By UWE REINHARDT

Citing a recent report in the Los Angeles Times, an article in FirecePharma entitled “Some generic drug prices soar despite heavy competition” rises questions on the ability of market forces to reign in drug prices – for example, on the idea that the price of Mylan NV’s EpiPen would not have risen to $614 per 2-pack from about $100 per 2-pack or less in 2007 if the Food and Drug Administration (FDA) had not prevented Sanofi’s and a new product by Teva to come on market, leaving Mylan NV in full monopolistic control, of this blockbuster market.

According to data assembled by the Los Angeles Times, prices of generic drugs can rise sharply even if multiple manufacturers compete for market share. As an illustration, the article cites the generic drug ursodiol for gall stones, produced by no less than 8 manufacturers. “Several years ago, the wholesale price ran as low as 45 cents a capsule. In May 2014, Lannett Co. ($LCI) bumped its price for ursodiol to $5.10 a capsule, a price hike of more than 1,000%. Rather than keeping their own generic versions of ursodiol low to steal market share, each competitor followed Lannett’s lead and priced their versions the same or close.”

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By DEVON HERRICK

U.S. Patent No. 4031893, Hypodermic Injection Device Having Means for Varying the Medicament Capacity Thereof                  

Americans throw away unused epinephrine auto-injectors worth more than $1 billion annually. Or maybe it would be more accurate to say that Americans waste more than $1 billion annually on $50 million worth of epinephrine auto-injectors that are discarded unused. The devices should only cost $20 a pair. So, why do they cost $608 instead? 

First, a little background. Severe allergic reactions can result in anaphylaxis, including skin irritation, hives and a person’s windpipe can even begin to swell closed. Children allergic to peanuts or tree nuts are especially a concern since their parents are not always there to supervise them. By some estimates, perhaps 4 percent to 6 percent of children have some type of food allergy. Yet, the likelihood of children suffering anaphylaxis is low. Estimates vary, but a study from Washington State back in the 1990s found only 1 kid in 9,524 had an episode in any given year. A similar study from Minnesota found the rate was one in 1,400. The difference in the prevalence had to do with how strict a definition was used.

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By KIP SULLIVAN, JD

In an open letter to President Obama that I posted here on August 24, I stated that his expectation that the Affordable Care Act would have a deflationary effect was naive. I said he was badly misled by the managed care movement, and that he should never have accepted the movement’s diagnosis (overuse) and solutions (shifting insurance risk to doctors and micromanaging them). To help him understand that, I said I would post criticism of three prominent managed care proponents who influenced him: Elliott Fisher and his colleagues at the Dartmouth Institute, Atul Gawande, and Peter Orszag.

I will start with Elliott Fisher and his colleagues at the Dartmouth Institute for Health Policy and Clinical Research because they have been so influential with the entire health policy elite, not just Obama. I will devote this post and the next to them. I devote this post to demonstrating how influential they have been; I devote the next post to demonstrating how misleading they have been.

The Dartmouth Institute deserves credit for assembling data that shows substantial variation in the rate at which medical services are provided, both within small areas and between regions of the country. This data is very useful for generating hypotheses in need of further research. But the group deserves severe criticism for promoting the conclusion that variation can be explained primarily by overuse and virtually none of it can be explained by underuse, and for promoting “accountable care organizations” and other forms of “integrated care” as the solution that will address their erroneous overuse diagnosis.

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By MARGALIT GUR-ARIE

Discrimination in health care was institutionalized in Independence, Missouri on July 30, 1965 when President Johnson signed the Social Security Amendments of 1965 into law, creating “two moral frameworks for public financing of healthcare”. Medicare was supposedly an “earned” right for the elderly, while Medicaid was framed as a “welfare” program for the poor. It was a necessary political compromise. It was just a first step and bigger and better things would certainly be accomplished in due course. It was better than nothing. But fifty years later, and after taking yet another “first step” with Obamacare, the wasteful, divisive, discriminatory, and ultimately self-defeating direction we chose back in 1965, and again in 2010, has not changed one bit.

