New York physician charged with manslaughter in patient death

Legal and Illegal Drug Overdose: Guide to Signs, Symptoms, and Help

A New York physician has been charged with manslaughter in the second degree and is facing other felonies related to the overdose death of a patient, New York Attorney General Letitia James announced Feb. 19. 

Sudipt Deshmukh, MD, allegedly prescribed a lethal mix of opioids and other controlled substances that resulted in the overdose death of a patient. The physician allegedly knew the patient struggled with addiction.

An indictment, unsealed Feb. 18, alleges that between 2006 and 2016, Dr. Deshmukh ignored his professional responsibilities by prescribing combinations of opioid painkillers and other controlled substances, including hydrocodone, methadone and morphine, without regard to the risk of death associated with the combinations of those drugs.  

Dr. Deshmukh is facing several felony charges, including healthcare fraud, for allegedly causing Medicare to pay for medically unnecessary prescriptions. 

The indictment comes after the attorney general’s office filed a felony complaint against Dr. Deshmukh in August. In 2019, the New York State Office of Professional Medical Conduct found that he committed several counts of misconduct. 

Drug companies seek billion-dollar tax deductions from opioid settlement

https://www.washingtonpost.com/business/2021/02/12/opioid-settlement-tax-refund/?arc404=true

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Four companies that agreed to pay a combined $26 billion to settle claims about their roles in the opioid crisis plan to deduct some of those costs from their taxes and recoup around $1 billion apiece.

In recent months, as details of the blockbuster settlement were still being worked out, pharmaceutical giant Johnson & Johnson and the “big three” drug distributors — McKesson, AmerisourceBergen and Cardinal Health —all updated their financial projections to include large tax benefits stemming from the expected deal, a Washington Post analysis of regulatory filings found.

In one example, Dublin, Ohio-based drug distributor Cardinal Health said earlier this month it planned to collect a $974 million cash refund because it claimed its opioid-related legal costs as a “net operating loss carryback” — a tax provision Congress included in last year’s coronavirus bailout package as a way of helping companies struggling during the pandemic.

The deductions may deepen public anger toward companies prosecutors say played key roles in a destructive public health crisis that kills tens of thousands of Americans every year. In lawsuits filed by dozens of states and local jurisdictions, public officials have argued that the companies, among other corporate defendants, flooded the country with billions of highly addictive pills and ignored signs they were being steered to people who abused them.

Under the terms of the proposed settlement — which is being finalized and will ultimately be subject to federal court approval — the four companies would pay between $5 billion and $8 billion each to reimburse communities for the costs of the health crisis. Plaintiffs who support the proposal say it will resolve a highly complex litigation process and make funds available to communities and individuals still struggling with addiction.

Others including Greg McNeil, whose son became addicted to opioids and died from an overdose, have said $26 billion is only a small fraction of the epidemic’s financial toll and argue the proposal doesn’t include what many family members of opioid victims want the most: an admission of guilt.

All four firms disavow any wrongdoing or legal responsibility. The companies have said they produced government-approved prescription pills, distributed them to registered pharmacies and took steps to try to prevent their misuse.

U.S. tax laws generally restrict companies from deducting the cost of legal settlements from their taxes, with one major exception: Damages paid to victims as restitution for the misdeeds can usually be deducted. Still, Congress has placed stricter limits on such deductions in recent years, and some tax experts say the Internal Revenue Service could challenge the companies’ attempts to deduct opioid settlement costs.

Harry Cullen, a Brooklyn-based activist who has worked to hold drug companies accountable for the epidemic, said it is “incredibly insulting” that companies would try deduct the settlement payments. “As if they are donating it to these people who they harmed in the first place.”

Erich Timmerman, a spokesman for Cardinal Health, said in a statement that the company’s tax deductions are permissible under federal law. He also pointed to a statement chief executive Mike Kaufmann made in November, when he said Cardinal takes its role in the pharmaceutical supply chain seriously and remains “committed to being part of the solution to this epidemic.”

AmerisourceBergen declined to comment on its taxes but said in a statement the company takes steps to mitigate the diversion of prescription drugs, including by refusing service to customers it sees as a risk and by making daily reports to federal drug officials.

Johnson & Johnson declined to comment on the opioid settlement and tax deductions beyond its regulatory filings.A spokeswoman for McKesson did not respond to multiple requests for comment.

Cardinal Health’s use of the “carryback” tax break draws attention to what some see as a shortcoming of the $2 trillion U.S. coronavirus bailout known as the Cares Act. In their haste to funnel cash benefits to businesses facing economic peril, lawmakers made billions of dollars in tax breaks broadly available to any company, regardless of whether it suffered during the pandemic.

Cardinal, a company with a $15 billion market capitalization and $4 billion in available cash, surpassed Wall Street expectations for its most recent earnings period. Last week, CEO Kaufmann told investors a rebound in medical treatments and procedures had revived demand for Cardinal’s health devices and drugs. He said the company was boosting its investment in sophisticated supply-chain technology.

On the same day, Cardinal said it was filing for a tax break using the Cares Act provision and expected a nearly $1 billion cash refund from the IRS within the next 12 months. The company plans to pay $6.6 billion in the settlement.

Francine J. Lipman, a tax professor at the University of Nevada at Las Vegas, said Cardinal Health appears to be “getting a bit of a windfall from laws that Congress intended to help companies that are suffering due to a pandemic.”

The “carryback” tax break permits any company that lost money in 2018, 2019 or 2020 to apply those losses to previous, more profitable years. Some form of this provision has been permitted by the U.S. tax code for over a century to help businesses that face ups and downs to even out their taxes.

The Cares Act raised the limit on the amount of losses companies can use to offset taxes and permitted them to apply those losses to earlier periods. Because the corporate tax rate was higher before 2018, companies with recent losses can increase tax refunds they received before that year by up to 67 percent.

Cardinal estimated in August it expected to deduct $488 million from the expected opioid legal settlement. But in its Feb. 5 filing, the company said the amount probably would be higher in part because the Cares Act permitted it to carry back losses related to the opioid litigation to previous years when the tax rate was higher.

UNLV’s Lipman said Cardinal’s decision to apply for a tax refund before any legal settlement has been finalized could face scrutiny from the IRS. Deductions must be made against business expenses that are shown to have “economic effect,” she said, which may preclude deductions against future, unpaid legal settlements.

Timmerman, Cardinal’s spokesman, said the company has already recorded a loss related to the opioid litigation because Cardinal insures itself through a wholly-owned insurance subsidiary. The opioid litigation caused a loss to the insurance company’s reserve, and that is the loss that Cardinal is deducting, he said.

“Tax and accounting rules applicable to insurance companies, including self-insurance companies, require recognition of loss when an insurance reserve is set, thus establishing economic effect, even if the underlying settlement is not final,” Timmerman said.

The three other companies involved in the $26 billion settlement have estimated the tax benefits of the deal but have not filed for tax refunds. They all said the tax benefits could be lower if courts or regulators determined some or all of the payments are not tax-deductible.

McKesson, which expects to pay $8.1 billion in the settlement, said in a Feb. 2 filing that the actual cost of the deal would be $6.7 billion after taxes, implying a $1.4 billion tax benefit. The company also said $497 million in tax benefits were “uncertain” because of the “uncertainty in connection with the deductibility of opioid related litigation and claims.”

AmerisourceBergen, which anticipates a $6.6 billion settlement payment, said in November it expects a $1.1 billion tax benefit. The company said an additional $371.5 million tax benefit was possible but “uncertain.”

“A settlement has not been reached, and, therefore, we applied significant judgment in estimating the ultimate amount of the opioid litigation settlement that would be deductible,” the company said.

Matthew Gardner, a senior fellow at the nonprofit Institute on Taxation and Economic Policy, said these disclaimers suggest the companies are making conservative estimates. “That’s one way of saying they are likely going to claim even bigger tax benefits in their tax returns than they are showing on their financial statements,” he said.

Whether the payments will be deductible may hinge on specific word choices in the final terms of the settlement. Though recent changes to the tax code have attempted to close loopholes that permit companies to deduct taxes when they have committed wrongdoing, many companies now push to make sure their settlements include a “restitution” payment for victims — the “magic word” that often qualifies them for deductions, Gardner said.

In previous opioid-related settlements local governments reached with McKesson, Purdue Pharma and Teva Pharmaceuticals, the companies admitted no fault and agreed to restitution payments that appeared to qualify them for tax deductions, USA Today reported in 2019.

Johnson & Johnson has said it expects it could deduct as much as 21.4 percent of its $5 billion share of the settlement, which would mean a roughly $1.1 billion tax benefit. However, the company said last summer that the deductible amount may be lower if a regulation proposed by the IRS last year came into effect.

The rule, which did take effect Jan. 20, requires companies to meet a long list of specific criteria to qualify government settlements for tax deductions.

Faces on pills are seen at the Provocative Opioid Memorial in 2018 in Washington, D.C. There are 22,000 pills that represent the number of people who died of an opioid overdose in 2015. 

In 2019, The Post analyzed a database maintained by the Drug Enforcement Administration that tracks the path of every pain pill sold in the United States. The database shows that America’s largest drug companies distributed 76 billion oxycodone and hydrocodone pain pills across the country between 2006 and 2012 as the nation’s deadliest drug epidemic spun out of control.

McKesson, Cardinal Health and AmerisourceBergen distributed 44 percent of the nation’s oxycodone and hydrocodone pills — the two most abused prescription opioid drugs — during that time.

An investigation by The Post last year found that near the peak of U.S. opioid production, a Johnson & Johnson subsidiary was manufacturing enough oxycodone and hydrocodone to capture half or more of the U.S. market. The company also lobbied for years to help persuade regulators to loosen a narcotics import rule, allowing Johnson & Johnson’s U.S. subsidiary to produce rising amounts of opioids out of potent poppies harvested by its Tasmanian subsidiary, The Post found.

Attorneys for Johnson & Johnson have said its opioid-producing subsidiaries did not cause the United States’ addiction crisis, that the companies were heavily regulated, and that such companies play only a “peripheral role in the multibillion-dollar market for prescription opioids.”

Purdue Pharma pleads guilty to federal criminal charges related to nation’s opioid crisis

https://www.cnn.com/2020/11/24/us/purdue-pharma-oxycontin-guilty-plea/index.html?fbclid=IwAR2DM1jxDtKxFaCW1o-HJ45Tuh1-HOVw5DjNx_ncuhfajyjdkvP9wnMHUMg

Purdue Pharma, the maker of OxyContin, pleaded guilty Tuesday to three federal criminal charges related to the company’s role in creating the nation’s opioid crisis. Purdue Pharma board chairman Steve Miller pleaded guilty on behalf of the company during a virtual federal court hearing in front of US District Judge Madeline Cox Arleo.

The counts include one of dual-object conspiracy to defraud the United States and to violate the Food, Drug, and Cosmetic Act, and two counts of conspiracy to violate the Federal Anti-Kickback Statute.

The plea deal announced in October includes the largest penalties ever levied against a pharmaceutical manufacturer, including a criminal fine of $3.544 billion and an additional $2 billion in criminal forfeiture, according to a Department of Justice press release.

The company, which declared bankruptcy last year, will be dissolved as a part of the plea agreement, and its assets will be used to create a new “public benefit company” controlled by a trust or similar entity designed for the benefit of the American public.

The Justice Department has said Purdue Pharma will function entirely in the public interest rather than to maximize profits. Its future earnings will go to paying the fines and penalties, which in turn will be used to combat the opioid crisis.

In pleading guilty to the criminal charges, the company is taking responsibility for past misconduct, Purdue Pharma said in a statement to CNN Tuesday.”Having our plea accepted in federal court, and taking responsibility for past misconduct, is an essential step to preserve billions of dollars of value for creditors and advance our goal of providing financial resources and lifesaving medicines to address the opioid crisis,” the statement said. “We continue to work tirelessly to build additional support for a proposed bankruptcy settlement, which would direct the overwhelming majority of the settlement funds to state, local and tribal governments for the purpose of abating the opioid crisis.”

