In a blow to the pharmaceutical industry, Republicans and Democrats in Congress, and President Donald Trump, appeared to be largely unified in their determination to address skyrocketing drug costs.
Senators railed against pharmaceutical executives Tuesday for declining to testify before Congress about out-of-control drug prices, as lawmakers on both sides of the U.S. Capitol kicked off investigations sure to rattle one of the nation's most powerful industries.
Sen. Chuck Grassley of Iowa, the Republican chairman of the Senate Committee on Finance, signaled he could compel drugmakers to appear before the committee, saying he was "extremely disappointed" that only two companies have agreed to testify at a later date.
"We will extend the opportunity again in the future, but we will be more insistent the next time," Grassley said.
And in a blow to the pharmaceutical industry, Sen. Ron Wyden of Oregon, the committee's top Democrat, agreed with Grassley, suggesting the parties are largely united in their determination to address skyrocketing drug costs.
"Nobody is going away, and even if it means using our power to compel the drug company CEOs to show up, they will come before this committee," Wyden said.
While Congress has examined rising drug costs before, the issue has benefited from the attention of President Donald Trump, who has vowed to address the problem. The Trump administration has floated a handful of possible solutions, including a proposal to tie the price Medicare pays for some drugs to the prices paid for the same drugs overseas.
Across the Capitol on Tuesday, the House Committee on Oversight and Reform also held the first hearing in its own "sweeping" investigation into drug prices. Rep. Elijah Cummings, the Maryland Democrat who took control of the committee this month, recently wrote to 12 drug companies demanding information about their pricing practices.
Cummings has made it clear that he is interested in working with the Trump administration on drug prices. Cummings met with Trump in 2017, weeks after Trump was sworn in as president, to discuss how the parties could work together. Two weeks ago, Cummings discussed the issue with Health and Human Services Secretary Alex Azar.
Tuesday, one Republican lawmaker close to Trump, Rep. Mark Meadows of North Carolina, said he had spoken with Trump and agreed to pass along a message to Cummings: "On this particular subject, not only is he serious, but he's serious about working in a bipartisan way to lower prescription prices," Meadows said.
Cummings asked Meadows to tell Trump "we are willing, ready and able to work with him to get it done."
Lawmakers heard heart-wrenching testimony Tuesday from two mothers about the impact of rising costs on their insulin-dependent children. Antroinette Worsham described how her daughter, a college student with Type 1 diabetes, began rationing her insulin because she couldn't afford it — and how her son later found her dead in her bed.
Now, Worsham told the House committee, she worries about her younger daughter, who also has diabetes. "I fear the same is going to happen to her," Worsham said.
On the Senate side, Kathy Sego — whose son with Type 1 diabetes was profiled by Kaiser Health News in 2017 — had a message for absent drug companies. "I don't know how any person would be OK with knowing that their medication is priced so high you have to make a decision between life or death," she said. "That should never be a decision a person needs to make."
It remains to be seen how drugmakers might react to mounting political scrutiny.
Both Grassley and Cummings have the power to subpoena witnesses — such as drug company executives — to appear before Congress, though Grassley told reporters afterward that he was not yet prepared to invoke that option.
Grassley said several drug companies had declined to testify publicly, offering a variety of excuses. One company, for instance, argued their testimony would "create a language-barrier problem." Unmoved, Grassley remarked that he "thought we all spoke English."
Wyden expressed his frustration with drug companies by comparing them to a more traditional villain, the tobacco companies.
"Even the Big Tobacco CEOs were willing to come to Congress and testify, and they made a product that kills people," he said. "They all lied to me, but at least they showed up. The drugmakers won’t even do that much."
While lawmakers noted that both hearings were only the first of many, an early consensus emerged that something must be done about drug rebates, which provide discounts to middlemen in the supply chain but often push patients toward pricier brand-name drugs.
Senators also targeted drug discount coupons, which lower the price for patients at the cash register but don't address the larger struggle between manufacturers and insurance companies.
"We know who's winning. It's the people who print the coupons," said Peter Bach, director of the Center for Health Policy and Outcomes at the Memorial Sloan Kettering Cancer Center. "Patients are entirely caught in the middle."
The long political reach of the drug industry was on display Tuesday, though, suggesting it could be an uphill battle to hold pharmaceutical companies accountable. Drugmakers' political action committees give millions of dollars to the campaigns of hundreds of members of Congress.
"he Project on Government Oversight, a nonpartisan watchdog group,noted even some of the experts who testified Tuesday have benefited from drugmaker cash. The Pharmaceutical Research and Manufacturers of America, which lobbies on behalf of drugmakers, has given millions to the advocacy arm of the American Action Forum — a conservative-leaning organization whose president, Douglas Holtz-Eakin, testified before senators.
Bach has also received money from pharmaceutical companies directly, the watchdog group said. Bach said he was paid for giving speeches.
Another potential obstacle: House Republicans on Tuesday showed little interest in cooperating with the investigation, with some arguing that there were bigger fish to fry in the nation’s healthcare system.
Rep. Jim Jordan of Ohio, the House committee's top Republican, opened by enumerating several failings of the Affordable Care Act, noting Democrats are "eager to blame the private sector."
"The problem is not that the free market has failed us," Jordan said. "It's that government interventions in the market have distorted incentives, creating barriers to competition and left things in a mess."
Correction: This story was updated Wednesday afternoon to correct the name of the organization for which Douglas Holtz-Eakin serves as president. It is the American Action Forum, not the American Action Network.
These agreements, which can involve different levels of clinical integration, typically grant community hospitals access to experts and specialized services at the larger hospitals while allowing them to remain independently owned and operated.
After seven years of a vigorous fight, Jim Hart worried he was running out of options.
Diagnosed with prostate cancer at age 60, Hart had undergone virtually every treatment — surgery, radiation and hormones — to eradicate it. But a blood test showed that his level of prostate-specific antigen, which should have been undetectable, kept rising ominously. And doctors couldn't determine where the residual cancer was lurking.
"I didn't like the sound of that," said Hart, a retired international oil specialist for the federal government. "I wanted it gone," he added, especially after learning that he had inherited the BRCA2 gene, making him vulnerable to other cancers.
So when Andrew Joel, Hart’s longtime urologist atVirginia Hospital Center in Arlington, mentioned the hospital's membership in the Mayo Clinic Care Network and suggested consulting specialists at the Rochester, Minn., hospital for a second opinion, Hart enthusiastically agreed.
A Mayo immunologist told Joel about a new PET scan, not then available in the Washington area, that can detect tiny cancer hot spots. Hart flew to Mayo for the scan, which found cancer cells in one lymph node in his pelvis. He underwent chemotherapy at Virginia Hospital Center and five weeks of radiation at the Mayo Clinic. Since September 2016, there has been no detectable cancer.
"This collaboration was sort of a magic process," Hart said. "I feel very fortunate."
'Benefit By Association'
Hart's experience showcases the promise of a much-touted but little understood collaboration in health care: alliances between community hospitals and some of the nation’s biggest and most respected institutions.
For prospective patients, it can be hard to assess what these relationships actually mean — and whether they matter.
Leah Binder, president and chief executive of the Leapfrog Group, a Washington-based patient safety organization that grades hospitals based on data involving medical errors and best practices, cautions that affiliation with a famous name is not a guarantee of quality.
"Brand names don't always signify the highest quality of care," she said. "And hospitals are really complicated places."
Affiliation agreements are "essentially benefit by association," said Gerard Anderson, a professor of health policy and management at the Johns Hopkins Bloomberg School of Public Health. "In some cases it's purely branding and in other cases it's a deep association."
A key question is "how often does the community hospital interact with the flagship hospital? If it's once a week, that's one thing. If it's almost never, that's another,” Anderson said.
Feeling 'Plugged In'
To expand their reach, flagship hospitals including Mayo, the Cleveland Clinic and Houston's MD Anderson Cancer Center have signed affiliation agreements with smaller hospitals around the country. These agreements, which can involve different levels of clinical integration, typically grant community hospitals access to experts and specialized services at the larger hospitals while allowing them to remain independently owned and operated. For community hospitals, a primary goal of the brand-name affiliation is stemming the loss of patients to local competitors.
In return, large hospitals receive new sources of patients for clinical trials and for the highly specialized services that distinguish these "destination medicine" sites. Affiliations also boost their name recognition — all without having to establish a physical presence.
In some cases, large hospital systems opt for a different approach, largely involving acquisition. Johns Hopkins acquired Sibley Memorial and Suburban hospitals in the Washington, D.C., area, along with All Children's Hospital in St. Petersburg, Fla. The latter was re-christened Johns Hopkins All Children's Hospital in 2016.
New York's Memorial Sloan Kettering Cancer Center has embraced a hybrid strategy. It operates a ring of facilities surrounding Manhattan and has forged alliances with three partners in Connecticut, Pennsylvania and Florida.
"Every one of these models is different," said Ben Umansky, managing director for research at the Advisory Board, a Washington-based consulting firm.
Local hospitals, he said, particularly those operating "in the shadows of giants," may be better able to retain patients "by getting a name brand on their door. … There is a sense that they are plugged in." (Virginia Hospital Center, for example, competes with Hopkins, MedStar Washington Hospital Center, which has an alliance with the Cleveland Clinic, and the Northern Virginia-based Inova system.)
Doctors can obtain speedy second opinions for their patients and streamline visits for those with complex or unusual medical needs, processes that can be daunting and difficult without connections.
Dr. Michael Kupferman, senior vice president of the MD Anderson Cancer Network, said it seeks to "elevate the quality of cancer care" by forming partnerships with "high-quality [hospitals] to keep patients at home and provide the imprimatur of MD Anderson."
Virginia Hospital Center's association with Mayo is "not just a branding affiliation, it's a deep clinical affiliation," said Dr. Jeffrey DiLisi, senior vice president and chief medical officer at the Arlington facility.
Despite extensive marketing, many patients seem unaware of the linkage. "We still think a lot about 'How do we communicate this?'" DiLisi said.
Although affiliation agreements differ, many involve payment of an annual fee by smaller hospitals. Officials at Mayo and MD Anderson declined to reveal the amount, as did executives at several affiliates. Contracts with Mayo must be renewed annually, while some with MD Anderson exceed five years.
Acceptance is preceded by site visits and vetting of the community hospitals' staff and operations. Strict guidelines control use of the flagship name.
"It is not the Mayo Clinic," said Dr. David Hayes, medical director of the Mayo Clinic Care Network, which was launched in 2011. "It is a Mayo clinic affiliate."
Of the 250 U.S. hospitals or health systems that have expressed serious interest in joining Mayo’s network, 34 have become members.
For patients considering a hospital that has such an affiliation, Binder advises checking ratings from a variety of sources, among them Leapfrog, Medicare and Consumer Reports, and not just relying on reputation.
"In theory, it can be very helpful," Binder said of such alliances. "The problem is that theory and reality don't always come together in healthcare."
Case in point: Hopkins' All Children’s has beenbesieged by recent reports of catastrophic surgical injuries and errors and a spike in deaths among pediatric heart patients since Hopkins took over. Hopkins' chief executive has apologized, more than a half-dozen top executives resignedand Hopkins recently hired a former federal prosecutor to conduct a review of what went wrong.
"For me and my family, I always look at the data," Binder said. "Nothing else matters if you're not taken care of in a hospital, or you have the best surgeon in the world and die from an infection."
Cancer During Pregnancy
Bryan Mills, chief executive of Community Health Network, was unhappy with his oncology service. Specialists at the Indianapolis-area hospitals he headed were competing against each other and patients were being ill-served. So Mills cold-called MD Anderson and, in 2012, Community joined its network.
"We needed something we could rally around," Mills said.
"This is really not about a competitive advantage to me, but about providing optimal care," said Mills, whose network competes with three other systems including one run by the University of Indiana, which operates a National Cancer Institute-designated center.
"One hundred percent of the work we do is audited by MD Anderson," Mills said. "We can get second opinions almost instantly."
Mills said he believes that the affiliation, which is prominently displayed on Community’s website, has attracted patients. In 2012, he said, Community treated about 2,000 cancer patients. In 2018, the number was 5,000.
Among them is Kamaljit "Kelly" Kaur. Shortly before Christmas 2015 the Greenwood, Ind., licensed practical nurse was diagnosed with inflammatory breast cancer, a rare and aggressive form of the disease usually discovered at an advanced stage. At the time, Kaur was 35 and five months pregnant with her third child.
Kaur said that her Indiana doctors conferred with MD Anderson oncologists and used "their guidelines to treat me. I felt comforted by that, like it was the right choice for me." Her biggest concern, she said, was the health of her baby.
During the final months of her pregnancy, Kaur received weekly chemotherapy. Her son was born healthy and at full term in February 2016. She then underwent a bilateral mastectomy, followed by more chemo and radiation. Kaur said she has been cancer-free since January 2017, when she finished treatment. The collaboration, she said, "helped me get through this."
