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Morning Briefing

Summaries of health policy coverage from major news organizations

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Wednesday, May 25 2016

Full Issue

Big Pharma Reaps Rewards As Mainstream Medicine Embraces New, Expanded Conditions

News outlets report on the pharmaceutical drug industry.

Know someone who shouts and pounds on the steering wheel when cut off in traffic? They might be one of 16 million Americans said to suffer from "intermittent explosive disorder." Can you polish off a box of cookies while watching your favorite TV show? Could be a sign of "binge-eating disorder," said to afflict 7 million Americans. ... None of these conditions was considered part of mainstream medicine just 20 years ago. But thanks to new definitions or lowered thresholds, millions more people — overnight — fit the criteria of having treatable disorders. Many independent doctors and researchers are skeptical, saying the new conditions are the product of medical groups that get pharmaceutical industry funding, researchers looking to advance their careers and drug companies aiming to broaden the market for expensive new products. On top of that, the drugs sold to treat these newly defined — and not life-threatening — conditions often carry serious health risks, a Milwaukee Journal Sentinel/MedPage Today investigation has found. (Fauber and Fiore, 5/22)

In August 2015, Turing Pharmaceuticals and its then-chief executive, Martin Shkreli, purchased a drug called Daraprim and immediately raised its price more than 5,000 percent. Within days, Turing contacted Patient Services Inc., or PSI, a charity that helps people meet the insurance copayments on costly drugs. Turing wanted PSI to create a fund for patients with toxoplasmosis, a parasitic infection that is most often treated with Daraprim. Having just made Daraprim much more costly, Turing was now offering to make it more affordable. But this is not a feel-good story. It’s a story about why expensive drugs keep getting more expensive, and how U.S. taxpayers support a billion-dollar system in which charitable giving is, in effect, a very profitable form of investing for drug companies—one that may also be tax-deductible. (Elgin and Langreth, 5/19)

Sky-high costs for breakthrough specialty drugs that have proven to be highly effective at treating diseases such as cancer, HIV and hepatitis C have been one of the top problems over the past several years for health insurers trying to keep premiums affordable. The Blue Cross Blue Shield Association recently highlighted the issue in a report finding that spending on specialty drugs increased 26 percent - $87 per member – between 2013 and 2014. Specialty drug spending was 17 percent higher in the individual market, which includes plans sold in the Affordable Care Act health insurance marketplaces, than it was in the employer market in 2014, the report found. (Hansard, 5/23)

A comprehensive government crackdown on high drug prices isn’t likely soon. Still, investors shouldn’t let their guard down. Biotech and pharmaceutical stocks have struggled since last summer when the controversy erupted into a big political issue. Last week’s congressional hearing on the Obama administration’s proposed experimental overhaul of the Medicare Part B program served as a reminder of pricing peril. (Grant, 5/22)

The 25 percent across-the-board drop in values of publicly-traded biotech firms over the past year can be traced clearly to the backlash against drug prices, spurred by pricey hepatitis C drugs and exacerbated by the likes of Martin Shkreli. But after consulting with representatives from hospitals, lobbyists and health insurance firms on the issue of drug costs last week, one leading industry analyst predicts all that backlash will have little to no lasting effect on drug prices themselves. (Seiffert, 5/23)

Two years ago, James Luongo was thrilled to hear about the first new drugs that could rid his body of hepatitis C. The virus had been silently circulating in his blood for years and would likely cause liver disease, perhaps cancer. But he still felt fine. The drugs seemed like a good thing until his Medicaid insurer denied coverage of the treatment. Twice. ... The answer, most everyone agrees, is that the drugs are so expensive that states and their Medicaid contractors have felt forced to gamble. (Sapatkin, 5/22)

As drug prices continue to soar, Americans are paying more for prescription drugs than any other country. The global pharmaceuticals market is worth $300 billion a year and is expected to rise to $400 billion within three years, according to the World Health Organization. The costs of those drugs is financially crushing for some. It's especially tough for one West Michigan woman who takes 20 medications a day. Megan Litvack,23, suffers from five chronic illnesses. She was born with three and diagnosed with two others. She takes 17 pills orally and three others through an I.V. daily. "I wouldn’t wish this upon my worst enemy," Megan said. "It’s not easy to fight for your life when your body is fighting against you." (Francis, 5/23)

A Blue Cross Blue Shield Association report released Thursday found that spending per patient on specialty drugs increased by 26 percent between 2013 and 2014. The report examined both pharmacy and medical benefit claims, which takes into account the costs of drugs obtained by a prescription and those administered in a doctor’s office or hospital, which is where more than 80 percent of cancer drugs are given. BCBSA’s studies are useful because its insurers are the most active participants on the Obamacare exchanges and they encompass a fairly large sample of insurers nationwide. (Owens, 5/19)

Two criminal trials of former health-care executives set to begin in a Boston courthouse in the coming weeks illustrate what the federal government says is a new push to hold more individuals accountable for alleged corporate wrongdoing. A former division president at drugmaker Allergan PLC’s Warner Chilcott unit will stand trial on a charge of conspiring to pay kickbacks to doctors to prod them to prescribe the company’s medicines, including osteoporosis drug Atelvia. And two former senior officers of Johnson & Johnson medical-device unit Acclarent are charged with marketing a sinus-opening device for a use not authorized by the Food and Drug Administration. All three executives deny wrongdoing. (Loftus, 5/22)

The U.S. Patent and Trademark Office (PTO) is to review UCB's patent for its epilepsy drug Vimpat, the latest round in a legal battle between the Belgian pharmaceutical company and generic rivals. U.S. pharmaceuticals group Argentum Pharmaceuticals, which challenged UCB's patent, said in a statement late on Monday that the PTO had granted approval for a review of the sole remaining U.S. patent of UCB's Vimpat drug, due to expire in March 2022. (5/24)

Amid an ongoing rift with the US government, India last week issued a new policy about intellectual property, but opinions are divided over whether the move will appease the pharmaceutical industry, which has been pushing the Indian government to strengthen patent protection. ... The US Trade Rep, meanwhile, recently kept India on its annual list of countries it believes does not sufficiently enforce patent rights. And global brand-name drug makers complain that laws and court rulings have made it easier for their generic rivals to sell lower-cost, copycat versions of their medicines. (Silverman, 5/23)

This is part of the Morning Briefing, a summary of health policy coverage from major news organizations. Sign up for an email subscription.
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