I had with myself when contemplating moving to Seattle — namely is the state populist and not forward looking? It looks like my skeptical self was correct," said Hood.
Also joining in the effort is the Seattle Biomedical Research Institute, which has recently re-branded itself as Seattle BioMed. Lynn Zimmerman, Seattle BioMed's director of finance, told GWDN the institute now more than recoups what it pays in B&O taxes by participating in an employee commuter trip reduction program.
"The increase will probably put us over the commuter trip reduction credit amount, and as a result, we are planning to apply for the High Technology Business and Occupation Tax Credit enacted in 2004, of which we currently do not take advantage," Zimmerman said.
Zimmerman noted that most of Seattle BioMed's revenues came from two sources not subject to the B&O tax: contributions from donors and grants.
According to Seattle BioMed's annual report for the fiscal year that ended June 30, 2009, the institute derives 49.5 percent of its revenues from private grants and contracts, another 35 percent from government grants, and 9 percent from contributions.
Private grant revenue grew 20 percent year-over-year, to almost $22.9 million in FY 2009; while government grants rose about 22 percent, to $16.2 million; and contributions slid 16 percent, to $4.2 million.
As the Ol' Perfessor (Casey Stengel) would say, "You can look it up."
Here's what then-Senator Obama had to say in 2005 about reforms in the Temporary Assistance for Needy Families (TANF) welfare program that he and other Democrats opposed:
“The TANF program affects millions of American children and families and deserves a full and fair debate. Under the rules, the reconciliation process does not permit that debate. Reconciliation is therefore the wrong place for policy changes and the wrong place for the proposed changes to the TANF program. In short, the reconciliation process appears to have lost its proper meaning. A vehicle designed for deficit reduction and fiscal responsibility has been hijacked to facilitate reckless deficits and unsustainable debt.”
Yep -- he was against it before he was for it.
Bauhaus guru Walter Gropius said, "Less is more." But it was Mies van der Rohe (known to New Yorkers as the designer of the Seagram Building) who opined, "but more tastes better."
The Congressional Budget Office has released its latest estimate of the price tag of the House of Representative's healthcare reform bill. At $940 billion, this version of reform will cost more than the measures passed by the House and Senate late last year. More is not always better.
CBO also says the bill will reduce the deficit by $130 billion over the next 10 years and by $1.2 trillion over the following decade. That’s right. It will reduce the deficit by significantly increasing federal spending. Only in America.
While they’re at it, they should also predict the weather for the next decade.
Let’s face it: Uncle Sam has a poor track record of forecasting how much new programs will cost. Medicare’s progenitors, for example, stated in 1967 that the entitlement would cost $12 billion by 1990. Actual Medicare spending in 1990 amounted to $110 billion — nearly 10 times the initial estimate. Oops.
CBO’s deficit-reduction estimates are further divorced from reality because they don’t include as much as $371 billion in new spending to fix reimbursement rates for doctors who treat Medicare patients. Imagine that — health reform legislation that doesn’t include payments to doctors. Only in Washington, DC.
Absent congressional action, Medicare reimbursement rates will fall 21 percent next year. Congress has no intention of letting that happen. But the Democrats have decided that they don’t have to include this so-called “doctor fix” in their healthcare reform package — even though it’s critical to preserving Medicare.
No wonder the CBO was able to conclude that the Democrats’ health reform package would reduce the deficit by $130 billion. The bean-counters simply ignored the $371 billion in spending needed to fix Medicare reimbursement rates.
Democrats point to the favorable CBO score as proof that their health reform package is a model of fiscal responsibility. But it’s likely that the next generation of lawmakers will look back on these cost estimates with the same astonishment reserved for Medicare’s naïve forecasters back in 1967.
http://content.nejm.org/cgi/content/full/NEJMe1002322
The finding that valsartan failed to have an effect on either of the cardiovascular-disease outcomes but had a positive effect on the incidence of diabetes is surprising. Previous studies of ACE inhibitors and ARBs have suggested that these drugs have a beneficial effect on cardiovascular disease in patients with diabetes, and the lower blood pressure achieved would be expected to result in a reduction in cardiovascular disease. In the NAVIGATOR study, the high rates of loss to follow-up (13%), use of off-study ACE inhibitors or ARBs among participants assigned to placebo (24%), and nonadherence to valsartan (34% by study end) could explain the absence of an effect on cardiovascular disease.