Kaur's Indiana oncologist, Dr. Anuj Agarwala, said he thought the MD Anderson involvement was helpful, because it reassured Kaur and him by concurring with his recommendations. He said he presented his treatment plan to specialists in Houston and "they didn't change anything."
Overall, he said, "it really doesn't affect what I do very much. We are following national guidelines and not giving off-the-wall treatment."
Initially, Agarwala said, some Community oncologists bristled at having their charts audited by Houston specialists, a resistance, he said, that has diminished.
The affiliation has strengthened safety measures involving the administration of chemotherapy and has made the informed consent process more rigorous, Agarwala said, to the benefit of patients. "Overall it has been a valuable relationship."
"The population I work with don't have the resources to get care outside of their hometown," he added, "and feel more confident with the input of a world-class institution."
So did Dr. James Ouellette, a cancer surgeon with Premier Health in Dayton, Ohio, which joined the MD Anderson network in 2016.
In November 2018, Ouellette removed a huge and rare malignant tumor from Joanne Dotson’s abdomen during a four-hour surgery. The solitary fibrous tumor was in a dicey location: It had grown so large it was displacing Dotson’s liver and compressing her vena cava, a major vein that carries blood to the heart.
Dotson, 70, said she had never heard of MD Anderson until her doctors mentioned it.
The affiliation, she said, did not affect her choice of hospital or surgeon, in whom she had confidence.
"I wasn't even worried," she said. "His hands are God's hands," she said, referring to Ouellette.
Her surgeon felt differently.
"While I was very glad Mrs. Dotson wasn't worried, I was, with a big surgery like that," Ouellette said. Before the operation, Ouellette said he conferred with an MD Anderson surgeon, radiation oncologist and medical oncologist about how best to treat the grapefruit-size growth. As a result of those discussions, Ouellette said, he altered the initial treatment plan.
Getting A Vibe
Virginia Hospital Center officials say that only a handful of the approximately 170 patients, the vast majority with cancer diagnoses, who annually receive second opinions from Mayo wind up getting treatment there. Most of those who do, DiLisi said, received care unavailable at his hospital.
"The patients [that affiliates] send us are more complex patients," said Mayo's Hayes. "We have a broad and deep bench of specialists."
Even so, it's often doctors who suggest a second opinion, not patients who request one. Joel said he mentions the option to those urology patients from whom he gets "a vibe" that they might be interested.
DiLisi said that the affiliation can save patients time and money.
"We get them as good a second opinion as they would get at Hopkins," DiLisi said, without incurring the costs and additional testing involved. "And they don't have to drive to Baltimore."
For the moment, chargemasters aren't useful for the average patient, and they have been criticized for that reason. But don't dismiss them as useless. Think of them as raw material to be mined for billing transparency.
As President Donald Trump was fighting with Congress over the shutdown and funding for a border wall, his administration implemented a new rule that could be a game changer for healthcare.
Starting this month, hospitals must publicly reveal the contents of their master price lists — called "chargemasters" — online. These are the prices that most patients never notice because their insurers negotiate them down or they appear buried as line items on hospital bills. What has long been shrouded in darkness is now being thrown into the light.
For the moment, these lists won't seem very useful to the average patient — and they have been criticized for that reason. They are often hundreds of pages long, filled with medical codes and abbreviations. Each document is an overwhelming compendium listing a rack rate for every little item a hospital dispenses and every service it performs: a blood test for anemia. The price of lying in the operating suite and recovery room (billed in 15-minute intervals). The scalpel. The drill bit. The bag of IV salt water. The Tylenol pill. No item is too small to be bar coded and charged.
But don't dismiss the lists as useless. Think of them as raw material to be mined for billing transparency and patient rights. For years, these prices have been a tightly guarded industrial secret. When advocates have tried to wrest them free, hospitals have argued that they are proprietary information. And, hospitals claim, these rates are irrelevant, since — after insurers whittle them down — no one actually pays them.
Of course, the argument is false, and our wallets know it.
First of all, hospitals routinely go after patients without insurance or whose insurer is not in their network. When Wanda Wickizer had a brain hemorrhage in 2013, a Virginia hospital billed her $286,000after a 20% "uninsured" discount on a hospital bill of $357,000 — the list price, according to chargemaster charges. Medicare would have paid less than $100,000 for her treatment.
