Net drug prices began leveling off in 2015, but the researchers said that doesn't mean that drugs are affordable for many consumers.
The net cost of prescription drugs — defined as sticker price minus manufacturer discounts — grew more than three times faster than the rate of inflation over the past decade, according to new research published this week in JAMA.
"Previously, we were limited to studying list prices, which do not account for manufacturer discounts. List prices are very important, but they are not the full story," said study lead author Inmaculada Hernandez, assistant professor of pharmacy at Pitt. "This is the first time we've been able to account for discounts and report trends in net prices for most brand name drugs in the U.S."
The researchers used revenue and usage data for 602 brand-name drugs to track list and net prices from 2007 to 2018. They found that inflation-adjusted list prices increased by 159%, while net prices, which account for rising manufacturer discounts, including rebates, coupon cards and 340B discounts, increased by 60%, which is 3.5 times the rate of general inflation.
Net drug prices began leveling off in 2015, but the researchers said doesn't mean that the drugs are affordable for many consumers.
"Net prices are not necessarily what patients pay," said senior author Walid Gellad, MD, associate professor of medicine and health policy at Pitt and director of the CP3. "A lot of the discount is not going to the patient."
The lion's share of the discounts is made up by rebates that are paid directly to insurers. In addition, the rebates have little affect on the price consumers pay through copays, which are based on list price, not net price.
Depending on the drug, the gap between list and net prices is either widening for drugs such as insulin and TNF inhibitors, or rising at the same level, which is what's happening with cancer drugs. Multiple sclerosis drug net prices more than doubled over the past decade in inflation-adjusted dollars, even after discounts were applied.
"We're seeing a lot of discussion that net prices have stabilized over the last few years, and that does appear to be the case," said Gellad. "But the stabilization of net price comes on top of large increases over the last decade, many times faster than inflation, for products that have not changed over this time period. In addition, this net price is an average, with substantial variability across payers and drugs."
Medicaid enjoys much larger discounts than for other payers, reflecting the mandatory Medicaid rebate based on price increases over inflation. Discounts for other payers are based on negotiations.
Hernandez disclosed fees paid to her personally by Pfizer, for services unrelated to the scope of this work.
With the increased likelihood of a recession this year, S&P says lower credit ratings for private equity-backed issuers may increase, making the sector vulnerable to downgrades and defaults.
Private equity firms' increasing ventures into the healthcare sector may be harming the credit ratings of their newly acquired, highly leveraged assets, according to a report published by S&P Global Ratings.
"The influx of private equity-backed healthcare companies, as well as continued high valuations has led to significantly higher debt levels," said S&P Global Ratings credit analyst Alice Kedem.
Because of this increased debt burden, Kedem said, credit ratings continue to fall into the 'B' category, with the proportion of "B-" rated companies in the healthcare sector doubling in past few years.
Higher risk of the private equity-backed issuers is also reflected through a high ratio of downgrades to upgrades, with private equity-backed issuers having limited to no upside, according to the report.
The report identified a combination of factors that prompted the negative rating actions in private equity-backed ratings originated from transactions from 2014 through 2019, including "lower demand or negative reimbursement changes for service-oriented issuers with higher-than-estimated operating costs, integration challenges, or disruption stemming from a transition of the enterprise resource planning."
Kedem said there are no signs that private equity interest in healthcare is abating, and that the highly leveraged arrangements will persist.
"As many transactions are in services-oriented subsectors that are highly fragmented and where size and scale can bring operational leverage, we expect that private equity-owned issuers will continue to pursue merger and acquisition strategies, maintaining leverage at high levels," she said.
With the increased likelihood of a recession this year, S&P forecasts that downward bias for private equity-backed issuers may increase, making the sector more vulnerable to downgrades and eventually to defaults.
It's the seventh such settlement reached by DOJ's Antitrust Division in its ongoing probe of the generic pharmaceutical industry.
Generic drug maker Sandoz Inc. will pay the federal government $195 million to avoid felony charges for price fixing, bid rigging, and customer allocation under a deferred prosecution agreement announced this week by the Department of Justice.
The DPA is the seventh such settlement reached by DOJ's Antitrust Division in its ongoing probe of the generic pharmaceutical industry. Sandoz is the third company to be charged and entered into a DPA.
Three executives have pleaded guilty, including former Sandoz executive Hector Armando Kellum. Ara Aprahamian, a former executive at Taro Pharmaceutical USA, was indicted last month on price fixing charges and is awaiting trial.
DOJ accused Sandoz of participating in four criminal antitrust conspiracies, each with a competing generic drug maker, between 2013 and 2015.