The results from the NAVIGATOR study do not support the contention that reducing postprandial hyperglycemia has a specific role in preventing diabetes or reducing cardiovascular disease. Other than increasing the rate of hypoglycemia by a factor of two, nateglinide had little effect. Although the authors suggest that the prevention of diabetes with valsartan might make it a preferred drug as compared with antihypertensive drugs that potentially worsen glycemia, valsartan was relatively weak in preventing diabetes, and it did not lower the rates of cardiovascular disease. The prevention of diabetes remains a critical public health priority, but for now we should steer away from these two drugs and use effective lifestyle interventions and, in selected persons, metformin to combat the epidemic.PhRMA is supporting a new advertising campaign supporting health care reform legislation.
The new television ad, "Finish," along with two previously-released ads, "Covered" and "You Choose," began airing March 17 in targeted districts across the country where House Democrats undecided on how to vote might need a push to vote in favor of the reform package.
"It's been a long road, but now we've never been closer to common sense health reform," a voice in the "Finish" ad says. "Reform that leaves health care decisions to patients and their doctors, covers pre-existing conditions, and lowers out of pocket costs. A new path that lowers the deficit. Congress, keep fighting for health reform - all the way to the finish."
The 15-second clips in support of health care reform were produced by Americans for Stable Quality Care, a non-profit coalition of a number of organizations - including PhRMA, the Biotechnology Industry Organization, Families USA and the American Medical Association.
Health reform is a rough ride, so here’s a germane quote from America’s favorite rough rider -- Teddy Roosevelt:
“When you are in a hole – stop digging.”
Germane, because of some new poll numbers on health care reform.
According to a new national poll from GfK Roper (sponsored by CMPI-Advance), 70% of Americans oppose using budget reconciliation to pass health care reform and 60% believe it is unfair for House leadership to have the option to introduce a procedural rule that would “deem” the Senate health care reform bill as being passed without actually voting on the legislation itself.
Americans do not support for increasing Medicare payroll taxes for the high wage earners (46% support, 47% oppose) or reducing what doctors and hospitals are paid for their services (45% support, 48% oppose). The survey shows that Americans are evenly split in their belief that the Congressional health care proposal will increase taxes and premiums for the 73 million Americans with health insurance (as estimated by the Joint Committee on Taxation).
Other findings include:
· 81% of those polled strongly oppose health care reforms that would increase insurance premiums for healthy people to offset premiums of people who wait until they are diagnosed with an illness to purchase insurance.
· 80% oppose allowing the government to decide what kind of health care coverage Americans are able to purchase.
· 87% oppose having a government panel recommend or decide what medical procedures or medical advances your doctor can use or your health plan can pay for.
· 84% support reforms that would allow people to buy health insurance across state lines.
· 3 out of 4 Americans oppose healthcare reforms that would raise taxes and cut Medicare benefits to pay for health care subsidies for expanded coverage for the uninsured.
· 84% support healthcare reforms that would let people get lower premiums for getting or staying healthy.
Complete survey results can be found here.
Madame Speaker – stop digging.
Survey Methodology
GfK Roper completed 1,000 interviews, made up of male and female adults (in approximately equal number), all 18 years of age and over. The interviews were conducted between March 12 and March 14, 2010. The margin of error for this study is ± 3 percentage points.
Sampling for this study was conducted using a national probability sample of all exchanges and area codes across the continental United States. All interviews were conducted using a computer-assisted telephone interviewing system. Statistical weights were designed from United States Census Bureau statistics.