Second, those list prices form the starting point for negotiations, allowing hospitals and insurers to take credit for beneficence, when there is none.
I recently received an insurance statement for blood tests that were priced at $788.04; my insurer negotiated a "discount" of $725.35, for an agreed-upon price of $62.69 "to help save you money." My insurer's price was around 8% of the charge. Since my 10% copayment amounted to $6.27, my insurer happily informed me, "you saved 99%."
Not!
If a supposedly $1,000 TV is "on sale" for $80, it's not really a discount. It's an absurd list price.
Just as airlines have been shown to exaggerate flight times so they can boast about on-time arrivals, hospitals set prices crazy high so they can tout their generous discounts (while insurers tout their negotiating prowess).
Another rationale for those prices is just plain greed. Dr. Warren Browner, the chief executive of California Pacific Medical Center, describes this as the "Saudi sheikh problem": "You don't really want to change your charges if you have a Saudi sheikh come in with a suitcase full of cash who's going to pay full charges," he said.
But in an era when American patients are expected to be good consumers and are paying more of their bills in the form of copays and deductibles, they have a right to the information on list prices. They have a right to make sure they are reasonable.
Although making chargemaster pricing public will not, by itself, reform our high-priced medical system, it is an important first step. Maybe, just maybe, a hospital will think twice before charging a $6,000 "operating room fee" for a routine colonoscopy if its competitor down the street is listing its price at $1,000. Making this information public should bring list prices more in line with what is actually paid by an insurer, a far better measure of value.
And while the lists are far from user-friendly, researchers and entrepreneurs can now create apps to make it easier for patients to match procedures to their codes and crunch the numbers. With access to list prices on your phone, you could reject the $300 sling in the emergency room and instead order one for one-tenth of the price on Amazon. You could see in advance the $399 rate your hospital charges for each allergen it applies in a skin test and avoid the $48,000 allergy test— with an $8,000 deductible.
As a next step, regulators should insist that these prices be easily accessible on hospitals' home pages — perhaps in the place of "PAY YOUR BILL NOW" — and translated into plain English. Seema Verma, the head of the Centers for Medicare & Medicaid Services, has suggested that she may well do so.
Patients can help, too: Check out your hospital's price list. If it's not detailed or complete enough, demand more. For discrete items, like an MRI of the brain or a vitamin D blood test, take the trouble to scan the chargemaster for the item. Reject an overpriced procedure (even if your insurer is paying the bulk of the bill) and take your business elsewhere.
Justice Louis Brandeis famously said, "Sunlight is said to be the best of disinfectants; electric light the most efficient policeman." But, in this case, the reform will work only if people take the trouble to look — and to act — now that the lights are turned on.
Many hospitals conduct nightly wealth screenings using software that culls public data such as property records, contributions to political campaigns and other charities to gauge which patients are most likely to be the source of large donations.
Nonprofit hospitals across the United States are seeking donations from the people who rely on them most: their patients.
Many hospitals conduct nightly wealth screenings — using software that culls public data such as property records, contributions to political campaigns and other charities — to gauge which patients are most likely to be the source of large donations.
Those who seem promising targets for fundraising may receive a visit from a hospital executive in their rooms, as well as extra amenities like a bathrobe or a nicer waiting area for their families.
Some hospitals train doctors and nurses to identify patients who have expressed gratitude for their care, and then put the patients in touch with staff fundraisers.
These various tactics, part of a strategy known as "grateful patient programs," make some people uncomfortable. "Wealth screenings strike me as unseemly but not illegal or unethical," said Arthur Caplan, a bioethicist at the New York University School of Medicine.
Mark Rothstein, a bioethics professor at the University of Louisville, said, "Getting physicians involved in philanthropy is something fraught with danger." He added that it could make patients worry that their care might be affected by whether they made a donation.
Despite such concerns, these practices are becoming commonplace, particularly among the largest nonprofit hospitals. A 2016surveyof 108 hospitals found that 68 had grateful patient programs, according to the Advisory Board, a consulting firm.
"In the last 10 years we’ve seen a pretty dramatic uptick in strategic attention in the formation of these programs," said Nicholas Cericola, a senior consultant with the firm.
Large hospitals that say they screen patients' wealth include those run by MedStar Health in Columbia, Md.; the Johns Hopkins Hospital in Baltimore; Cedars-Sinai in Los Angeles; and NYU Langone Medical Center in New York.
