with Paulina Firozi
Rep. David N. Cicilline (D-R.I.), who’s preparing to take the helm of the House Judiciary antitrust subcommittee, held a briefing on health-care consolidation earlier this year for the Congressional Antitrust Caucus. He said it's one of his top priorities to look into health-care "profiteering" and price hikes next year.
"When Democrats assume the responsibility of leadership in January, we will get to work immediately to promote competition and address monopoly power in health-care markets," Cicilline said in a statement provided to The Health 202.
And the full committee’s chairman-to-be, Rep. Jerrold Nadler (D-N.Y.), has also indicated health-care mergers are one of his top concerns, urging earlier this year antitrust enforcers to look closely at the conjoining of CVS Health and Aetna.
Consolidation is a powerful and growing trend in the health-care industry. By next year, 93 percent of most metropolitan hospital markets will be highly concentrated, up from 65 percent in 1990, according to a June report by PricewaterhouseCooper’s Health Research Institute.
And it’s not just hospitals — small private, physician practices are quickly falling by the wayside as they get absorbed into large hospital networks. Only one-third of physician groups were independent last year, compared with almost 60 percent in 2000.
There’s also been a spate of mega mergers. In some cases, major insurers and pharmacy benefit managers have joined forces (think Cigna/Express Scripts and CVS/Aetna) or insurers have bought medical providers (think Optum/DaVita Medical Group).
While GOP-led administrations have generally been more lenient on merger activity than those led by Democrats, the Federal Trade Commission under President Trump has been relatively aggressive — consistent with the president’s populist rhetoric. But some Democrats and liberals want to see the FTC go further in scrutinizing mergers and want the commission to be given more resources to conduct its oversight.
The House Judiciary Committee is likely to pursue an oversight role, primarily by asking the FTC to review mergers that lawmakers have ongoing concerns might especially result in hurting competition and pushing up costs for consumers.
Today the Center for American Progress will release a report — provided first to The Health 202 — laying out how the liberal group views the problem and suggesting possible solutions.
“The current state of health care provider markets demands stronger enforcement by federal and state antitrust authorities, policies to support more robust competition among providers and limits on prices in already concentrated markets,” the report says.
The report proposes giving the FTC and state antitrust regulators sharper legal tools to review mergers, monitor conduct and challenge anti-competitive behavior. It also suggests that greater price transparency from companies and making anti-competitive contract clauses illegal could also move the needle.
And it suggests a policy change that would undoubtedly garner heavy pushback from Republicans: capping the prices hospitals and doctors can charge patients, as a way of forcing providers to compete for patients by offering better care.
There’s some overlap between the CAP report and a report on health-care competition released by the White House on Monday — suggesting some common ground where Republicans and Democrats might be able to work together to combat consolidation.
Both papers call for what are known as site-neutral payments, which are essentially when an insurer pays the same rate for services regardless of whether they’re delivered in a hospital or a doctor’s office. Medicare has traditionally reimbursed at higher rates for services delivered at a hospital, providing incentive for hospital systems to gobble up physician practices.
The White House paper — a 114-page document that prods lawmakers to tilt the U.S. health-care system in a more free-market direction — says Congress should “establish site neutral payment policies based on the anticipated clinical needs and risk factors of the patient, rather than the site of service.”
That report shows the GOP-led administration is concerned about the effects of health-care industry mergers, devoting 11 pages to illustrating how hospitals and doctors are consolidating. It calls on the administration to examine the impact of integration on competition and prices but prescribes few other solutions, mostly just calling for “continued vigilance.”
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AHH: The Trump administration has cast doubt on the fate of a multimillion-dollar research contract with the University of California at San Francisco to test new treatments for HIV, amid pressure from abortion foes to erase federal funding for research involving fetal tissue.
A National Institutes of Health official informed an investigator at UCSF last week that the government was ending its seven-year contract, our Post colleague Amy Goldstein reports. “The university received a letter from the AIDS division of NIH’s National Institute for Allergy and Infectious Diseases saying the government would continue the contract for 90 days rather than the expected year-long renewal, with no forecast of its prospects after that,” Amy writes.
But she adds accounts of the series of events related to this contract have differed. A virologist familiar with the events told Amy the principal investigator on the contract said an NIH employee “made it clear it was not an internal NIH decision,” and said the decision was “coming from the highest levels.” NIH’s principal deputy director Lawrence Tabak, however, told Amy he has “no indication such a call was made.”
The mayhem over the contract “is part of a building battle between conservatives opposed to research using fetal tissue and scientists who say the material is vital to developing new therapies for diseases from AIDS to Parkinson’s," Amy writes.
The move follows an announcement from the Trump administration in September that it was reviewing all government-funded research using fetal tissue, citing “serious regulatory, moral, and ethical considerations involved,” as Amy and our colleagues Ariana Eunjung Cha and Laurie McGinley reported. The UCSF contract is the second pot of federal money affected by the government's efforts against fetal tissue.
OOF: Insys Therapeutics Inc. could be the first to face the consequences of the backlash against corporations that helped fuel the ongoing opioid crisis.
The former top sales executive at Insys Alec Burlakoff faces as many as 20 years in prison, and is one of the “first drug-company executives charged in the mounting legal backlash to the U.S. opioid crisis, which was tied to about 50,000 deaths last year,” Bloomberg’s Riley Griffin reports. But other former Insys executives are scheduled to go on trial in January – a reality that’s taking a toll on the company.