Under the DPA, Sandoz admitted that its sales from the various schemes exceeded $500 million. The company has agreed to cooperate with federal prosecutors in the ongoing conspiracy.
"Today’s resolution, with one of the largest manufacturers of generic drugs, is a significant step toward ensuring that prices for generic drugs are set by competition, not collusion, and rooting out antitrust crimes that cheated American purchasers of vital medicines," Assistant Attorney General Makan Delrahim of DOJ's Antitrust Division said in a media release.
"Sandoz conspired for years with other manufacturers and their executives to raise prices for critical medications, and the Antitrust Division will continue its ongoing investigation to hold both individuals and corporations accountable for these crimes," Delrahim said.
Sandoz has also set aside $185 million while it negotiates a separate settlement with DOJ's Civil Division to resolve related claims.
"In reaching today’s resolution, we are not only resolving historical issues but also underscoring our commitment to continually improving our compliance and training programs and evolving our controls," she said. "We are disappointed that this misconduct occurred in the face of our clear antitrust compliance policies and multiple trainings – and in full contravention of the company’s values."
Specifically, Sandoz admitted to the following four felony charges:
Count One charged Sandoz for conspiring with Taro Pharmaceuticals USA to fix prices for drugs that included clobetasol (cream, emollient cream, gel, ointment, and solution), desonide ointment, and nystatin triamcinolone cream.
Count Two charged Sandoz for conspiring with Kavod Pharmaceuticals LLC to allocate customers and fix prices of benazepril HCTZ. Kavod was charged and entered into a DPA last year for its participation.
Count Three charged Sandoz for conspiring with a generic drug company based in Michigan for drugs that included desonide ointment.
Count Four charged Sandoz for conspiring with a generic drug company based in Pennsylvania for drugs that included tobramycin inhalation solution.
By accepting the DPA, Sandoz avoided minimum fines of $100 million for each count, which could have been increased to twice the gain derived from the crime or twice the loss suffered by victims if either amount is greater than $100 million.
Survey shows more than 290,000 NPs practicing in the U.S., accounting for more than 1 billion patient visits annually.
The nation's nurse practitioner workforce grew by 20,000 in the past year, with more than 290,000 full-time NPs accounting for more than one billion patient visits, according to an annual surveyby American Association of Nurse Practitioners.
"Millions of patients — of all ages — choose an NP as their health care provider each year," AANP President Sophia Thomas, DNP, said in a media release. "As the number of seniors increases and the demand for health care access grows, NPs are meeting that need in rural and urban areas across the nation."
AANP estimates that NPs accounted for 1.06 billion patient visits in 2018,
Although NP compensation can vary widely based on location, specialty, experience and education, including type of certification, the survey found the median base salary for full-time NPs was $110,000 and the median total income (including bonuses) for full-time NPs was $115,000.
Full-time, psychiatric mental health NPs had the highest median base salary ($125,000), while emergency NPs had the highest median hourly rate ($70.00)
Four of the top five certifications reported were in primary care: family (65.4%), adult (12.6%), adult-gerontology (7.8%) and pediatrics (3.7%).
NP administrators reported a higher median base salary of $120,000. NPs who held a clinical role made a median base salary of $108,000.
Most NPs described their administrative role as "professional-level," such as director, manager or supervisor, and one-in-seven NPs held an "executive-level" position such as CEO, CNO or owner.
The weighted results of the electronic survey were based on the responses of 5,770 NPs.
A settlement agreement with DOJ aims to put the Massachusetts hospital into compliance with the Americans with Disabilities Act.
Tufts Medical Center has pledged to improve access to its 16 facilities in the Boston area for disabled people under a settlement agreement with the Department of Justice.
The agreement resolves a compliance review under Title III of the Americans with Disabilities Act.
"This case is a reminder that we still need the basic protections provided by the ADA," said Andrew Lelling, U.S. Attorney for Massachusetts.
"This is especially true for the deaf and hard-of-hearing, who often receive too little support when trying to navigate the healthcare system," Lelling said. "I commend Tufts for working with us to improve services for patients with disabilities, and we hope this agreement encourages other healthcare providers to review their ADA compliance."
In a media statement, Tufts Medical Center said many of the buildings that were creating obstacles for disabled people "pre-date the ADA," which became law 30 years ago.
"We agree there is more we must do to meet the current strict code standards and make our facilities accessible to all. We will be hiring an ADA coordinator to oversee this work and to ensure any future changes in standards are met," the hospital said.
Improve the hospital’s policies for ensuring effective communication with patients and companions who are deaf or hard of hearing;
Improve physical access to its facilities by removing barriers at public and common use areas;
Provide sufficient accessible medical equipment to enable individuals with disabilities to have equal access to medical services.
Improve wheelchair access to public restrooms;
Update inpatient rooms on each unit to bring them as close as possible to ADA standards;
Offer deaf and hard of hearing translation tools to patients in need;
Train staff on ADA compliance
Under the three-year settlement, DOJ won't file a lawsuit or initiative additional investigations of Tufts Medical Center for the issues resolved in the agreement.
Anthem said the acquisition creates an opportunity to combine existing behavioral health capabilities "with Beacon's successful model and support services in order to enhance whole person care."
Anthem, Inc. on Monday said it has finalized its previously announced acquisition of Beacon Health Options, the nation's largest independently held behavioral health organization.
Financial terms were not disclosed for the sale of Boston-based Beacon, which had been held by Bain Capital Private Equity and Diamond Castle Holdings. The newly acquired BHO will move into Anthem's Diversified Business Group.
Beacon serves 36 million peopel and almost 3 million individuals in comprehensive risk-based behavioral programs. Indianapolis-based Anthem said the acquisition creates an opportunity to combine existing behavioral health capabilities "with Beacon's successful model and support services in order to enhance whole person care."
"We are pleased to complete the acquisition of Beacon Health Options and are excited to expand our critical behavioral health services to more people across the country as part of our focus on true whole person care," Anthem CEO Gail K. Boudreaux said in a media release.
"Consumers and health plan customers alike will benefit from our ability to scale and integrate physical and behavioral capabilities in new and meaningful ways to improve lives," she said.
When the deal was first announced last June, Beacon CEO Russell C. Petrella said the acquisition would provide Beacon will scale to expand service options.
"Together, we will expand access and enhance the quality of care for our mutual members," Petrella said in a statement. "I am proud of the talented and committed team at Beacon, and we look forward to our future with Anthem."
The two academic medical centers say they "remain confident our merger will result in continued high-quality care for our consumers."
Federal and Pennsylvania regulators are moving jointly to block the proposed merger of Jefferson Health and Albert Einstein Healthcare Network, claiming the consolidation would reduce competition in Philadelphia and neighboring Montgomery County.
"Patients in the Philadelphia region have benefitted enormously from the competition between the Jefferson and Einstein systems," Ian Conner, director of the Federal Trade Commission's Bureau of Competition, said in amedia release.
"This merger would eliminate the competitive pressure that has driven quality improvements and lowered rates. Throughout our investigation, we have benefited from close cooperation with our partners in the Office of the Attorney General of Pennsylvania," he said.
Pennsylvania Attorney General Josh Shapiro said his office worked with the two health systems for several months to develop a plan that would allow the merger to go forward but protect patients from a loss of access and rising costs.
"Unfortunately, the deal Jefferson and Einstein have put forward does not do enough to ensure the ongoing stability of Einstein Medical Center Philadelphia as a key, full-service care provider for the people of North Philadelphia," he said.
"Furthermore, the deal as it stands now does not do enough to maintain competition in the Montgomery County hospital and rehab markets, which would lead to higher costs for patients. As such, my office is joining with the FTC to block this merger as it is currently proposed."
The FTC and Shapiro's office this week asked a federal court in Philadephia for a temporary restraining order and a preliminary injunction to stop the merger and maintain the status quo pending an administrative hearing in September.
Jefferson and Albert Einstein issued a joint statement saying they would "review the challenge to better understand both their position and how to best move forward."
"We believe we have presented a strong and comprehensive case as to how the merger would benefit the patients we serve and advance our academic mission without reducing competition for healthcare services," the statement read.
"At a time when regional and national politicians and leaders are seeking ways to better support essential safety net hospitals, we see this merger as a creative solution to preserve access and enhance services to the residents of North Philadelphia."
Einstein Healthcare Network and Jefferson Health were part of the same organization before they split a decade ago. In March 2018 they signed a letter of intent to unite once again.
The FTC and the Pennsylvania AG said that the merged health systems would control 60% of the inpatient general acute care services in the North Philadelphia market, 45% of the GAC market in Montgomery County, and 70% of the inpatient rehabilitation services market for the Philadelphia market.
Despite the hurdles erected by state and federal regulators, Jefferson and Einstein said Thursday that they "remain confident our merger will result in continued high-quality care for our consumers."
"Our goal is to broaden our delivery of accessible and value-based care to patients and provide an exceptional education and training experience for our students," the statement said. "We are two like-minded, culturally aligned organizations with a mutual goal of improving lives for all of our patients, particularly the most vulnerable in the Philadelphia area."
Many hospitals and surgeons continue to perform high-risk procedures without sufficient patient volumes to ensure patient safety.
A new report from The Leapfrog Group suggests that most hospitals and surgeons in 2019 continued to perform high-risk elective surgeries without sufficient volumes to ensure patient safety.
"The good news is we are seeing progress on surgical safety," said Leah Binder, president and CEO of The Leapfrog Group.
"The bad news is the vast majority of hospitals performing these high-risk procedures are not meeting clear volume standards for safety," she said. "This is very disturbing, as a mountain of studies show us that patient risk of complications or death is dramatically higher in low-volume operating rooms."
The report surveyed more than 2,100 hospitals representing 70% of the nation's hospitals beds on eight high-risk procedures.
Esophageal resection for cancer and pancreatic resection for cancer were the two procedures where the fewest hospitals met the volume standard for patient safety – less than 3% and 8% respectively.
Almost half (48%) of hospitals were most likely to meet the safety standard for bariatric surgery.
While many rural hospitals elected not to perform high-risk procedures, those that did were not likely to meet the volume standards, the report found.
The survey found that 70% of hospitals have protocols to ensure appropriateness for cancer procedures. For other high-risk procedures, hospital compliance to ensuring appropriateness ranged from 32%-60%, depending on the procedure.
Research suggests that these new disabilities can lead to readmissions, placement in a nursing home, and continued declines in patients' well-being.
Older hospital patients often encounter new disabilities after discharge, such as difficulty bathing, walking, and driving a car, a new study shows.
The research, published in the Journal of the American Geriatrics Society, suggests that these new disabilities can lead to hospital readmissions, placement in a nursing home, and continued declines in patients' well-being.
The study looked at data from the Precipitating Events Project of 515 people, with a mean age of 83, who lived at home at the beginning of the study, and who were hospitalized for acute, non-critical care.
The study participants initially were not disabled and did not need help with four basic activities: bathing, dressing, walking, and getting out of a chair. They were examined at home every 18 months and via telephone monthly.
From one-to-six months after discharge, one than one-third of participants reported various problems including: leaving home for medical care, getting dressed, bathing, walking across a room, getting in or out of a chair, walking a quarter-mile, climbing a flight of stairs, driving a car, doing basic housework, taking medications.
Some of the participants recovered from their disabilities one to two months after discharge, except for driving, which was less common.
In many cases, however, recovery was incomplete even six months after hospital discharge. For example, the proportion of people who were not disabled at six months was 65% for bathing and meal preparation, 58% for taking medications, and 55% for driving.
CMS administrator says her agency will "enhance" oversight of accrediting organizations "in the near future."
Centers for Medicare & Medicaid Services Administrator Seema Verma took a swipe at accrediting organizations on Tuesday, noting that when they accept consulting fees from the hospitals they grade it creates "a glaring conflict of interest."
Delivering the opening remarks at the 2020 CMS Quality Conference in Washington, D.C., Verma said her agency is "looking at ways to enhance our oversight of accrediting organizations."
"You're going to see more from us on this issue in the near future," she said.
Verma said that CMS in recent years has found inconsistencies in the way accrediting organizations inspect providers.
"Some even use standards that differ from our own, which is simply not acceptable," she said.
CMS in December 2018 put out a request for information from accrediting organizations that Verma says was designed to "ascertain the scope of the issue."
On Tuesday, Verma did not name specific accrediting organizations in her critique, but she called "a spate of serious deficiencies" that included patient harm and deaths at hospitals that had been deemed Medicare compliant "deeply concerning."
"Receiving CMS’s authorization to inspect and deem healthcare providers compliant with Medicare's quality standards is nothing short of assuming a sacred public trust responsibility," she said. "But an increasing amount of evidence indicates that accrediting organizations are not living up to that high bar."
"Our concerns are not only heightened by the growing trend of accrediting organizations providing fee-based consulting services to the same organizations they accredit; a glaring conflict of interest," Verma said, adding that CMS does not allow "these kinds of relationships" in other areas, such as Quality Improvement Organizations in Medicare or external reviews in Medicaid.
The Joint Commission, the nation's largest hospital accrediting organization, has denied any conflict of interest, citing a "long-standing firewall" it has created between its accrediting division and its consulting division, Joint Commission Resources, Inc.
"The Joint Commission recognizes the importance of assuring the integrity of the accreditation process, which we accomplish by prohibiting any sharing of information about consulting services for individual organizations with anyone involved in accreditation," the accrediting organization said.
