Morning Briefing
Summaries of health policy coverage from major news organizations
Perspectives: Drugmakers Claim They're Pumping Profits Back Into Development But A Closer Look Shows Otherwise
The New York Times: How High Drug Prices Inflate C.E.O.S’ Pay
Drug company executives faced tough questions from Congress on Tuesday as they attempted to explain why, thanks to high drug prices, per capita spending on pharmaceuticals in the United States is double the average of other advanced countries. For decades, American drug makers have justified these high prices by asserting that the higher profits they generate fund research that accelerates the development of new medicines. Our data shows, however, that these companies spend every penny of their profits on distributions to shareholders in the forms of cash dividends and stock buybacks. (William Lazonick and Oner Tulum, 2/26)
The Wall Street Journal: Big Pharma Survives Hearings, But Watch Out
Tuesday’s Senate Finance Committee hearing on drug pricing didn’t cause much of a stir on Wall Street. Nevertheless, investors in drug stocks, as well as the drug supply chain, would be wise to note the tough tone. For the first time in recent memory, seven executives from major drug manufacturers testified about the high price of prescription drugs on Capitol Hill. (Charley Grant, 2/26)
Los Angeles Times: The Government Quashes A Nasty Stunt Used By Drug Makers To Keep Prescription Prices High
Most of the efforts out of Washington to fight rising drug prices amount to all-talk-no-action. But there’s one government campaign that has worked — and that the government just expanded. This is the government's attack on so-called pay-to-delay schemes, in which the marketer of a brand-name drug pays off generic drug makers to keep their competing products off the shelves, sometimes for years. The Federal Trade Commission, which has scored a string of courtroom victories against pay-to-delay in recent years, estimated in 2010 that these deals were costing consumers $3.5 billion a year. (Michael Hiltzik, 2/20)
Stat: Seniors In Medicare Part D Should Ignore PBMs' Alarm About Drug Rebates
Health and Human Services Secretary Alex Azar’s announcement of a plan to end kickbacks in the pharmacy distribution chain could shake up the multibillion-dollar prescription drug market. If put into effect by 2020 as proposed, the so-called list prices of drugs will likely plummet in the Medicare Part D system.Some Democrats and Republicans expressed hope that the plan could be expanded to the commercial sector. But with so much at stake, don’t expect the middlemen known as pharmacy benefit managers who profit from the kickbacks to go quietly. They are marshaling an argument that could prove particularly scary to seniors who watch their Part D premiums closely. (Erin E. Trish and Dana Goldman, 2/21)
Bloomberg: Roche Deal For Spark Is $5 Billion Chance To Lead On Drug Prices
One of the world's biggest drugmakers is betting on some very expensive medicines. On Monday, Roche Holding AG said it will buy Spark Therapeutics Inc., a Philadelphia-based biotech firm focused on potentially curative one-time treatments that modify human genes, for $4.8 billion. Spark's first medicine, Luxturna, can stave off blindness in people with a rare eye disease. Its late-stage hemophilia gene therapies could help people live without a lifetime of expensive infusions. (Max Nisen, 2/25)
St. Louis Post Dispatch: Soaring Insulin Costs Are A Symptom Of Our Bigger Health Care Crisis
Soaring insulin prices are a genuine emergency in America. Many diabetics, suddenly unable to afford their prescribed doses, are self-rationing or using expired supplies. In the world’s most advanced nation, some are dying because they can’t afford a simple injection. (2/24)
The Wall Street Journal: GE’s Biotech Miracle Cure
The phrase “win-win deal” has become trite, but General Electric ’s GE 6.39% bombshell on Monday morning rises to that level. The troubled conglomerate’s shares rallied by 8% in early trading on the announcement that Danaher would buy its biotechnology business for $21 billion in cash. GE’s shares are up by nearly 70% since their mid-December trough. Danaher’s shares also rose by about 8%, signifying what the market perceives as a good price and a good fit for the company once run by current GE boss Larry Culp. (Spencer Jakab, 2/25)
Stat: The 'QALY' Shouldn't Be Used In Drug Cost-Effectiveness Reviews
What’s a year of life worth? That question is at the heart of a metric called the quality-adjusted life year that is increasingly being used to make decisions about paying for new drugs. If I was asked that question about one of my children, my answer would be “limitless,” and no one could persuade me otherwise. But others are putting a discrete price tag on it. (William S. Smith, 2/22)