Donations from patients and their families supplement income streams from private and public insurance programs as well as money raised through traditional methods like charity golf tournaments, dinners or gala balls.
"It's a way to get money to the hospital's bottom line like nothing else they are doing," said Bill Tedesco, chief executive officer of DonorSearch, a Maryland company that supplies hospitals with software that helps them conduct wealth screenings.
'Get-To-Know-You Opportunity'
Patients and their families were responsible for two-thirds of the $34 million donated to the Sharp HealthCare hospital system in San Diego last year, saidBill Littlejohn, chief executive officer of the system's fundraising foundation.
Wealth screening and the participation of the hospital's doctors are crucial, Littlejohn said. Sharp screens up to 400 patients each night, he said, and adds about 10 to 20 to its database of potential donors.
When he approaches wealthy patients in the hospital, they are unlikely to know that they were selected with the aid of the wealth screening, according to Littlejohn.
"I'm not asking them for money, but I tell them we appreciate them choosing Sharp and hope they have a wonderful experience," he said. "I use this as a get-to-know-you opportunity and let them know Sharp is a nonprofit and philanthropic-supported institution."
Littlejohn estimates that doctors prompted 20% of patient donations through conversations with their own patients. The practice has helped Sharp triple its annual fundraising totals from a decade ago, he said.
Nationwide, donations to hospitals exceeded $10.4 billion in 2017, up from $6 billion in 2004, according to the Association for Healthcare Philanthropy.
"Grateful patients have always been there, but we did not always do as good a job of inviting them to be part of our missions as we are now doing," Alice Ayres, the trade group's chief executive officer, said. She attributed the increased fundraising to grateful patients programs as well as to a shift away from event-driven efforts, a focus on larger gifts and overall economic growth in the United States.
Change In Privacy Law Facilitates Fundraising
A 2013 change in federal health privacy law made it easier for hospitals to target their patients for donations. It enabled hospital records departments to share with staff fundraisers some personal details of patients, including their health insurance status, the department treating them, the name of their physician and the outcome of their care.
When patients are admitted, they typically sign a raft of papers that include permission for the hospital to use this information for fundraising. While the 2013 law requiredhospitals to inform patients that they could decline to be solicited by fundraisers, few patients are aware of this, said Deven McGraw, a former deputy director of health information privacy at the federal Department of Health and Human Services. And, she said, few appear to realize that their wealth may be assessed for fundraising.
Many hospitals send solicitation letters to all of their insured patients, including those with little desire — or ability — to make donations.
St. Clair Hospital in Pittsburgh treated Marcy Grupp in its emergency room for three hours in May for a painful kidney stone, providing a computerized tomography scan, among other tests. Medicare paid the bill.
A month later, the hospital sent Grupp, a retired television engineer, a letter asking for a donation to honor a doctor or other caregiver. "We encourage you to please consider honoring their efforts with a 'gift of gratitude,' by making a donation to St. Clair Hospital," the letter said.
Grupp, 66, said she wasn't rich, and was disturbed by the letter.
"I kind of resent it," she said. "I don't think they need the money." The hospital last year reported nearly $48 million in net income and paid its chief executive officer $1 million.
"I thought the care I got was good and the doctors I had were good, but I don't see why I need to pay in addition to what I've already paid," Grupp said. St. Clair executives declined to comment.
Dr. Patricia Lech, a retired surgeon, underwent a successful joint replacement operation at New England Baptist Hospitalin Boston in August 2017. Several months later, she received a letter from the hospital asking her to make a donation to honor one of her doctors.
Lech, 58, said the letter had left the impression that her doctor would directly benefit from the donation, which was not the case. "I did not like the implication that doctors would get rewarded when they really aren't," she said.
Morgan Herman, vice president of philanthropy at New England Baptist, acknowledged that the hospital solicited former patients but said that did not affect patient care. "There is no connection," she said.
Unease Among Doctors
Many doctors are uneasy about being asked to help raise money from their patients, studies show.
"It makes doctors very uncomfortable for a lot of reasons — No. 1 is that the doctor is there to see the patient for a problem they have and not to ask the patient for money," said Dr. Rosalyn Stewart, an internist at Johns Hopkins who has researched physician attitudes at Hopkins toward the practice.
She said she worried that if a wealthy patient made a large donation, doctors would feel obligated to treat them differently, perhaps by returning their calls more quickly.