Physician Survey: Health Reforms Potential Impact on Physician Supply and Quality of Medical Care
Mar. – Apr. 2010
| Key Findings | |
Physician Support of Health Reform in General | |
| • | 62.7% of physicians feel that health reform is needed but should be implemented in a more targeted, gradual way, as opposed to the sweeping overhaul that is in legislation. |
| • | 28.7% of physicians are in favor of a public option. |
| • | 3.6% of physicians prefer the “status quo” and feel that the U.S. health care system is best “as is. |
Health Reform and Primary Care Physicians | |
| • | 46.3% of primary care physicians (family medicine and internal medicine) feel that the passing of health reform will either force them out of medicine or make them want to leave medicine. |
Health Reform, Public Option, and Practice Revenue/Physician Income | |
| • | 41% of physicians feel that income and practice revenue will “decline or worsen dramatically” with a public option. |
| • | 30% feel income will “decline or worsen somewhat” with a public option. |
| • | 9% feel income will “improve somewhat” with a public option, and 0.8% feel income will “improve dramatically” with a public option. |
Health Reform, Public Option, and Physician Supply | |
| • | 72% of physicians feel that a public option would have a negative impact on physician supply, with 45% feeling it will “decline or worsen dramatically” and 27% predicting it will “decline or worsen somewhat. |
| • | 24% of physicians think they will try to retire early if a public option is implemented. |
| • | 21% of physicians would try to leave medicine if a public option is implemented, even if not near retirement age at the time. |
Health Reform and Recommending Medicine to Others as a Career | |
| • | 36% of physicians would not recommend medicine as a career, regardless of health reform. |
| • | 27% would recommend medicine as a career but not if health reform passes. |
| • | 25% of physicians would recommend medicine as a career regardless of health reform. |
| • | 12% would not recommend medicine as a career now but feel that they would recommend it as a career if health reform passes |
Source:“Physician Survey: Health Reform’s Impact on Physician Supply and Quality of Medical Care,”
The Medicus Firm, www.TheMedicusFirm.com
From the pages of Politico ...
Pharma tries to protect its deal
As Democrats scramble to finish drafting health reform legislation, drug lobbyists are working overtime to ensure that the final bill doesn’t bust the $90 billion deal they have with the White House and Senate Democratic leaders.
For the past few days, drug industry lobbyists have huddled with Democratic staffers to work out how to structure the fees drug makers will pay under reform while still making good on Democrats’ promise to close the gap in seniors’ drug coverage. Last winter, the industry pledged $10 billion to help close the coverage gap in addition to the $80 billion deal it had struck earlier in the year.
Drug makers were asked to sign off on multiple solutions, giving Democrats backup options should any of the fixes run into problems passing muster with the Senate parliamentarian, who, because of procedural rules, essentially has the final say over what’s included in the legislative package.
With billions of dollars hanging in the balance, there was “real heartburn with the bill over the weekend and over the last week,” an industry source said.
The industry also decided to drop its push to be carved out from an independent Medicare payment advisory board – vowing instead to fight it if it becomes law, sources said. The board would essentially force cost cutting measures on lawmakers, limiting the influence of outside groups like PhRMA to lobby the outcome.
With all the drama of reform coming down to the wire, the players’ nerves are rubbed raw, said one insider. Still, the industry expects its deal to hold.
Democratic are racing to finish a reconciliation bill that could pass the House this week and win Senate approval before Congress breaks for the Easter recess at the end of the month. Democrats are crafting the bill so it only needs 51 votes to pass, bypassing the Republicans’ filibuster threat.
But Republicans pounced on the wheeling and dealing as another symptom of what’s wrong with reform.
“All we hear about is the arm-twisting and the horse-trading that’s going on over there behind the scenes – the mad dash ahead of the big vote. And once again, Americans can’t believe what they’re hearing,” Senate Republican Leader Mitch McConnell said Monday on the chamber floor. “The drug lobbyists were here in the Capitol over the weekend huddling with Democrat staffers to make sure their interests would be protected in the final bill. This is precisely the kind of thing Americans rebelled against after the last vote on this bill.”
Also Monday, senior pharmaceutical industry sources denied a New York Times report that the industry has invested $12 million in new, pro-reform advertising. PhRMA has not signed off on a new ad campaign, no ad copy has been approved, nothing has been done, said the sources, who are intimately familiar with the situation.
"I cannot say this more emphatically, it's not true," said one source, who is not authorized to speak publicly.
In fact, the White House has been leaning on the industry to buy positive ads to provide air cover to wavering House members, whose districts have been inundated with opposition advertising. But the drug makers are holding out until they see, and sign off on, the final reconciliation bill, industry sources said.
As a key White House ally, the drug industry has been the money behind much of the pro-reform advertising this past year. Drug makers' decision to hold out could mean there will be little in the way of pre-vote cover. But, if the industry supports the final bill, it's almost guaranteed a post-vote blitz of thank you ads praising lawmakers who voted yes will air and they will likely see support through Election Day.
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.