After 45 years of tinkering with Medicare and Medicaid, Obamacare in a bold stroke expanded the welfare model of medical care upwards into the heart of what used to be known as the American middle class, the former engine of progress and prosperity.  First, Obamacare expanded the Medicaid program itself to include people who are less poor than current Medicaid recipients. When Medicaid opened its doors in 1966, it provided charity health care to approximately 2% of Americans. Today, over 22% of Americans (72.6 million) and almost half of our children (35.3 million) are receiving their medical care via this welfare program and the numbers are trending sharply upwards.

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By ASHISH JHA, MD

Last week, CMS sent out press releases touting over $1 billion in savings from Accountable Care Organizations.  Here’s the tweet from Andy Slavitt, the acting Administrator of CMS:

NEW ACO RESULTS: physicians are changing care, w better results for patients & are saving money. Over $1B. https://t.co/FEfe3QErb5

— Andy Slavitt 🇺🇦 (@ASlavitt) August 25, 2016

The link in the tweet is to a press release.  The link in the press release citing more details is to another press release.  There’s little in the way of analysis or data about how ACOs did in 2015.  So I decided to do a quick examination of how ACOs are doing and share the results below.

Basic background on ACOs:

Simply put, an ACO is a group of providers that is responsible for the costs of caring for a population while hitting some basic quality metrics.  This model is meant to save money by better coordinating care. As I’ve written before, I’m a pretty big fan of the idea – I think it sets up the right incentives and if an organization does a good job, they should be able to save money for Medicare and get some of those savings back themselves.

ACOs come in two main flavors:  Pioneers and Medicare Shared Savings Program (MSSP).  Pioneers were a small group of relatively large organizations that embarked on the ACO pathway early (as the name implies).  The Pioneer program started with 32 organizations and only 12 remained in 2015.  It remains a relatively small part of the ACO effort and for the purposes of this discussion, I won’t focus on it further.  The other flavor is MSSP.  As of 2016, the program has more than 400 organizations participating and as opposed to Pioneers, has been growing by leaps and bounds.  It’s the dominant ACO program – and it too comes in many sub-flavors, some of which I will touch on briefly below.

A couple more quick facts:  MSSP essentially started in 2012 so for those ACOs that have been there from the beginning, we now have 4 years of results.  Each year, the program has added more organizations (while losing a small number).  In 2015, for instance, they added an additional 89 organizations.

So last week, when CMS announced having saved more than $1B from MSSPs, it appeared to be a big deal.  After struggling to find the underlying data, Aneesh Chopra (former Chief Technology Officer for the US government) tweeted the link to me:

open data is now the default in government 🙂https://t.co/LyXWJzU5lZ

— Aneesh Chopra (@aneeshchopra) August 26, 2016

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By ROBERT McNUTT, MD

I have practiced medicine for over 40 years. I have yet to find a physician without a chronic disease in question who is smarter than the person with that chronic disease. I have been impressed that a patient’s numeric insights and intuitions when they are ill surpass their skills when they were not ill. All a patient needs is information, in all its glory and messiness, to know if the information is worth anything to them when they face a medical decision.  Patients, in my view, are the best information managers and evidence experts I have ever seen, and I know a bunch of evidence experts to draw upon for the comparison. My interpretation may be biased, but I have been doing shared consults with patients for twenty plus years and I have learned that patients are smart. Consider the following:

1. The man had been advised to have surgery. The man and his wife stared in stunned silence at the data on prostate cancer treatment outcomes with surgery. The study was described in detail including a description of the people who were studied. The wife finally spoke, “You mean to tell us you want my husband to have surgery when so few have been studied! You mean to tell us that not a single person of our cultural heritage has been tested in the study?” I responded and reminded, “I am not asking you to have surgery. We are going over information of potential benefit and harm that you must balance for your choice.” They were kind in response, refused to consider surgery or further discussion, and, instead, chose to enter a clinical study.

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