"I feel like the risk is we are setting up a two-tiered healthcare system — one for wealthy patients and one for everyone else," Stewart said.
While wealth screenings have been used for decades for fundraising by universities and other nonprofits, ethicists said they raised different concerns for hospitals.
"Needing healthcare is different than choosing to go to college or going to the opera," said Nancy Berlinger, a bioethicist with the Hastings Center, a think tank in Garrison, N.Y. "When you are sick, you need a trusting relationship to be formed and focused on your health. There is a vulnerability there that is not present in other nonprofits."
Dr.Frederick Finelli, a surgeon and the vice president of medical affairs at MedStar Health's Montgomery Medical Center in Maryland, said that while he used to feel uncertain about fundraising, he now saw it as part of the healing process.
"When someone says 'Thanks' to me, it feels incomplete for me to just tell them, 'No problem' or 'I was just doing my job,'" he said. "Talking to patients about philanthropic or volunteer needs is good for patients."
Some patients say they are happy that they were asked for money.
For example, Martin Faga, 77, was treated at Inova Fairfax Hospital in Virginia last year for serious heart problems. A retired president of Mitre, a large nonprofit federal contactor, Faga repeatedly praised his bedside nurses for their care, he said.
When one of those nurses sent an email about this to Mary Myers, a hospital fundraiser, she visited Faga's room to chat about the role of philanthropy and arranged to meet him at his home a few weeks later, Myers said.
Faga wasn't initially interested in making a large donation, he said, because he didn't believe that the nonprofit health system — the largest in Northern Virginia, with five hospitals and $3 billion in annual revenue in 2016 — needed the money. But he said he had changed his mind after Myers told him that such donations were essential for staff training and buying equipment, and has donated $200,000 to the hospital.
"I would still have been in the small-donation category of a couple hundred dollars if not for Mary and the educational process," he said.
The next presidential primary contests are more than a year away. But presumed candidates are already trying to stake a claim to one of health care's hot-button concerns: surging prescription drug prices.
"This is a 2020 thing," said Dr. Peter Bach, who directs the Center for Health Policy and Outcomes at Memorial Sloan Kettering Cancer Center in New York and tracks drug-pricing policy.
Spurred on by midterm election results that showed healthcare to be a deciding issue, lawmakers — some of whom have already launched presidential run exploratory committees — are pushing a bevy of new proposals and approaches.
Few if any of those ideas will likely make it to the president's desk. Nevertheless, Senate Democrats eyeing higher office and seeking street cred in the debate are devising more innovative and aggressive strategies to take on Big Pharma.
"Democrats feel as if they’re really able to experiment," said Rachel Sachs, an associate law professor at Washington University in St. Louis who tracks drug-pricing laws.
Some Republicans are also proposing drug-pricing reform, although experts say their approaches are generally less dramatic.
Here are some of the ideas either introduced in legislation or that senators’ offices confirmed they are considering.
Make a public option for generic drugs. The government could manufacture generics (directly or through a private contractor) if there is a shortage or aren’t enough competitors to keep prices down. This comes from a bill put forth by Sen. Elizabeth Warren (D-Mass.) and Rep. Jan Schakowsky (D-Ill.).
Let Medicare negotiate drug prices. This idea has many backers — what differs is the method of enforcement. Sen. Sherrod Brown (D-Ohio) has suggested that if the company and the government can’t reach an agreement, the government could take away the company’s patent rights. A proposal from Sen. Bernie Sanders (I-Vt.) and Rep. Elijah Cummings (D-Md.) would address stalled negotiations by letting Medicare pay the lowest amount among: Medicaid's best price, the highest price a single federal purchaser pays or the median price paid for a specific drug in France, the United Kingdom, Germany, Japan and Canada.
Pay what they do abroad. Legislation from Sanders and Rep. Ro Khanna (D-Calif.) would require companies to price their drugs no higher than the median of what’s charged in Germany, Japan, France, the United Kingdom and Canada. If manufacturers fail to comply, other companies could get the rights to make those drugs, too.
Penalize price-gouging. This would target manufacturers who raise drug prices more than 30% in five years. Punishments could include requiring the company to reimburse those who paid the elevated price, forcing the drugmaker to lower its price, or charging a penalty up to three times what a company received from boosting the price. Backers include Sens. Richard Blumenthal (D-Conn.), Kamala Harris (D-Calif.), Jeff Merkley (D-Ore.) and Amy Klobuchar (D-Minn.).