According to the US Centers for Disease Control and Prevention, about 70,000 Americans died of drug overdoses in 2018, just one year of the opioid crisis, and about 70% of those deaths were caused by prescription or illicit opioids like OxyContin. In that year, an estimated 10.3 million Americans 12 and older misused opioids, including 9.9 million prescription pain reliever abusers and 808,000 heroin users, according to the US Department of Health and Human Services Substance Abuse and Mental Health Services Administration.

The Sackler family, and other current and former employees and owners of the company, still face the possibility that federal criminal charges will be filed against them. The court did not set a date for a sentencing hearing.

KHN’s ‘What The Health?’: Trump Twists on Virus Response

KHN’s ‘What The Health?’: Trump Twists on Virus Response

KHN's 'What The Health?': Trump Twists on Virus Response | Kaiser ...

President Donald Trump — who has spent the past six months trying to play down the coronavirus pandemic — seems to have pivoted. In back-to-back briefings on July 21 and 22, Trump cautioned that the U.S. is in a dangerous place vis-a-vis the pandemic. He urged the public to wear masks — although he has rarely worn one in public.

Meanwhile, Republicans in the Senate are scrambling to put together a package for the next COVID-19 relief bill, facing a July 31 deadline, when some of the benefits passed in the spring expire. House Democrats passed their bill in May.

This week’s panelists are Julie Rovner of Kaiser Health News, Joanne Kenen of Politico, Margot Sanger-Katz of The New York Times and Tami Luhby of CNN.

Among the takeaways from this week’s podcast:

  • Although Trump’s renewed emphasis on COVID-19 has surprised some of his critics, it may persuade his supporters to take actions promoted by public health officials. Trump’s emphasis on the importance of face coverings, perhaps coupled with the rising number of cases in parts of the country, could convince people who were otherwise dismissive of masks. People who do not necessarily trust public health officials may listen to Trump.
  • Republicans on Capitol Hill are in disarray on how to approach the next coronavirus relief bill. They are not in lockstep with the White House and are not supporting Trump’s call for a payroll tax cut.
  • One reason members of Congress are not eager to cut the payroll taxes is that the economic downturn has spurred concerns the Medicare and Social Security trust funds are being depleted faster than expected. However, analysts point out that when employment rises again, some of those concerns could dissipate.
  • A key sticking point in the economic relief package is whether to extend the bump in unemployment benefits that Congress approved in the spring. Lawmakers are facing a hard deadline on the issue because that money runs out next week, and the prohibition on evictions that was also part of an earlier COVID-19 relief bill ends even sooner. With rent, mortgages and other bills coming due Aug. 1, unemployed consumers could face a tough beginning of the month.
  • The Food and Drug Administration has approved limited use of pool testing for COVID-19. That allows approved labs to put together a small number of tests to run at once, thus conserving some of the materials needed for the process. If the pool tests positive, then those people whose results were pooled have to be tested again individually. The efforts have limited usefulness when rates of transmission are high in a community, but they may be helpful in specific settings, such as schools or workplaces.
  • New data shows that opioid addiction ticked back up in 2019, after a slight decline. Part of the problem is the growing use of the powerful — and dangerous — drug fentanyl. Economic woes also play a role. Addiction is often referred to as an epidemic of despair.
  • Although it’s unlikely the judicial system will overrule the administration’s efforts to bolster short-term insurance plans — which are generally less expensive but don’t offer as much protection for consumers as policies sold on the Affordable Care Act’s marketplaces — they could be circumvented if Democrats take over the White House. Even still, Democrats would likely have to find a way to make ACA plans more affordable.

 

 

 

 

 

Administration’s talking health care again, with 2020 in mind

https://www.politico.com/news/2020/07/26/trumps-health-care-again-with-2020-election-381473?utm_source=ActiveCampaign&utm_medium=email&utm_content=Republicans+Roll+Out+%241+Trillion+Coronavirus+Relief+Plan&utm_campaign=TFT+Newsletter+07272020

Tell us: How has Trump handled healthcare in his first 100 days ...

Polls show voters say Joe Biden would handle the issue better. And Trump is running short on options to make concrete changes before November.

President Donald Trump is suddenly talking about health care again.

He signed several executive orders on drug pricing on Friday. He vowed to unveil some new health plan by the end of next week, although he hasn’t provided specifics or an explanation of how he’ll do it. His aides are touting a speech in which Trump will lay out his health care vision. White House counselor to the president Kellyanne Conway has been calling Trump “the health care president.”

Yet it’s unlikely to amount to much in terms of policy ahead of the election. There’s almost no chance Congress will enact any legislation on the issue before November and policy specialists say the executive orders in question will make changes only at the margins — if they make any changes at all. Trump has also previously vowed to roll out a grand health care plan without following through.

That leaves Trump with mostly rhetorical options — even if he insists otherwise — cognizant that voters consistently rank health care as a top priority and say Joe Biden, Trump’s presumptive 2020 rival, would handle the issue better than the president. Meanwhile, Trump is running for reelection having not replaced Obamacare or presented an alternative — all while urging the Supreme Court to overturn the decade-old health law. And millions of Americans are currently losing their health insurance as the coronavirus-gripped economy sputters.

“I think politically, the main objective will be to have something he can call a plan, but it will be smaller than a plan. Just something that he can talk about,” said Drew Altman, president and CEO of the Kaiser Family Foundation, a nonpartisan health policy organization. “But it’s almost inconceivable that anything can be delivered legislatively before the election.”

Trump has long stumped on his pledges to kill Obamacare, the law his predecessor implemented that expanded Americans’ access to health insurance, set baseline standards for coverage, introduced penalties for not having insurance and guaranteed coverage for preexisting conditions. But conservatives say the law introduced too many mandates and drove up costs.

But after winning election in 2016, Trump failed to overturn the law in Congress — or even offer an agreed upon alternative to the law — despite holding the majority in both chambers on Capitol Hill. Democrats then retook the House in the 2018 midterms, essentially ending any chances the law, formally known as the Affordable Care Act, would be repealed.

Even some conservatives said the ongoing failure to present a concrete replacement plan is helping the Democrats politically.

Republicans, said Joe Antos, a health expert at the conservative American Enterprise Institute, “spent basically 2010 to today arguing that the ACA is no good. After 10 years, clearly there are some problems with starting all over again. I haven’t detected very strong interest, at least among elected officials, in revisiting that.”

But the coronavirus pandemic has added pressure to address health care costs, and Trump has lagged behind Biden on his handling of the issue in polls. Fifty seven percent of registered voters recently polled by Quinnipiac said Biden would do a better job on health care than Trump, while only 35 percent approved of Trump’s handling of health care as president. And on the issue of affordability, a CNBC poll found 55 percent of battleground voters favored Biden and the Democrats, compared with 45 percent who preferred Trump and the Republicans.

“At this point, there are two huge issues, jobs and the economy, and health care, i.e., the coronavirus. If anything that’s simply been magnified,” said David Winston, a Republican pollster and strategist. “Given the fact that it’s one of the top issues, it’s not like there’s a choice but to talk about it. If candidates aren’t making statements and proposing solutions around that, it’s a requirement. Both candidates have to address it.”

Biden has campaigned on expanding Obamacare while also promising to implement a “public option” similar to Medicare, which is government-run health insurance for seniors. On drug pricing, he and Trump embrace some of the same ideas, like allowing the safe importation of drugs from other countries where they are cheaper. Biden also supports direct Medicare negotiation of drug prices, a Democratic priority that Trump supported during the 2016 campaign before reversing course.

“Donald Trump has spent his entire presidency working to take health care away from tens of millions of Americans and gut coverage for preexisting conditions,” said Andrew Bates, a Biden campaign spokesman. “If the Trump campaign wants to continue their pattern of highlighting the worst possible contrasts for Donald Trump, we certainly won’t stop them.”

The Trump administration insists it can point to several health care victories during Trump’s term.

Trump frequently notes the removal of the penalty for Americans who do not purchase insurance as a major victory, falsely claiming it is equivalent to overturning Obamacare.

Trump also signed an executive order last year to fight kidney disease to encourage home dialysis and increase the amount of kidney transplants, and he expanded telehealth medicine during the pandemic.

More recently, the U.S. Court of Appeals for the District of Columbia upheld a Trump administration rule expanding the availability of short-term health plans, which Trump has touted as an alternative to Obamacare but Democrats deride as “junk.” The plans are typically cheaper than Obamacare coverage because they don’t provide the same level of benefits or consumer protections for preexisting conditions.

A federal judge in June similarly upheld another Trump administration rule requiring hospitals to disclose the prices they have negotiated with insurers. Price transparency in the health care system has long been a significant issue, with Americans rarely having clarity over how much their treatments will cost ahead of time. Trump called the win “bigger than health care itself,” in an apparent reference to Obamacare. It’s unclear whether transparency will force down health care prices, and hospitals opposing the rule have appealed the judge’s decision.

And on Friday at the White House, Trump held an event to sign four executive orders aimed at slashing drug pricing. The move aimed to tackle a largely unfulfilled signature campaign promise — that he would stop pharmaceutical companies from “getting away with murder.”

“We are ending the sellouts, betrayals and broken promises from Washington,” Trump said Friday.“You have a lot of broken promises from Washington.”

But the orders appeared largely symbolic for now, as they were not immediately enforceable, contained notable caveats and may not be completed before the election anyway. For instance, an order requiring drugmakers to pass along any discounts directly to seniors requires the health secretary to confirm the plan won’t result in higher premiums or drive up federal spending. But the White House had shelved that plan last summer over worries the move might hike seniors’ Medicare premiums ahead of the election and cost taxpayers $180 billion over the next decade.

Conway disputed that Trump had not made progress on issues like drug pricing.

“President Trump is directing the development of therapeutics and vaccines, has delivered lower prescription drug costs, increased transparency in pricing for consumers and is committed to covering preexisting conditions and offering higher quality health care with lower costs and more choices,” she said.

Yet a number of Trump’s other health care initiatives have faced hurdles — especially amid the coronavirus pandemic.

The opioid crisis, which the president had touted as a top priority and campaigned on in 2016, is getting worse. Drug overdose deaths hit a record high in 2019 and federal and state data shows they are skyrocketing in 2020.

“The overdose epidemic will not take a back seat simply because Covid-19 has hit us hard, and that needs to be reflected in policy,” said Andrew Kessler, founder and principal of Slingshot Solutions, a behavioral health consulting firm.

The president’s plan to end HIV by 2030 has similarly receded during the pandemic. And Trump’s proposal on improving kidney care — an issue that affects roughly 15 percent of American adults — is still in its early stages and will not be finalized until next year.

 

 

 

BANKS PRESSURE HEALTH CARE FIRMS TO RAISE PRICES ON CRITICAL DRUGS, MEDICAL SUPPLIES FOR CORONAVIRUS

https://theintercept.com/2020/03/19/coronavirus-vaccine-medical-supplies-price-gouging/

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IN RECENT WEEKS, investment bankers have pressed health care companies on the front lines of fighting the novel coronavirus, including drug firms developing experimental treatments and medical supply firms, to consider ways that they can profit from the crisis.

The media has mostly focused on individuals who have taken advantage of the market for now-scarce medical and hygiene supplies to hoard masks and hand sanitizer and resell them at higher prices. But the largest voices in the health care industry stand to gain from billions of dollars in emergency spending on the pandemic, as do the bankers and investors who invest in health care companies.

Over the past few weeks, investment bankers have been candid on investor calls and during health care conferences about the opportunity to raise drug prices. In some cases, bankers received sharp rebukes from health care executives; in others, executives joked about using the attention on Covid-19 to dodge public pressure on the opioid crisis.

Gilead Sciences, the company producing remdesivir, the most promising drug to treat Covid-19 symptoms, is one such firm facing investor pressure.

Remdesivir is an antiviral that began development as a treatment for dengue, West Nile virus, and Zika, as well as MERS and SARS. The World Health Organization has said there is “only one drug right now that we think may have real efficacy in treating coronavirus symptoms” — namely, remdesivir.

The drug, though developed in partnership with the University of Alabama through a grant from the federal government’s National Institutes of Health, is patented by Gilead Sciences, a major pharmaceutical company based in California. The firm has faced sharp criticism in the past for its pricing practices. It previously charged $84,000 for a yearlong supply of its hepatitis C treatment, which was also developed with government research support. Remdesivir is estimated to produce a one-time revenue of $2.5 billion.

During an investor conference earlier this month, Phil Nadeau, managing director at investment bank Cowen & Co., quizzed Gilead Science executives over whether the firm had planned for a “commercial strategy for remdesivir” or could “create a business out of remdesivir.”

Johanna Mercier, executive vice president of Gilead, noted that the company is currently donating products and “manufacturing at risk and increasing our capacity” to do its best to find a solution to the pandemic. The company at the moment is focused, she said, primarily on “patient access” and “government access” for remdesivir.

“Commercial opportunity,” Mercier added, “might come if this becomes a seasonal disease or stockpiling comes into play, but that’s much later down the line.”

Steven Valiquette, a managing director at Barclays Investment Bank, last week peppered executives from Cardinal Health, a health care distributor of N95 masks, ventilators and pharmaceuticals, on whether the company would raise prices on a range of supplies.

Valiquette asked repeatedly about potential price increases on a variety of products. Could the company, he asked, “offset some of the risk of volume shortages” on the “pricing side”?

Michael Kaufmann, the chief executive of Cardinal Health, said that “so far, we’ve not seen any material price increases that I would say are related to the coronavirus yet.” Cardinal Health, Kaufman said, would weigh a variety of factors when making these decisions, and added that the company is “always going to fight aggressively to make sure that we’re getting after the lowest cost.”

“Are you able to raise the price on some of this to offset what could be some volume shortages such that it all kind of nets out to be fairly consistent as far as your overall profit matrix?” asked Valiquette.

Kaufman responded that price decisions would depend on contracts with providers, though the firm has greater flexibility over some drug sales. “As you have changes on the cost side, you’re able to make some adjustments,” he noted.

The discussion, over conference call, occurred during the Barclays Global Healthcare Conference on March 10. At one point, Valiquette joked that “one positive” about the coronavirus would be a “silver lining” that Cardinal Health may receive “less questions” about opioid-related lawsuits.

Cardinal Health is one of several firms accused of ignoring warnings and flooding pharmacies known as so-called pill mills with shipments of millions of highly addictive painkillers. Kaufmann noted that negotiations for a settlement are ongoing.

Owens & Minor, a health care logistics company that sources and manufactures surgical gowns, N95 masks, and other medical equipment, presented at the Barclays Global Healthcare Conference the following day.

Valiquette, citing the Covid-19 crisis, asked the company whether it could “increase prices on some of the products where there’s greater demand.” Valiquette then chuckled, adding that doing so “is probably not politically all that great in the sort of dynamic,” but said he was “curious to get some thoughts” on whether the firm would consider hiking prices.

The inquiry was sharply rebuked by Owens & Minor chief executive Edward Pesicka. “I think in a crisis like this, our mission is really around serving the customer. And from an integrity standpoint, we have pricing agreements,” Pesicka said. “So we are not going to go out and leverage this and try to ‘jam up’ customers and raise prices to have short-term benefit.”

AmerisourceBergen, another health care distributor that supplies similar products to Cardinal Health, which is also a defendant in the multistate opioid litigation, faced similar questions from Valiquette at the Barclays event.

Steve Collis, president and chief executive of AmerisourceBergen, noted that his company has been actively involved in efforts to push back against political demands to limit the price of pharmaceutical products.

Collis said that he was recently at a dinner with other pharmaceutical firms involved with developing “vaccines for the coronavirus” and was reminded that the U.S. firms, operating under limited drug price intervention, were among the industry leaders — a claim that has been disputed by experts who note that lack of regulation in the drug industry has led to few investments in viral treatments, which are seen as less lucrative. Leading firms developing a vaccine for Covid-19 are based in Germany, China, and Japan, countries with high levels of government influence in the pharmaceutical industry.

AmerisourceBergen, Collis continued, has been “very active with key stakeholders in D.C., and our priority is to educate policymakers about the impact of policy changes,” with a focus on “rational and responsible discussion about drug pricing.”

Later in the conversation, Valiquette asked AmerisourceBergen about the opioid litigation. The lawsuits could cost as much as $150 billion among the various pharmaceutical and drug distributor defendants. Purdue Pharma, one of the firms targeted with the opioid litigation, has already pursued bankruptcy protection in response to the lawsuit threat.

“We can’t say too much,” Collis responded. But the executive hinted that his company is using its crucial role in responding to the pandemic crisis as leverage in the settlement negotiations. “I would say that this crisis, the coronavirus crisis, actually highlights a lot of what we’ve been saying, how important it is for us to be very strong financial companies and to have strong cash flow ability to invest in our business and to continue to grow our business and our relationship with our customers,” Collis said.

The hope that the coronavirus will benefit firms involved in the opioid crisis has already materialized in some ways. New York Attorney General Letitia James announced last week that her lawsuit against opioid firms and distributors, including Cardinal Health and AmerisourceBergen, set to begin on March 20, would be delayed over coronavirus concerns.

MARKET PRESSURE has encouraged large health care firms to spend billions of dollars on stock buybacks and lobbying, rather than research and development. Barclays declined to comment, and Cowen & Co. did not respond to a request for comment.

The fallout over the coronavirus could pose potential risks for for-profit health care operators. In Spain, the government seized control of private health care providers, including privately run hospitals, to manage the demand for treatment for patients with Covid-19.

But pharmaceutical interests in the U.S. have a large degree of political power. Health and Human Services Secretary Alex Azar previously served as president of the U.S. division of drug giant Eli Lilly and on the board of the Biotechnology Innovation Organization, a drug lobby group.

During a congressional hearing last month, Azar rejected the notion that any vaccine or treatment for Covid-19 should be set at an affordable price. “We would want to ensure that we work to make it affordable, but we can’t control that price because we need the private sector to invest,” said Azar. “The priority is to get vaccines and therapeutics. Price controls won’t get us there.”

The initial $8.3 billion coronavirus spending bill passed in early March to provide financial support for research into vaccines and other drug treatments contained a provision that prevents the government from delaying the introduction of any new pharmaceutical to address the crisis over affordability concerns. The legislative text was shaped, according to reports, by industry lobbyists.

As The Intercept previously reported, Joe Grogan, a key White House domestic policy adviser now serving on Donald Trump’s Coronavirus Task Force, previously served as a lobbyist for Gilead Sciences.

“Notwithstanding the pressure they may feel from the markets, corporate CEOs have large amounts of discretion and in this case, they should be very mindful of price gouging, they’re going to be facing a lot more than reputational hits,” said Robert Weissman, president of public interest watchdog Public Citizen, in an interview with The Intercept.

“There will be a backlash that will both prevent their profiteering, but also may push to more structural limitations on their monopolies and authority moving forward,” Weissman said.

Weissman’s group supports an effort led by Rep. Andy Levin, D-Mich., who has called on the government to invoke the Defense Production Act to scale up domestic manufacturing of health care supplies.

There are other steps the government can take, Weissman added, to prevent price gouging.

“The Gilead product is patent-protected and monopoly-protected, but the government has a big claim over that product because of the investment it’s made,” said Weissman.

“The government has special authority to have generic competition for products it helped fund and prevent nonexclusive licensing for products it helped fund,” Weissman continued. “Even for products that have no connection to government funding, the government has the ability to force licensing for generic competition for its own acquisition and purchases.”

Drug companies often eschew vaccine development because of the limited profit potential for a one-time treatment. Testing kit companies and other medical supply firms have few market incentives for domestic production, especially scaling up an entire factory for short-term use. Instead, Levin and Weissman have argued, the government should take direct control of producing the necessary medical supplies and generic drug production.

Last Friday, Levin circulated a letter signed by other House Democrats that called for the government to take charge in producing ventilators, N95 respirators, and other critical supplies facing shortages.

The once inconceivable policy was endorsed on Wednesday when Trump unveiled a plan to invoke the Defense Production Act to compel private firms to produce needed supplies during the crisis. The law, notably, allows the president to set a price ceiling for critical goods used in an emergency.

 

 

 

 

The most expensive health care option of all? Do nothing.

https://www.politico.com/news/2020/01/09/medicare-for-all-health-care-096367?utm_source=The+Fiscal+Times&utm_campaign=b67cf54986-EMAIL_CAMPAIGN_2020_01_09_10_31&utm_medium=email&utm_term=0_714147a9cf-b67cf54986-390702969

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‘Medicare for all’ debate sidesteps cost of current system.

The projected multitrillion-dollar cost of “Medicare for All” has pitted Democratic presidential candidates against each other as they argue about the feasibility of single-payer health care.

But the reality is the current health system may cost trillions more in the long run and be less effective in saving lives.

Spending on Medicare, Medicaid, private health insurance and out-of-pocket expenses is projected to hit $6 trillion a year — and $52 trillion over the next decade. At the same time, the number of people with insurance is dropping and Americans are dying younger.

Sen. Bernie Sanders and other single-payer advocates say Medicare for All would cost the government far less — between $20 trillion and $36 trillion over a decade — by slashing overhead, eliminating out-of-pocket costs and empowering federal officials to bargain directly with hospitals and drugmakers. But the streamlined system would have to care for millions of currently uninsured people at a significant cost to taxpayers, and experts disagree whether it would actually save money in the long run.

Centrist Democrats are pushing narrower plans that would, among other things, expand tax credits for people just above the Obamacare subsidy threshold. Virtually no one is arguing for maintaining the status quo, but that’s precisely what could happen given that congressional gridlock has stymied even popular, and bipartisan, causes like halting surprise medical bills.

“It’s really hard to see anything breaking through, especially when the industry interests and the money they’re willing to spend on lobbying and campaign contributions is just mind-boggling,” said Sabrina Corlette, a researcher at Georgetown University’s Center on Health Insurance Reforms. “And, without question, we are on an unsustainable trajectory.”

With Medicare for All and its price tag likely to come up in the next Democratic debate Jan. 14 in Iowa, here are five of the costliest consequences of inaction:

National health spending keeps rising

The Centers for Medicare and Medicaid Services estimates that nationwide health spending will hit $6 trillion a year by 2027 absent any changes in law. That would be nearly a fifth of the economy. In total, the United States is slated to spend about $52 trillion over the coming decade.

The cost drivers include hospitals, physician and clinical services and prescription drugs. Some local health systems have become monopolies that can largely set prices as they please — leading to higher premiums and more out-of-pocket spending for consumers.

“Even the biggest insurance plans are not big enough to bargain down the cost of services, and they don’t have an incentive to,” said Wendell Potter, a former Cigna executive-turned whistleblower and single-payer advocate.

An aging population is driving up Medicare spending, but the rising cost of private insurance is the biggest factor. A recent Kaiser Family Foundation analysis found per capita spending for private insurance grew by nearly 53 percent over the last decade, or more than double the hike in per capita Medicare spending.

More people will be uninsured

The Census Bureau reported in September that the number of Americans without insurance grew by 2 million people since 2017 — the first increase in nearly a decade. Even with a healthy economy and low unemployment, more than 27 million people weren’t covered at any point last year. That could grow to 35 million by 2029, per the Congressional Budget Office, under current law.

The number of people enrolling in the Obamacare marketplace has declined, and more people are dropping employer-sponsored insurance due to cost and other concerns.

Part of this is President Donald Trump’s doing — the administration has slashed efforts to push Obamacare enrollment and rolled back the massive marketing effort that the Obama administration rolled out for years.

There are also more than 400,000 additional uninsured children than just two years ago — and 4 million in all — and states that haven’t expanded Medicaid are seeing the biggest spikes.

“What we also miss in the debate is the number of people temporarily uninsured, who miss open enrollment, who are between jobs, who fall through the cracks,” said Adam Gaffney, a Harvard Medical School researcher and the president of Physicians for a National Health Program. “I see people all the time in my practice in that situation who don’t fill prescriptions and experience serious complications.”

Going without insurance hits patients and health care providers: Average hospital spending on care for the uninsured was $13 million in 2018 up roughly 3 percent annually since 2016.

Coverage will be skimpier

As the cost of health care has skyrocketed, insurance companies have squeezed patients, charging higher premiums, deductibles and co-pays, and creating narrow networks of providers and aggressively billing for out-of-network care.

Since 2009, the amount workers have had to pay for health insurance has increased 71 percent, while wages have only risen 26 percent over that time.

More than 80 percent of workers now have to pay a minimum amount out of pocket before insurance kicks in — and the amount of that deductible has doubled over the last 10 years, now standing at an average of $1,655, though many workers have to pay a lot more.

These costs are putting care out of reach for millions.

new Gallup poll found that a full quarter of adults have put off treatment for a serious medical condition due to the cost — the highest since Gallup began asking the question three decades ago. A full third say they’ve delayed or deferred some kind of health care service over the past year. Another Gallup and West Help survey found that 34 million people know at least one friend or family member who died over the past five years after skipping treatment due to costs.

 

Needed drugs will become more out of reach

U.S. patients pay vastly more for prescription drugs than people in other developed countries and the disparity is set to grow. The United States spent $1,443 per person on prescription drugs in 2018, while other developed countries fell somewhere between $466 and $939.

In just five years, national spending on prescription drugs increased 25 percent, according to the Government Accountability Office, and CMS expects that increase to “accelerate” over the next several years.

Increasingly, patients are responding by forgoing their medications. Gallup found in November that nearly 23 percent of adults — roughly 58 million people — said they haven’t been able to “pay for needed medicine or drugs that a doctor prescribed” over the past year.

This widespread inability to take needed medication, a government-funded study found last year, is responsible for as much as 10 percent of hospital admissions. And the Centers for Disease Control and Prevention estimates that medication nonadherence accounts for somewhere between $100 and $300 billion in national health spending every year.

 

Americans will continue to get sicker and die younger

The cost of maintaining the status quo is evident not only in dollars but in human lives.

Life expectancy in the United States has declined over the last three years, even as other developed countries around the world saw improvements.

Though the United States spends nearly twice as much on health care as other high-income countries, there’s been a stark increase in mortality between the ages of 19 and 64, with drug overdoses, alcohol abuse, suicide and organ diseases driving the trend. It’s cut across race and gender with the worst effects felt in rural areas.

The opioid epidemic only accounts for a fraction of the problem. The National Research Council found that the United States has higher mortality rates from most major causes of death than 16 other high-income countries.

Researchers at USC estimate that if these trends continue, it would take the United States more than a century to reach the average life expectancy levels other countries hit in 2016.

 

 

Today’s health problems are tomorrow’s health crises

https://www.axios.com/public-health-crisis-trends-future-c24f9720-4657-45f2-ab73-05a8bb9a4d3e.html

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The health troubles we’re seeing now — especially among young people — will continue to strain the system for years and even decades to come.

The big picture: Rising obesity rates now will translate into rising rates of type 2 diabetes and heart disease. The costs of the opioid crisis will continue to mount even after the acute crisis ends. And all of this will strain what’s already the most expensive health care system in the world.

By the numbers: 18% of American kids are now obese, according to new CDC data. So are roughly 40% of adults. And it’s projected to get worse.

  • That helps explain why diabetes rates are also rising, and why roughly 30% of adults have high blood pressure.

Why it matters: More obese children means there will be more adults down the road with chronic conditions like diabetes — which can’t be cured, only managed — and these diseases in turn increase the risk of further complications, such as kidney disease and stroke.

  • Diabetes roughly doubles your lifetime health care bills, according to the CDC, and costs the U.S. a total of $245 billion per year.
  • As the price of insulin continues to skyrocket, the disease only gets harder for patients to manage, if they can afford treatment at all.

We’re only beginning to see the full costs of the opioid crisis, even though it has raged for years.

  • A White House report earlier this week pegged the cost of the epidemic at a staggering $696 billion last year alone, including the cost of productivity lost to addiction.
  • The tide has only barely begun to turn on overall overdose deaths — they still numbered around 68,000 last year.
  • And many survivors of the epidemic will face long-term health costs. Addiction recovery can be a lifelong process requiring sustained investments. It has also led to skyrocketing rates of Hepatitis C — some states have seen their infection rates rise by more than 200% over the past decade.

Groundbreaking new treatments offer the first-ever cure for Hepatitis C, but at price tags so high that states are experimenting with entirely new ways of paying for the drugs, fearing the status quo simply can’t bear these costs all at once.

The bottom line: The flaws in the U.S. health care system compound one another.

  • They reward doctors and hospitals for performing more treatment on sick people, and those treatments are expensive. That leaves big gaps in prevention, which drives the need for more expensive treatment.
  • That’s how we ended up with the world’s most expensive health care system, but without a particularly healthy population to show for it. And that trajectory isn’t changing.

 

 

 

 

Purdue Pharma, facing thousands of lawsuits and bankruptcy, wants to pay ‘certain employees’ $34 million in bonuses

https://www.washingtonpost.com/nation/2019/09/19/purdue-pharma-facing-thousands-lawsuits-bankruptcy-wants-pay-certain-employees-million-bonuses/?fbclid=IwAR0r6Psj2gpALR0iJZAv4o8ZYLxPDv6UjGZKLvxMwVIlUF9kOcl1LY5sGlM

People enter the U.S. District Court in White Plains, N.Y., Tuesday, before a bankruptcy hearing for Purdue Pharma. The company is asking a bankruptcy judge to allow it to pay $34 million in bonuses to "certain employees."

Officials at troubled drugmaker Purdue Pharma say “certain employees” should be paid more than $34 million in bonuses for meeting and exceeding goals over the last three years, even though the company is facing thousands of lawsuits over its role in the nation’s opioid crisis and earlier this week filed for bankruptcy.

In a legal filing, attorneys for Purdue Pharma asked a judge to authorize millions in payments to employees who have met “target performance goals.”

It is not clear from the company filings why employees would be eligible for bonuses, because, while the bonuses are supposed to be partly contingent on the company’s financial performance, the company has filed for bankruptcy.

At a bankruptcy court hearing in White Plains, N.Y., on Tuesday, Paul K. Schwartzberg, an attorney for the U.S. Trustee, raised objections to some of the bonuses. While it is typical for companies in bankruptcy to try to pay employees as a firm seeks to regain its financial footing, the Purdue Pharma bonuses go “way beyond” what is typical, he said.

The company is widely blamed for fueling the opioid epidemic because of allegedly misleading sales tactics it used to push physicians to prescribe millions of doses of its OxyContin painkiller. It faces thousands of lawsuits from cities, states and others affected by the opioid crisis, which claimed more than 200,000 lives in the past two decades.

“That $34 million is owed to the victims of the opioid epidemic, and every last cent should be spent on addiction science, treatment and recovery,” Connecticut Attorney General William Tong said in a statement to The Washington Post. “Purdue and the Sacklers still don’t seem to comprehend the pain and suffering they have caused. While I am sympathetic to the workers at Purdue, many of whom live in my hometown and state and had nothing to do with the egregious actions of their employer, this not business as usual.”

The attorneys for Purdue Pharma did not specify which of its 700 employees would be eligible for the bonuses, except that the incentives would not be available to “insiders” or any top executives involved in the company’s “strategic decision-making.” But other senior managers, who are often offered such incentive plans, could be eligible for the bonuses.

The number of employees eligible for the bonuses and the amounts of their rewards are unknown. But if the $34 million in bonuses were distributed equally to each of the 700 employees, each would receive about $50,000.

Company attorneys say the incentives are needed to retain key employees as it seeks to transform itself into a public trust aimed at delivering addiction remedies. Since 2018, about a quarter of the company’s “top tier” employees have left, they said.

“These employees have highly coveted skills in the industry and the company is not an easy place to work right now,” Eli J. Vonnegut, an attorney representing Purdue Pharma, said at the bankruptcy hearing. It “would be very difficult to attract new talent were the company to lose its current employees. With all the negative publicity, many employees are concerned about the economic risks that they are taking by staying at Purdue.”

The employee bonuses are part of the company’s long-standing incentive programs, according to the company. It is asking the bankruptcy court’s permission to pay out $26.5 million under its “Annual Incentive Plan,” which covers one year of company and employee performance, and another $7.9 million under its long-term rewards plan, which covers the last three years.

Under both programs, the size of the bonuses would depend on employees’ work and the company’s performance.

The company filing described the bonuses as something that employees “have come to rely on as a part of their annual compensation.”

The company is also seeking $1.5 million a month to cover anticipated legal expenses of employees. More than 270 former employees already have been witnesses or defendants in pending litigation, the company said.

U.S. Bankruptcy Judge Robert D. Drain is expected to consider the bonuses in October.

“These people are highly compensated,” Schwartzberg said. “They can wait” until then.

 

 

 

Texas docs, pharmacists charged in alleged opioid pill mill scheme

https://www.healthcaredive.com/news/texas-docs-pharmacists-charged-in-alleged-opioid-pill-mill-scheme/563270/

Dive Brief:

  • The U.S. Department of Justice said Wednesday it charged 58 people in Texas in connection with their alleged roles in various schemes to defraud government health programs, including distributing and dispensing medically unnecessary opioids, billing Medicaid for non-emergency ambulance services that were never actually provided and paying kickbacks and laundering money through durable medical equipment companies.
  • The allegations involved multiple programs including Medicare, Medicaid, TRICARE, the Department of Labor-Office of Worker’s Compensation programs as well as private insurance companies.
  • Separately, DOJ brought charges against a total of 34 people for their alleged participation in Medicare and Medicaid fraud schemes in other states, including California, Arizona and Oregon. Seventeen of the people charged in those schemes were doctors or licensed medical professionals.

Dive Insight:

Created in 2007, the Medicare Fraud Strike Force​ has units operating in 23 districts, and has charged nearly 4,000 defendants who have collectively billed the Medicare program for more than $14 billion. It’s a joint effort between DOJ and HHS to deter healthcare fraud.

According to the most recent statistics, from January, the strike force has brought 2,117 criminal actions, secured 2,754 indictments and recovered $3.3 billion in connection with its investigations.

HHS declared the opioid crisis a national emergency in 2017. And the DOJ is increasingly focusing on fraud related to opioids, including going after medical professionals allegedly involved in the unlawful distribution of opioids and other prescription narcotics.

“Sadly, opioid proliferation is nothing new to Americans,” U.S. Attorney Ryan K. Patrick of the Southern District of Texas said in a statement announcing the charges. “What is new is the reinforced fight being taken to dirty doctors and shady pharmacists,” he said.

The coordinated healthcare fraud enforcement operation across Texas resulted in charges involving networks of “pill mill” clinics that led to $66 million in losses and the distribution of 6.2 million pills, the government said. Sixteen doctors and pharmacists were among those charged.

And that’s on top of last month, when the Health Care Fraud Unit’s Houston Strike Force charged dozens of people in a trafficking network that diverted more than 23 million oxycodone, hydrocodone and carisoprodol pills.

The Texas actions also involved healthcare fraud other than opioid diversion, including fraudulent physician orders for durable medical equipment, fraudulent claims for ambulance services and stealing protected healthcare information.

The separate actions in California, Arizona and Oregon involved schemes that ran the gamut from billing for medically unnecessary compounded drugs, unnecessary cardiac treatments and testing, billing for chiropractic services never provided and a hospice kickback scheme.