Blog Page 981

INDUSTRY: Tenet watch

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Sometimes the old favorites don’t disappoint! Tenet is in the news again with some more subpoenas about possible fraudulent referrals, this time in Louisiana, and a spat with Blue Cross in California which said that half its cardiac procedures at Doctors Medical Center of Modesto were unnecessary. In fact things got so nasty last week that the CEO of the hospital was going to sue Blue Cross for defamation! It looks like Blue Cross is keeping the hospital in its network for now.  Tenet however believes that the root of this dispute was a fight over $50m in reimbursements, and of course we don’t yet know how that got settled.

Meanwhile, remember the little company that Tenet was using for reporting (having fired Perot systems)? Well apparently that company took over another that held a big repository of (patient-identified) medical errors.  During the first monthly conference call a rustling was heard on the other side of the phone and then no one answered.  Apparently the repo man had come a knockin’. It seems that the lease hadn’t been paid and that they were kicked out of the office–immediately. I’m sure none of the hospitals using that service would be worried about the security of their error data, would they?

POLICY: Medicare bill making it?

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As I go to bed late, late Sunday night it looks like the Medicare bill is going to avoid a filibuster and get through the Senate.  Go see Don Johnson at The Business Word for the latest news. Meanwhile here’s a chart showing how much impact the bill will have on seniors’ drug costs.  As I remark in some comments over at the Bloviator, it really only helps those poor seniors who are currently paying $2-4,000 a year and are literally deciding between food or drugs–and those with drug costs over $5,000 for whom it is a good catastrophic drug insurance policy.  For the larger majority  of seniors paying less for drugs or those with higher incomes, this bill doesn’t do too much.  It also looks like it’ll reduce employers’ support for Medigap policies. I suspect that the politically unpopularity of that feature of the Bill will come to bite the Republicans in the 2004 election. In any event watch for more vicious politicization of Medicare’s future in its representation to seniors in the coming days and weeks.

PHARMA: Statin drugs may go OTC in UK next year and Crestor update

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As you probably know by now, the UK has a national health service (NHS) which pays for prescription drugs. Most Brits pay a small (or if they are over 60 no) co-payment when they get their drugs and the real cost of the drugs are absorbed by the government. The government does indeed bargain down the price of the drugs, but there is still a real cost involved. Just like health plans in the  US, where Wellpoint led the battle to get Claritin forcibly moved to the OTC market, the UK is interested in moving drugs OTC–where of course the cost is absorbed directly by the consumer. 

Now, one of the most significant categories is moving in that direction. Currently the NHS is spending roughly $625 per year for each of the 1.5 million Brits on statins–more proof as if you needed it that we Brits eat too much greasy food!  At over $900m a year, that’s a tempting morsel to get off the government’s budget, and consequently the health minister is looking to move statins to OTC in the UK within 6 months.

Merck is thrilled about this as its main statin Zocor lost its patent in the UK earlier this year–it has patent protection in the US until 2006.  Pfizer has less to worry about in the US as Lipitor is patented until 2010. However, in the UK presumably if Lipitor comes out of the NHS’ (and in some cases out of fundholding GPs’ budgets), and Zocor is availble OTC, this is bad news for Lipitor as physicians there will stop prescribing it, and instead tell patients to get Zocor at the local chemist. Of course, Merck and its OTC competitors will meet stiff price resistance there. At Drugstore.com Liptor is about $1100 a year in the US, but less than half that in Canada, and obviously will cost much less OTC in the UK. So this might be a fore-runner of what happens in the US when Zocor goes off patent in 2 years. And of course if Zocor is operating successfully OTC in the UK by then, why wouldn’t US health plans want to move it and Lipitor OTC here too–just as they did with Claritin?

Crestor Update.  The newest statin Crestor from Astra-Zeneca has had a somewhat rocky start.  In this post I noted that the  research group Friedman, Billings, Ramsey & Co had suggested Crestor wasn’t selling too well and that there were some adverse events being reported in the UK.  Now that same group has reported that according to:

    The Canadian Adverse Drug Reaction Monitoring Program, a database maintained by the Therapeutic Products Directorate of Health Canada (the drug regulatory agency in Canada), between February 1st and September 30th, 30 adverse drug reactions have been reported with Crestor, 24 of which were considered serious. In addition to 10 reports of muscle-related side effects (eight at the 10mg strength and two at 20mg, with eight patients below the age of 60) and one death (myocardial infarction in a 22-year-old patient), we find it notable that kidney-related adverse events have been associated with the drug at lower dosages. Events associated with kidney issues were observed in five patients in Canada and are as follows:

    ? one report of acute renal failure at the 40mg strength;
    ? one report of nephropathy at the 10mg strength;
    ? two reports of proteinuria at 10mg;
    ? three reports of hematuria, one at 10mg and two at the 20mg strength;
    ? two reports of increased blood creatinine, one at 10mg and one at the 40mg strength.

Of course it’s still very early days for Crestor, but between these reports and the suggestions of rushing the research in The Lancet last month, it may be that the FDA starts to consider some action.

TECHNOLOGY: eHealth update

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I posted a while back on Manhattan Research’s new Cybercitizen health findings. In the past week I’ve received Forrester Research’s Healthcare First Look email and also seen a new article from Caroline Broder at iHealthBeat on Manhattan research’s eHealth findings. Forrester focuses on Rx sites and on physician sites.  The results are predictable.  There is good information on Rx sites, but consumers don’t trust drug companies as a source.  They’d rather see it from their own doctor or from a medical specialty society.  But the doctors don’t have a web site or if they do, only 6% of consumers have been to see it.

Manhattan concentrates on consumer use of the eHealth space generally and their intersections with health plan sites in particular.  And like in Forrester’s previous research on the topic, health plan sites are little used and not very functional. Around 20% use their health plan’s site, and are in general dissapointed with what they can do there.  Manhattan though believes that health plan sites are getting better and starting to incorporate more useful functionality. As regular readers know, I was trying to sell software to health plans to help them do this from 2000-2002 and we were well ahead of the market.  Nice to hear that they’re slowly moving in the right direction.

POLICY: Medicare Bill just gets past the house

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And in a rare Saturday posting . . .

After some real hard core arm-twisting, (plus leaving the voting open for 3 hours), at 6am this morning the House passed the Medicare Bill 220-215. It looked like it was going down 218-216 for over 2 hours when finally the Republican leadership got 2 of their holdouts to cave (and then a couple more committed).  I suspect what they say about watching sausage and watching legislation being made applies here!

We should know about the Senate by Monday. My suspicion is that it has the straight up and down votes to win, so it’s a question of the filibuster being used.  Just as it was in the Energy Bill.

PHARMA: PhRMA members learn to play the game

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So I can’t quite stay away from the Bill….

In a reminder of how hardball politics is played in the USA these days, there’s a report out today (hat tip to California Healthline) that shows that in the first 6 months of 2003 the healthcare industry spent over $139m on lobbying in the run-up to Medicare bill. $37.7m came from the pharma industry. This number probably includes standard costs associated with keeping Washington offices, etc. so it’s not all "new" money. But obviously much more has been spent in the last four months, and there’s no doubt that, as in its successful attempt to defeat certain House Democrats who were in favor of price controls in the run-up to the 2000 elections, targeted contributions and lobbying have had a definitive pay-off for the pharma industry in this Bill.

This is no secret in health care.  The AHA, for-profit hospital groups and the AMA have been doing this forever in order to influence the Medicare and Medicaid reimbursement schedules.  The drug companies have too, of course, but as they were previously opposed to drug coverage, their contributions weren’t quite so targeted.  Now that the industry has decided to buy the best bill it can, you can see the results in the text of the bill–especially the import ban from Canada.  The ongoing federalization of the health care system continues.  It’s starting to look more and more like the Defense department and the military industrial complex–you can expect the lobbying/business techniques in that industry to become more common in health care.

This post is not meant as criticism of PhRMA.  Their fiduciary interest is to their shareholders, and once they saw that politically drug coverage was unavoidable, that interest means to get as much money as possible out of the government. And the way to do that in the USA is by using money to buy influence. In the light of the even more pork-laden energy bill coming out the same week–and you know that there was equal lobbying weight on that one too–more disinterested observers may believe that campaign finance reform needs a little strengthening. But that’s in a parallel universe and we and PhRMA live in this one.

GENERAL HEALTHCARE: A run-down of interesting stuff

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I’ve been a bit mesmerized by Medicare drug coverage in the last week or two and I’ve let a lot of stuff build up in my "draft folder" — so I’m going to do brief comments on many of the most interesting things I’ve seen come up. These will be way less verbose than usual! So in no particular order:

1) TECHNOLOGY: ePrescribing was mandatory in the House version of the Medicare Bill (thanks to Newt Gingrich’s influence).  But it ends up being optional in the final version to make sure that the AMA has no reason not to be on board for its passage.

2) TECHNOLOGY: Boston Scientific is close to having its new drug coated stent Taxus approved. When that happens it’ll probably be in the lead for a couple of years over its rivals from J&J and Guidant in the $5bn stent market. Various studies suggesting that stent-based angioplasty may not be the best option for cardiac patients continue to be ignored in the real world.

3) HEALTH PLANS: California Blue Cross has gone back to the origins of IPA-based HMOs by creating a new HMO that selects providers based on their cost-effective behavior, and then passes the savings onto consumers by charging them lower premiums. Whether this can survive in the market place is uncertain, but Mark Weinberg, Len Schaffer’s number two, has been talking about creating low cost plans aimed at the uninsured for some time now.  It’ll be interesting to see if the costs are low enough to encourage the uninsured to sign up. Meanwhile Paul Ginsburg’s team at HSC report that health plan and payer attempts to segment providers by cost-effectiveness into "tiered" plans (i.e. where the patient is steered to the low cost providers in the network via co-pay incentives) have been very limited and unsuccessful thus far.

4) PHARMA: Consulting company Decision Resources has a report out suggesting that the Breast Cancer drug market will grow from around $2 billion now to over $6 Billion in 2012. Most of the growth will be due to increased use of hormone therapy. Coincidentally it looks like the proposed reduction in reimbursement for oncologists doing infusion in their own offices (and selling the drugs on to plans and Medicare) will be reversed if the Medicare bill passes.

5) HEALTH PLANS: Consumer-directed health (CDH) plans are growing in take-up but rather slowly. They appear to be attractive to the healthier population within employer groups and although there are claims that they are saving employers money, I’m not sure they are not just cream skimming money from the employer’s insurance pool into the employees MSAs! If my suspicions are right employers will be looking at their overall impact more carefully as CDH options grow from being gimmick of the month to a real option. Of course one employer reaction might be to force all employees into them, essentially forcing employees to pay more out of pocket to cover the "donut hole" gap between what’s put in the MSA and the total out-of-pocket for which the employee is responsible.

6) TECHNOLOGY: The steady fusion of devices, drugs and procedures is making life complicated for regulators and payers. Forbes has an interesting take on when the FDA approves a device, but Medicare (via CMS) doesn’t allocate separate reimbursement for using the device in a procedure that already has a defined DRG.  While CMS is reviewing how it deals with this situation, because of the overall FFS nature of Medicare, a new innovation that costs more up front may not be reimbursed even if it will save money over time.  As more devices get more complicated and sophisticated, CMS’ ability to keep up in this cost-effectiveness–regulation–reimbursement triangle will be stretched.

That lot should keep you busy for while.  I’ll be back to saying lots about a little, rather than vice-versa, next week.

PBMs: Caremark hiccup or It’s better to be lucky than good

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Well I told you last week that I’d had a small bet on the PBMs losing value this week as investors realized that the Medicare legislation wasn’t guaranteed to pass.  It happened for random reasons that I bought put options last week on AdvancePCS, which trades in lockstep with Caremark, which is acquiring it. (In case you don’t know, put options go up if the underlying stock goes down). Did it go down because of the delay in passing the Medicare bill? Heck no, so I was wondering what to do as the options expire tomorrow.  Then midday today the news comes out that Caremark is being sued by whistleblowers who:

    allege that Caremark resold returned drugs, failed to credit the state employees’ health plan for copayments on returned drugs and falsified and destroyed documents to make it appear as if the company had complied with contractual time limits for processing and delivering prescriptions.

Interestingly enough, the state of Florida which was the client and who supposedly was defrauded, did not join the suit. So it probably has no legs. 

Nonetheless the news was enough to push AdvancePCS stock down $2 and to make my options to be worth 3 times what I paid for them.  As the traders say, "it’s good to be good and it’s good to be lucky, but it’s better to be lucky than good!" Pity that it was only a small bet.

QUALITY QUICKIE: IOM calls for National EMR

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The latest IOM report in the series that started with To Err is Human is out. It calls for national computerized information systems and improved data standardization. I’ll write more on this later but for now read this article

PHARMA: Update on COX-2 piece

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In my recent post about Cox-2 inhibitors, I suggested that pharma companies had been successful in getting them widely adopted, and that conversely PBMs and payers had done a bad job in counter-detailing. One doctor emailed me suggesting that I had overlooked the importance of defensive medicine–the desire of the doctor to avoid a law-suit. I challenged him to show me a lawsuit for prescribing ibuprofen and here it is, and the suit came from only one dose of ibuprofen.

You may feel that this overly stresses legal pressures on doctors’ prescribing. However, while the patient lost the lawsuit, and it was a pretty extreme case, there is clear evidence that some other medications have been marketed this way.  Genentech marketed TPA for heart attack victims by stressing that if a marginally less effective but much cheaper drug (Streptokinase) was used instead, legal ramifications would follow from patients’ families if the patient died. A large clinical trial had shown that there was a slightly better chance of patient survival if TPA was used.  TPA use became the norm very quickly. This might explain some of the COX-2 "over"-prescribing.  Of course, DTC advertising and poor formulary enforcement helped too