“Its sales have plunged as it spends millions of dollars on legal defenses of its former executives, including billionaire founder and ex-chief executive John Kapoor,” Griffin writes. “In a desperate bid to save itself, Insys’s new managers are trying to sell off its main pain drug to a corporate buyer to raise money. They hope to use the proceeds to pivot out of the opioid business into something slightly less controversial – cannabis-derived drugs.”
“Insys isn’t alone in facing opioid-related legal issues. Hundreds of cases have been filed against pharmaceutical companies and distributors. But no company’s troubles may be more acute than Insys’s.”
He adds that the company is “short on cash, with $113 million in the bank, and has said it needs ‘substantial funds’ to stay afloat.” “There’s no guarantee the process will yield any results,” Insys spokesman Joe McGrath told Bloomberg. “We haven’t found a buyer — and we might not.”
OUCH: Check your refrigerators and freezers. Federal officials expanded a nationwide recall to 12 million pounds of raw beef products after hundreds of people were infected by salmonella. The Centers for Disease Control and Prevention said cases of related salmonella have been reported in at least 25 states, according to our Post colleague Deanna Paul reports.
The recalled raw beef products include Kroger, Laura’s Lean and JBS generic, she notes. The CDC is warning consumers to check their homes for these products and either throw them away or return them to the purchase location.
The U.S. Agriculture Department’s Food Safety and Inspection Service said the beef products, which include ground beef, were packaged between July 26 and Sept. 7, 2018.
“State and federal agencies continued to investigate the outbreak of salmonella illness, identifying approximately 250 cases of infection with the Newport strain with onset dates between July and September,” Paul writes.
— Experts warn the new agreement China made with the United States to label the deadly synthetic opioid fentanyl as a controlled substance may not have such a quick impact, our Post colleagues Lenny Bernstein and Katie Zezima report. One expert on illicit economies told our colleagues she “wouldn’t hold my breath on how big that impact will be" on the death toll related to fentanyl.
The White House says the move will subject illegally fentanyl dealers in China to the country’s “maximum penalty under the law.”
“That is certainly a positive step, said academic and law enforcement authorities who track the problem,” Bernstein and Zezima write. “But left unclear — in part because the White House offered few details — is exactly how China plans to curb the extremely powerful drug that now dominates illegal opioid traffic in the United States.
It’s also not the first time China has made such efforts. “The United States and China have worked toward cooperation on stemming the flow of illegal fentanyl since the Obama administration, with modest steps taken along the way,” our colleagues add.
— Sens. Chuck Grassley (R-Iowa) and Ron Wyden (D-Ore.) introduced bipartisan legislation to give the federal government authority to make sure drug companies aren’t overcharging Medicaid.
The move is a powerful one from the incoming chair and ranking member of the Senate Finance Committee, one that signals the pair is serious about tackling drug prices. The committee has jurisdiction over both Medicare and Medicaid, as well as the issues the Trump administration has so far tackled on drug pricing, as Stat’s Ike Swetlitz points out.
“The bill itself was motivated by allegations that the drug company Mylan misclassified its signature epinephrine auto-injector, EpiPen, under the Medicaid program, which resulted in taxpayers spending more money than they should have whenever a Medicaid recipient purchased the product,” Swetlitz writes. “In August, Mylan settled the allegations for $465 million with the Department of Justice. But taxpayers likely lost out on much more than $465 million because of Mylan’s behavior, according to an analysis by the Office of Inspector General of the Department of Health and Human Services conducted at Grassley’s request. In May 2017, that office estimated taxpayers lost at least $1.27 billion.”
The bipartisan bill would allow the Department of Health and Human Services to recoup the losses “if companies misclassify their drugs in the future. And it would give HHS the ability to directly modify a drug’s classification — something that, right now, HHS cannot do.”
— GoodRx, a website tracking prescription drug prices, has put out a list ranking the most expensive medications, noting the list expanded from the top 10 to the top 20 because of the sheer number of drugs with skyrocketing prices.
“Since May, three newly approved drugs have made their way into our most expensive list, and all 20 have a list price of more than $25,000 for a monthly supply,” GoodRx researcher Tori Marsh wrote in a post about the list. “Some of these medications are for rare genetic disorders that afflict few people, while others treat more common conditions like pulmonary hypertension and hepatitis C.”
Actimmune, a drug prescribed for osteopetrosis and chronic granulomatous disease, a rare immune system disorder, tops the list at $52,322 for a monthly supply. The last drug on the list, Remodulin, which is prescribed for treating pulmonary arterial hypertension, is listed as $25,466.40 for a monthly supply.
The rankings are based on the drugs list prices, set by the drug companies, although that’s not typically reflective of the price the patient actually pays at the pharmacy counter.
— And here are a few more good reads:
- Brookings Institution holds a roundtable discussion on health care and data on Dec. 10.
- The House Energy and Commerce Subcommittee on Health is scheduled to hold a hearing on the 21st Century Cures Act on Dec. 11.
- The House Energy and Commerce Committee Subcommittee on Oversight and Investigations is scheduled to hold a hearing on "Examining the Availability of SAFE Kits at Hospitals in the United States" on Dec. 12.
- The Heritage Foundation holds an event on "Defending the Rights and Wellbeing of Children Today" on Dec. 12.
—Former Sen. Bob Dole briefly rose from his wheelchair to give George H. W. Bush a final salute:
Trump visits with the Bushes at Blair House: