Drug companies seek removal of judge in landmark opioid case

https://www.washingtonpost.com/health/drug-companies-seek-removal-of-judge-in-landmark-opioid-case/2019/09/14/1609f69a-d6f6-11e9-9343-40db57cf6abd_story.html?wpisrc=nl_most&wpmm=1

Drug companies facing more than 2,000 lawsuits over their alleged roles in the opioid epidemic demanded Saturday that the federal judge overseeing the case step aside, questioning his impartiality because he has consistently urged both sides to settle the case.

The request comes after a series of rulings against the companies by U.S. District Judge Dan Aaron Polster in the landmark trial slated to begin Oct. 21.

“Defendants do not bring this motion lightly,” the lawyers wrote in a filing Saturday morning on behalf of some of the nation’s biggest drug distributors and retailers but no drug manufacturers. “Taken as a whole and viewed objectively, the record clearly demonstrates that recusal is necessary.”

The lawyers contended Polster has overstepped his authority and created the appearance of bias. They cited his statements since the beginning of the case encouraging settlement so that money for badly needed drug treatment and other services could go quickly to communities hard hit by the opioid epidemic.

With just two counties “seeking $8 billion in cash for so-called ‘abatement,’ the Court has determined that it, not a jury, has the discretion to decide how much money defendants may pay to government agencies for medical treatment and other addiction-related services and initiatives,” the drug companies wrote.

Polster could not be reached for comment. A telephone call to his assistant Saturday went unanswered.

Lawyers for the more than 2,000 cities, towns, counties and tribal communities suing the drug industry called the attempt to remove Polster a desperate move. The lead plaintiffs’ lawyers said in a statement they “remain confident the judiciary will swiftly respond to yet another attempt by the opioid defendants to delay the trial.”

The plaintiffs have demanded the drug companies, including manufacturers, distributors and retailers, pay billions of dollars for the damage they allegedly caused. Since 1999, more than 200,000 people have died of overdoses of prescription narcotics, and another 200,000 have died from overdoses of heroin and illegal fentanyl, according to government data.

Two Ohio counties, Cuyahoga and Summit, are scheduled to begin trial next month as test cases to determine how other plaintiffs and defendants may fare before a jury.

As of now, they would face off against drug distributors McKesson Corp., Cardinal Health, AmerisourceBergen and Henry Schein; manufacturers Johnson & Johnson and Teva Pharmaceuticals; and retail drugstore chain Walgreens.

Two law professors called the defendants’ motion unusual and saw little chance it would succeed.

The law that authorizes large, consolidated cases like this one — known as “multidistrict litigation” — explicitly recognizes that judges would use the opportunity to encourage settlements, said Carl Tobias, a professor at Richmond University School of Law.

“Judges overseeing MDLs are supposed to encourage settlement and most MDLs end with settlements” for the majority of plaintiffs, Tobias wrote in an email.

Alexandra Lahav, a professor at the University of Connecticut School of Law, agreed.

“It is a highly unusual motion and not one that I think can win,” she wrote in an email. “I am not sure what the strategy is behind bringing it, and filing on Saturday, other than public relations.”

She added, however, “I don’t think there is anything wrong with filing a non-frivolous motion to bring attention to an issue and start a conversation. Given the courts’ historic emphasis on settlement, I just don’t see how that conversation goes anywhere.”

This past week, Purdue Pharma, the company most widely blamed for its role in the crisis, announced a tentative settlement with all the municipalities and about half the state attorneys general who have separately sued members of the drug industry in state courts. If finalized, that agreement would remove Purdue from the first trial.

Ohio Attorney General Dave Yost (R), whose state backs the Purdue settlement, also has asked to halt the trial, saying the municipalities should allow states to take the lead in the litigation.

In the lead-up to the trial, Polster denied a series of motions filed by the companies seeking to throw out, or limit, the case against them. Those included a defense motion to dismiss arguments that the drug companies conspired with each other to protect their companies from enforcement actions by the Drug Enforcement Administration.

Polster also rejected a motion to dismiss the plaintiffs’ legal theory that the companies created a “public nuisance” by inundating communities across the nation with enormous amounts of pain pills. And he denied a defense motion to dismiss a strategy to pursue the case under the Racketeer Influenced and Corrupt Organizations Act, originally created to prosecute the Mafia.

This past week, Polster agreed to an unusual plan that would include 30,000 jurisdictions across the United States in any settlement, if they agreed to it. It is aimed at preventing more lawsuits and ensuring that communities everywhere get some money from any settlement.

In their motion, the drug distributors and retail chains said the crucial test is whether a reasonable person would conclude that Polster appeared biased against the defendants.

They cited Polster’s statements inside and outside court “evidencing a personal objective to do something meaningful to abate the opioid crisis, with the funding to be provided through defendants’ settlements,” as well as “numerous improper comments to the media and in public forums about the litigation.”

And they noted Polster’s “apparent prejudgment of the merits and outcome of the litigation and singular focus on, and substantial involvement in, settlement discussions.”

They also protested his decision to limit defendants to 12.5 hours apiece to present their cases during the upcoming trial.

Last month, an appellate court admonished some of the defendants for a legal attack on Polster over an unrelated question. The panel of appellate judges said their claim that Polster’s “assurances are not entitled to our respect because [he] has been deceptive or duplicitous … is a very serious allegation and we find no merit to it.”

 

 

Why is healthcare so expensive? This Johns Hopkins surgeon might have the answers

https://www.fiercehealthcare.com/hospitals-health-systems/why-healthcare-so-expensive-johns-hopkins-surgeon-might-have-answers?mkt_tok=eyJpIjoiTTJNMVpURTNNelJpTVRBeiIsInQiOiJEYTZVeG1LN2VxWEMzUXRTb3dQWWkrbDNKdHBnSzQ5NUpuZVZoXC9US1QzQVwvcUVDSU9mMHZLR2pwZWFcLzNkbk9XYTdPRUtTM2tRVU5oOXhhMXRhSFd5STFZY2VzVlo2UTl0cGxOZjdSMUROVjhZVFZNeXFrMWRZdEdIRVBFS0M2VyJ9&mrkid=959610

For a small group of vascular surgery centers in metropolitan Washington, D.C., it was local churches that turned out to be surprisingly lucrative.

It was at health screening fairs hosted by these houses of worship where Marty Makary, M.D., found surgeons drumming up business for pricey—and often unnecessary—leg stents. It’s among the collection of systemic and human examples Makary examines in his new book “The Price We Pay: What Broke American Health Care—and How to Fix It” as driving forces behind rising U.S. health costs.

Makary, a surgeon at Johns Hopkins and New York Times best-selling author, hits every segment of the market, from a health system in New Mexico that has sued 1 in 5 residents in town to a health insurance conference where brokers described over drinks why they usually aren’t helping employers get the best deal.

“Healthcare has adopted a business model that uses middlemen, price gouging and sometimes delivers care that can be inappropriate, and this bloated economy has a tremendous amount of waste,” Makary said. “So our research really asks the question: ‘What is the experience of the everyday American interfacing with our healthcare system?’”

I caught up with Makary recently to discuss some of the problems he highlights in his new book, which is being released Sept. 10, and some of his ideas on how we solve them.

FierceHealthcare: Why did you write this book?

Marty Makary: Hospitals are amazing places and there is a tremendous amount of public trust in hospitals. But I’ve been seriously concerned about the erosion of public trust by the price gouging and predatory billing practices that patients are describing all over America. Our research team found bills are marked up as much as 23 times higher than what hospitals will accept from Medicare. We kept hearing over and over again that, ‘No one is expected to pay these bills. Hospital CEOs assured me when I showed them inflated bills that nobody is expected to pay the sticker price.’ But that didn’t seem to match the stories we were hearing on the ground.

FH: One of the hospitals you highlight in this book in Carlsbad, New Mexico, had a practice of hiking prices and suing patients who were unable to pay. What did you find there?

MM: We decided to shift our research into the question: “Are Americans asked to pay the sticker price and if so, what happens when they can’t afford it?”

A woman sent me a message where not only was the bill inflated, but the care was—in her opinion, unnecessary—and the hospital had sued her. When I reached out, she said, “They’ve sued all my friends as well and garnished our paychecks.” I couldn’t believe this, and so I flew out to Carlsbad. The driver of the Chamber of Commerce taxi service that picked us up from the airport, the receptionist at the hotel, the waitress at the breakfast place, the clerk’s office staff, families in the courthouse: You couldn’t believe it. Everywhere you turned, people had been terrorized financially by this local community hospital. I thought: “Where is the spirit of medicine? Do these executives even know the consequences on the ground of these billing practices?”

FH: In the book, you mention many hospital executives don’t even know they’re suing patients.

MM: Oftentimes, there’s detachment. And when we’re detached from the consequences or problems, that’s when horrible things happen in societies historically. I found sometimes hospital executives, board members and certainly our research supports doctors not knowing about this practice. And when they find out, the clinicians are outraged. By and large, board members want it to stop … I think if you look at any major issue in the United States, whether it be race, poverty or healthcare, if we are not proximate to the problem, we tend to rationalize financial systems that enable the problem. In healthcare, what I’ve noticed is, when I would share these stories at conferences, other healthcare experts argued it was not a problem that was diabolical, they just weren’t proximate to the issue.

FH:  You also document that many hospitals are doing the right thing.

MM: Most hospitals try to do the right thing. But I think it tells us a lot about the practice of suing patients and that it’s unnecessary. When all the revenue generated from suing patients amounts to less than the amount of the CEO pay increase in one year, which is something we’ve seen, the argument that it’s essential to sue patients in order for the hospital to be sustainable melts away.

FH: But obviously, the problem is not just about hospitals, right?

MM: A lot of people are getting rich in healthcare. We’ve created tens of thousands of millionaires that are not patient-facing. If you look at the earnings on Wall Street of some of these healthcare companies, for example, UnitedHealth Group reported a 25% increase in earnings in a recent earnings report. How do earnings go up 25% in an actuarial insurance business? They said on their call it was in part due to their pharmacy benefit manager (PBM), a well-known middleman that profits from spread pricing and money games. Hospitals are on target this year for their highest margin in history—5.1% based on early 2019 data. At the same time rural hospitals are closing, large hospitals are making barrels of money. Although they are claiming razor-thin margins, the cost shift accounting is so sophisticated, that they can use their profit to buy new buildings, pay down debt, buy more real estate, increase executive pay. What we have right now is an arms race of profiteering in healthcare where all the stakeholders are making a lot of money except for one, and that’s the patient.

FH: In the book, you talk about efforts to address practice outliers like those vascular surgeons through the use of big data, which led to the creation of the “Improving Wisely” initiative. What did you do?

MM:  Most doctors do the right thing or always try to. But the fraction that are responding to the consumerist culture or the perverse incentives or are just not practicing state of the art care can cost the system a lot more money than those who aren’t … Instead of hammering doctors that do the right thing with reporting burdens and other hassles, we can shunt those resources to address outliers identified in the data using metrics endorsed by the experts in each specialty, and gold card the good doctors so they don’t have to deal with reporting hassles and the expense of the reporting hassles.

In studying the issue of inappropriate care and delivering measures of the appropriateness of care, we’ve been meeting with individual specialists around the country and many of these doctors are telling us about the practice pattern that a fraction of specialists in their field are doing that represents overuse. Our work called “Improving Wisely” partners with associations to send outlier physicians their data around a specialty-endorsed measure of overuse. What we’ve seen is, among doctors, among outlier physicians who see their data with a confidential dear doctor letter, that 83% reduce their pattern of overuse. The initial project two years ago that cost $150,000 has resulted in $27 million worth of savings. This is an example of a high consensus approach that results in real savings that you just don’t see in other areas. By and large, politicians are talking about different ways to fund the broken healthcare system and not ways to fix it. We need to talk about how to fix it.

FH: In the book, you really seem to try to take on everyone: doctors, hospitals, air ambulances, workplace wellness companies, PBMs.

MM:  Almost all the voices in healthcare are beholden to some special interest or stakeholder. We desperately need a global critique of how this system has gone awry and there’s a lot of finger-pointing going on right now, especially at the insurance companies and pharma. But the reality is, we all have a piece of this pie. I don’t think there’s really any one villain in the healthcare system. I don’t even think there’s much deliberate malfeasance that goes on. I think we have a system that’s largely run by people doing what they are told to do and they are doing it in a place where they may not be proximate to the hardship the system creates.

FH: So the big question: How do we fix the problems?

MM: For every problem I described, I tried to describe one of the most exciting disrupters in this space. With the pricing failure problem, I highlight the Free Market Medical Association and the individuals who are saying they are going to make all prices transparent and fair regardless of who’s paying whether it’s a patient or an insurance company. There’s one fair price. Keith Smith of the Surgery Center of Oklahoma is offering one fair true price. Not a sticker price but a true price, regardless of who’s paying. You look at MDsave and Clear Health Costs. They are offering ways for people to shop. If the government does nothing on healthcare, I’m still optimistic we are moving in the right direction because businesses in American are realizing that they’re getting ripped off on their healthcare and pharmacy plans. They’re increasingly doing direct contracting and looking closely at their health insurance benefits and pharmacy design and realizing there is a lot of money wasted.

One of the root issues in healthcare is the way we physicians are educated. It uses a model that’s highly flawed, relying highly on rote memorization of things that are easily available on the Internet today and omits training in effective communication, public policy and healthcare literacy. It turns out that many doctors feel paralyzed in fixing this broken system even as they’re suspicious of the waste in it. One of the goals of writing the book was creating healthcare literacy because we in the field are taught medical literacy but we’re never taught healthcare literacy. One of the exciting disrupters I had the privilege of spending time was the Sidney Kimmel Medical College (in Philadelphia). They have an academic standard in the admissions process. Once people meet that academic standard, everybody is considered based on their empathy, self-awareness and communication skills. It’s revolutionary as simple as it sounds. But they’re focusing on what matters.

 

 

 

 

US health care: An industry too big to fail

https://theconversation.com/us-health-care-an-industry-too-big-to-fail-118895

Image result for US health care: An industry too big to fail

As I spoke recently with colleagues at a conference in Florence, Italy about health care innovation, a fundamental truth resurfaced in my mind: the U.S. health care industry is just that. An industry, an economic force, Big Business, first and foremost. It is a vehicle for returns on investment first and the success of our society second.

This is critical to consider as presidential candidates unveil their health care plans. The candidates and the electorate seem to forget that health care in our country is a huge business.

Health care accounts for almost 20% of GDP and is a, if not the, job engine for the U.S. economy. The sector added 2.8 million jobs between 2006 and 2016, higher than all other sectors, and the Bureau of Labor Statistics projects another 18% growth in health sector jobs between now and 2026. Big Business indeed.

This basic truth separates us from every other nation whose life expectancy, maternal and infant mortality or incidence of diabetes we’d like to replicate or, better still, outperform.

As politicians and the public they serve grapple with issues such as prescription drug prices, “surprise” medical bills and other health-related issues, I believe it critical that we better understand some of the less visible drivers of these costs so that any proposed solutions have a fighting chance to deflect the health cost curve downward.

As both associate chief medical officer for clinical integration and director of the center for health policy at the University of Virginia, I find that the tension between a profit-driven health care system and high costs occupies me every day.

The power of the market

Housing prices are market-driven. Car prices are market-driven. Food prices are market-driven.

And so are health care services. That includes physician fees, prescription drug prices and non-prescription drug prices. So is the case for hospital administrator salaries and medical devices.

All of these goods or services are profit-seeking, and all are motivated to maximize profits and minimize the cost of doing business. All must adhere to sound business principles, or they will fail. None of them disclose their cost drivers, or those things that increase prices. In other words, there are costs that are hidden to consumers that manifest in the final unit prices.

To my knowledge, no one has suggested that Rolls-Royce Motor Cars should price its cars similarly to Ford Motor Company. The invisible hand of “the market” tells Rolls Royce and Ford what their vehicles are worth.

Prescription drugs pricing has different rules

Ford can (they won’t) tell you precisely how much each vehicle costs to produce, including all the component parts that they acquire from other firms. But this is not true of prescription drugs. How much a novel therapeutic costs to develop and bring to market is a proverbial black box. Companies don’t share those numbers. Researchers at the Tufts Center for the Study of Drug Development have estimated the costs to be as high as US$2.87 billion, but that number has been hotly debated.

What we can reliably say is that it’s very expensive, and a drug company must produce new drugs to stay in business. The millions of research and development(R&D) dollars invested by Big Pharma has two aims. The first is to bring the “next big thing” to market. The second is to secure the almighty patent for it.

U.S. drug patents typically last 20 years, but according to the legal services website Upcounsel.com: “Due to the rigorous amount of testing that goes into a drug patent, many larger pharmaceutical companies file several patents on the same drug, aiming to extend the 20-year period and block generic competitors from producing the same drug.” As a result, drug firms have 30, 40-plus years to protect their investment from any competition and market forces to lower prices are not in play.

Here’s the hidden cost punchline: concurrently, several other drugs in their R&D pipelines fail along the way, resulting in significant product-specific losses . How is a poor firm to stay afloat? Simple, really. Build those costs and losses into the price of the successes. Next thing you know, insulin is nearly US$1,500 for a 20-milliliter vial, when that same vial 15 years ago was about $157.

It’s actually a bit more complicated than that, but my point is that business principles drive drug prices because drug companies are businesses. Societal welfare is not the underlying use. This is most true in the U.S., where the public doesn’t purchase most of the pharmaceuticals – private individuals do, albeit through a third party, an insurer. The group purchasing power of 300 million Americans becomes the commercial power of markets. Prices go up.

The cost of doing business, er, treating

I hope that most people would agree that physicians provide a societal good. Whether it’s in the setting of a trusted health confidant, or the doctor whose hands are surgically stopping the bleeding from your spleen after that jerk cut you off on the highway, we physicians pride ourselves on being there for our patients, no matter what, insured or not.

Allow me to state two fundamental facts that often seem to elude patient and policymaker alike. They are inextricably linked, foundational to our national dialogue on health care costs and oft-ignored: physicians are among the highest earners in America, and we make our money from patients. Not from investment portfolios, or patents. Patients.

Like Ford or pharmaceutical giant Eli Lilly, physician practices also need to achieve a profit margin to remain in business. Similarly, there are hidden-to-consumer costs as well; in this case, education and training. Medical school is the most expensive professional degree money can buy in the U.S. The American Association of Medical Colleges reports that median indebtedness for U.S. medical schools was $200,000.00 in 2018, for the 75% of us who financed our educations rather than paying cash.
Our “R&D” – that is, four years each of college and medical school, three to 11 years of post doctoral training costs – gets incorporated into our fees. They have to. Just like Ford Motors. Business 101: the cost of doing business must be factored into the price of the good or service.

For policymakers to meaningfully impact the rising costs of U.S. health care, from drugs to bills to and everything in between, they must decide if this is to remain an industry or truly become a social good. If we continue to treat and regulate health care as an industry, we should continue to expect surprise bills and expensive drugs.

It’s not personal, it’s just…business. The question before the U.S. is: business-as-usual, or shall we get busy charting a new way of achieving a healthy society? Personally and professionally, I prefer the latter.

 

 

 

The fight over the future of our most expensive drugs

https://www.axios.com/the-fight-over-the-future-of-our-most-expensive-drugs-034b6e4d-b596-4f48-9b53-6e2c267e01e3.html

An illustration of a hammer and a concrete pill.

The market designed to create competition for biologics — typically our most expensive drugs — has been slow to take off, but some experts say that even its best-case scenario doesn’t do enough to lower drug prices.

Why it matters: While wonks debate the future of biosimilars in policy journals and on editorial pages, the argument is reflected in the political divide over whether enhanced drug competition or price regulation is the best way to address drug prices.

The big picture: Congress created the pathway for biosimilars to come to market knowing that they’d look different than small-molecule generics, and even their most ardent supporters say biosimilars will never achieve the steep discounts that generics do.

  • That’s because biosimilars are much harder to make than normal generics, meaning that drug companies have to charge enough to make their endeavor worthwhile.
  • Nevertheless, the Biosimilars Council says on its website that biosimilars could lead to more than $54 billion in savings over the next decade. A recent analysis by the Pacific Research Institute found that biosimilars could save $7.2 billion a year under the most optimistic modeled scenario.

Yes, but: Some experts are arguing that that’s not enough, and that biosimilars aren’t the best way to control biologic prices.

  • Last week, Memorial Sloan Kettering Cancer Center’s Peter Bach and MIT’s Mark Trusheim published an editorial in the Wall Street Journal arguing that biosimilars don’t produce enough savings and that the resources spent developing them would be better used to bring new, innovative drugs to market.
  • Bach and Trusheim proposed that the government instead regulate the price of older biologics after they’ve been on the market for a certain period of time, which they wrote could save around $50 billion a year.

The other side: Former FDA Commissioner Scott Gottlieb wrote an editorial in the WSJ yesterday in response, arguing that Congress should speed up the use and development of biosimilars instead of regulating prices.

  • “Among other dangers, [price regulation] could trigger shortages of the drugs. It would also discourage investment in manufacturing, as few drugmakers would want to produce complex drugs in perpetuity for little profit,” Gottlieb writes.

The bottom line: This argument isn’t just for the academics. The leading Democratic presidential candidates are also arguing for drug price regulation, a major shift left for the party.

  • “Price regulation may be a tough sell in some quarters, but it’s the best way to keep the promise of America’s extraordinary pharmaceutical industry alive,” Bach and Trusheim write.

 

 

 

The Big Pharma Takeover of Medical Cannabis

The Big Pharma Takeover of Medical Cannabis

Image result for The Big Pharma Takeover of Medical Cannabis

 

As evidence of cannabis’ many benefits mounts, so does the interest from the global pharmaceutical industry, known as Big Pharma. The entrance of such behemoths will radically transform the cannabis industry—once heavily stigmatized, it is now a potentially game-changing source of growth for countless companies.

Today’s infographic comes to us from CB2 Insights, and explores how and why the notorious Big Pharma are interested in the nascent cannabis industry.

Who are “Big Pharma”?

The term refers to some of the largest pharmaceutical companies in the world, considered especially influential as a group. To give a sense of their sheer size, the market cap of the top 10 Big Pharma companies is $1.7 trillion—Johnson & Johnson being the largest, with a market capitalization of $374 billion.

So far, Big Pharma has watched the cannabis industry from the sidelines, deterred by regulatory concerns. What we are seeing now is the sleeping giant’s takeover slowly intensifying as more patents, partnerships, and sponsored clinical trials come to fruition.

Could Cannabis be Sold Over the Counter?

The cannabis plant has been used in medicine for 6,000 years. However, there is still considerable debate around the role it plays in healthcare today. There are currently almost 400 active and completed clinical trials worldwide surrounding cannabidiol (CBD), a type of cannabinoid that makes up 40% of the cannabis plant’s extract.

Cannabis relies on CBD’s therapeutic properties, and recent studies suggest it may be useful in combating a variety of health conditions, such as:

  • Epilepsy
  • Schizophrenia
  • Multiple sclerosis
  • Migraines
  • Arthritis
  • Cancer side effects

As of 2019, 33 states and the District of Columbia have legalized cannabis for medical use. Its potential for pain management has led some experts to recommend it as an alternative to addictive painkillers, with one study of 13 states showing opiate-related deaths decreasing by over 33% in the six years since medical cannabis was legalized.

As the industry evolves, data is becoming increasingly important in understanding the potential of cannabis—both as a viable medical treatment, and as a recreational product. The shift away from anecdotal evidence towards big data will inform future policies, and give rise to a new era of consumer education.

Big Pharma’s Foray into Cannabis

Further legalization of cannabis will challenge Big Pharma’s bottom line, and poach more than $4 billion from pharma sales annually. In fact, medical cannabis sales are projected to reach $5.9 billion in 2019, from an estimated 24 million patients.

Seven of Canada’s top 10 cannabis patent holders are major multinational pharmaceutical companies, a trend that is not unique to Canada.

It comes as no surprise that many pharmaceutical giants have already formed strong partnerships with cannabis companies, such as Novartis and Tilray, who will develop and distribute medical cannabis together in legal jurisdictions around the world.

Data is the Missing Link

While the body of knowledge about the many uses of cannabis continue to grow, clinical evidence is key for widespread adoption.

Products backed by data will be a defining criteria for major companies to come into the market en masse. And ultimately, Big Pharma’s entry could accelerate public understanding and confidence in cannabis as a viable option for a range of ailments, and mark the next major milestone for the industry.

 

 

 

 

Conservatives buck Trump over worries of ‘socialist’ drug pricing

https://thehill.com/policy/healthcare/456457-conservatives-buck-trump-over-worries-of-socialist-drug-pricing?utm_source=&utm_medium=email&utm_campaign=24010

Image result for socialist drug pricing

Conservatives are growing increasingly uneasy with the Trump administration’s new drug pricing policy.

President Trump is desperately seeking an elusive political win in his efforts to lower prescription drug costs, but he faces a hard sell to conservative groups and GOP lawmakers as he touts ideas traditionally favored by Democrats and presidential candidate Sen. Bernie Sanders (I-Vt.).

In a rare break with Trump, conservatives are now pushing back against key administration policies and accusing the president of supporting what they call Sanders-style socialism.

The president has embraced importing drugs from Canada, as well as an international pricing policy that would bar Medicare from paying more than other countries for prescription drugs.

The moves are designed to co-opt Democratic talking points and position Trump as a populist champion of the free market.

Trump has made lowering drug prices a top priority of his presidency, but he has suffered some high-profile setbacks in recent weeks.

Drug importation and the international pricing caps proposal are the only remaining policies remaining that the White House can use to make a splash heading into 2020.

Trump has frequently railed against “global freeloading” and said he doesn’t think it’s fair that the U.S. subsidizes research and development in other countries.

Last year he went to the Department of Health and Human Services (HHS) and announced the plan to cap U.S. payments for expensive drugs, over the objections of some White House advisers.

Those objections later spread to include conservative groups.

Facebook ads this year from FreedomWorks, a conservative advocacy group, urged people to tell HHS Secretary Alex Azar to oppose “socialist-style price controls.”

Another ad warned the administration against “importing socialist European drug prices in America.”

Separately, a website sponsored by the American Conservative Union rails against the administration’s pricing index, calling it an experiment “directly out of the Bernie Sanders and Hillary Clinton government health care takeover playbook.”

In the GOP-controlled Senate, a bill backed by the administration is facing Republican opposition over a provision that would impose a limit on drug price increases in Medicare’s Part D prescription drug program.

The legislation would force drug companies to pay money back to the government if their prices rise faster than inflation.

The Senate Finance Committee approved the measure late last month in a 19-9 vote — all Democrats voted for it, and all nine “no” votes came from Republicans. Some GOP senators said they were concerned because they think the Medicare Part D provision violates traditional free-market principles.

The bill faces long odds of making it to the Senate floor without substantial changes.

“I’m not comfortable with putting price controls on drugs,” Sen. Pat Toomey (R-Pa.), a member of the Finance Committee, told The Hill.

Toomey offered an amendment to strip out the provision, which failed on a tie vote of 14-14. All but two Republicans voted for his amendment.

Aside from capping drug payments, Trump has also softened his stance on importing drugs from Canada. The administration last week announced a proposal that would set the groundwork for states or wholesalers to launch pilot programs to safely import drugs.

Shipping in drugs from abroad has long been a goal of progressives like Sanders, but has also won the support of libertarian-leaning conservatives like GOP Sens. Rand Paul (Ky.), Ted Cruz (Texas) and Mike Lee (Utah).

But with Trump looking for a win on drug pricing, political analysts and health experts argue he doesn’t necessarily care about gaining the support of conservatives.

“This is the administration throwing down a wild card,” said health care consultant Alex Shekhdar, founder of Sycamore Creek Healthcare Advisors. “In order to win in 2020, they need to take into consideration independents and anyone else who thinks drug prices are an issue.”

Joe Antos, a health care expert at the conservative American Enterprise Institute, said it doesn’t matter if the policies Trump is embracing are traditionally Democratic ones.

“Just because Democrats endorsed it in the past, doesn’t mean Trump can’t take ownership and call it his idea. He might not call them Republican ideas, but he’ll call them Donald Trump ideas,” Antos said.

But some GOP senators cautioned against letting Democrats play too much of a role.

After the Finance Committee advanced the drug-pricing bill, Chairman Chuck Grassley (R-Iowa) told reporters that Republicans don’t want Trump negotiating with Speaker Nancy Pelosi (D-Calif.).

A competing bill from House Democrats is far more sweeping than the Senate’s, and includes direct Medicare negotiation on drug prices.

“It seems to me that the Grassley-Wyden approach is a very moderate approach to what could come out,” Grassley said, referring to the bill backed by him and Sen. Ron Wyden (Ore.), the ranking Democrat on the Finance Committee.

But a stalled bill could still work to Trump’s advantage, according to Antos, who said the president doesn’t necessarily need to lower drug prices, he just needs to convince the public he is trying. 

In that sense, Antos argued, Republicans haven’t offered anything better, and they will eventually support whatever the administration does.

“Republicans don’t have any alternative ideas,” Antos said. “Trump has full control of Republicans in Congress, so there’s just not going to be any response other than going along with what comes along.”

 

 

 

Pentagon Sees Security Threat in China’s Drug-Supply Dominance

https://www.bloomberg.com/news/articles/2019-08-05/pentagon-sees-security-threat-in-china-s-drug-supply-dominance

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  • Defense Department official says risk ‘cannot be overstated’
  • China is the top maker of active pharmaceutical ingredients

The Trump administration sees the increasing use of Chinese-made active ingredients in drugs taken by U.S. troops and civilians as a national security risk.

China has become the world’s largest supplier of active pharmaceutical ingredients, or API, providing key components to drugmakers worldwide. But a yearlong recall of tainted heart drugs taken by millions of Americans is prompting U.S. national security officials to ask whether China’s growing role in the pharmaceutical supply chain could pose a threat to the health of military personnel.

“The national security risks of increased Chinese dominance of the global API market cannot be overstated,” Christopher Priest, the acting deputy assistant director for health care operations and Tricare for the Defense Health Agency, told a U.S.-China advisory panel last week in Washington.

The Defense Health Agency manages much of the health care of military members, including prescription drugs.

Concerns about the safety and efficacy of Chinese-made drugs are rising at a time of heightened trade tensions between Washington and Beijing. Last week, Trump unveiled plans for new tariffs on Chinese goods; China plans to halt imports of U.S. crops in response. The yuan sank on Monday against the dollar.

The National Security Council is looking into Chinese drug manufactuing and trying to identify the most at-risk medications, Priest told the U.S.-China Economic and Security Review Commission in Washington, without elaborating. The National Security Council declined to comment.

The Defense Health Agency is supposed to use drugs that comply with the Trade Agreements Act, a 1979 law that requires many federal purchases to be made in the U.S. or another compliant country. China isn’t on the approved list, but the agency has waivers for almost 150 drugs they otherwise wouldn’t be able to procure, Priest said. The TAA covers only finished products, not their components.

Many drugs taken by military members and civilians have active ingredients made in China. While drugmakers typically don’t disclose where every molecule in a pill comes from, the recall of contaminated blood-pressure drugs has shown that many of their active components originated in Chinese factories.

Rocket Fuel

Larry Wortzel, a member of the U.S.-China commission and a military retiree, said four of his blood-pressure medications were recalled in three months. Wortzel’s pills, versions of a drug called valsartan, were manufactured in India but had active ingredients from China.

“They were contaminated with rocket fuel,” Wortzel said. “I imagine active people have the same problem. This affects the readiness of our troops.”

The recalled valsartan contained a probable carcinogen known as NDMA, a manufacturing byproduct once used to make rocket fuel and also found in grilled and cured meats.

Priest called the recalls “a never-ending saga” and a “wake-up call.”

The recalls began in July 2018 with valsartan made by China’s Zhejiang Huahai Pharmaceutical Co. The U.S. Food and Drug Administration has largely blamed the company’s manufacturing process for creating the NDMA, which went undetected for as long as four years. Drugmakers in other countries who used similar processes have also had to recall blood-pressure pills.

Some valsartan purchased by the Defense Logistics Agency and later recalled was TAA-compliant, said Patrick Mackin, a spokesman for the DLA. The agency manages the supply chain for the U.S. military, including ensuring pharmaceuticals make their way to military treatment facilities. With valsartan in shortage, according to the FDA, the agency sought a TAA waiver for valsartan on July 15, Mackin said.

A Bloomberg investigation this year detailed doubts among U.S. health officials about the data generic-drug companies, including Zhejiang Huahai and others involved in the valsartan recalls, use to prove their products are safe and effective.

“We wouldn’t have our aircraft carriers and nuclear submarines built in China, and for very important medications, we really should look at what it takes to purchase based on value not just price,” Rosemary Gibson, the author of the book “China Rx,” told the commission. “We want cheap, we can buy cheap. But what’s missing from the whole equation is quality.”

Shortage Fears

Quality isn’t the only concern. Shortages could also arise from attempts by the Chinese to cut off supply, particularly amid the U.S.-China trade standoff.

“If China shut the door on exports, our hospitals would cease to function, so this has tremendous urgency,” Gibson said.

Priest said pharmaceutical companies should be compelled, using the buying power of the entire federal government, to maintain the infrastructure to make drugs without relying on countries like China.

The House Energy and Commerce Committee is investigating the FDA’s ability to police foreign manufacturing. The committee’s leaders asked the agency for more information on the valsartan recall in June, including about a dispute between senior officials and an agency inspector who raised red flags at Zhejiang Huahai more than a year before the NDMA was detected. The panel also asked the Government Accountability Office to look at the FDA’s oversight of foreign drug manufacturing.

“Shame on us for not paying attention to something so critical and assuming, which has been the orthodoxy for a long time, that the industry would regulate itself,” Benjamin Shobert, senior associate for international health at The National Bureau of Asian Research, told the commission.