Import drugs. A Sanders-Cummings bill would let patients, wholesalers and pharmacies import drugs from abroad — starting with Canada, and leaving the door open for some other countries. Sen. Chuck Grassley (R-Iowa) and Klobuchar have a separate bill that is specific to patients getting medicine from Canada alone.
Abolish "pay-for-delay." From Grassley and Klobuchar, this legislation would tackle deals in which a branded drugmaker pays off a generic one to keep a competing product from coming to market.
This flurry of proposed lawmaking could add momentum to one of the few policy areas in which conventional Washington wisdom suggests House Democrats, Senate Republicans and the White House may be able to find common ground.
"Everything is up in the air and anything is possible," said Dr. Walid Gellad, co-director of the Center for Pharmaceutical Policy and Prescribing at the University of Pittsburgh. "There are things that can happen that maybe weren’t going to happen before."
And there's political pressure. Pollsconsistently suggest voters have a strong appetite for action. As a candidate, President Donald Trump vowed to make drug prices a top priority. In recent months, the administration has taken steps in this direction, like testing changes to Medicare that might reduce out-of-pocket drug costs. But Congress has been relatively quiet, especially when it comes to challenging the pharmaceutical industry, which remains one of Capitol Hill's most potent lobbying forces.
One aspect of prescription drug pricing that could see bipartisan action is insulin prices, which have skyrocketed, stoking widespread outcry and could be a target for bipartisan work. Warren's legislation singles out the drug as one the government could produce, and Cummings has already called in major insulin manufacturers for a drug-pricing hearing later this month. In addition, Rep. Diana DeGette (D-Colo.), the new chair of the House Energy and Commerce Oversight and Investigations Subcommittee, has listed prescription drug pricing as a high priority for her panel. As co-chair of the Congressional Diabetes Caucus, DeGette worked with Tom Reed (R-N.Y.) to produce a report on the high cost of insulin.
To be sure, some of the concepts, such as drug importation and bolstering development of generic drugs, have been around a long time. But some of the legislation at hand suggests a new kind of thinking.
Meanwhile, in the GOP-controlled Senate, two powerful lawmakers — Sen. Lamar Alexander (R-Tenn.) and Grassley — have indicated they want to use their influence to tackle the issue. Alexander, who chairs the Health, Education, Labor and Pensions Committee, has said cutting health care costs, including drug prices, will be high on his panel's to-do list this Congress. Grassley runs the Finance Committee, which oversees pricing issues for Medicare and Medicaid.
"The solution to high drug prices is not just having the government spending more money. … You need to look at prices," Gellad said. "These proposals deal with price. They all directly affect price."
Given the drug industry’s full-throated opposition to virtually any pricing legislation, Sachs said, "it is not at all surprising to me to see the Democrats start exploring some of these more radical proposals."
Still, though, Senate staffers almost uniformly argued that the drug-pricing issue requires more than one single piece of legislation.
For instance, the price-gouging penalty spearheaded by Blumenthal doesn't stop drugs from having high initial list prices. Letting Medicare negotiate doesn't mean people covered by other plans will necessarily see the same savings. Empowering the government to produce competing drugs doesn't promise to keep prices down long term and doesn't guarantee that patients will see those savings.
"We need to use every tool available to bring down drug prices and improve competition," said an aide in Warren’s office.
KHN’s coverage of prescription drug development, costs and pricing is supported in part by the Laura and John Arnold Foundation.
The White House this week launched an investigation into surprise medical bills after President Trump met with patients who'd been charged outrageous fees for out-of-network healthcare services.
President Donald Trump on Wednesday instructed administration officials to investigate how to prevent surprise medical bills, broadening his focus on drug prices to include other issues of price transparency in healthcare.
Flanked by patients and other guests invited to the White House to share their stories of unexpected and outrageous bills, Trump tasked his health secretary, Alex Azar, and labor secretary, Alex Acosta, with working on a solution, several attendees said.
"The pricing is hurting patients, and we've stopped a lot of it, but we're going to stop all of it," Trumpsaid during a roundtable discussion when reporters were briefly allowed into the otherwise closed-door meeting.
David Silverstein, the founder of a Colorado-based nonprofit called Broken Healthcare who attended, said Trump struck an aggressive tone, calling for a solution with "the biggest teeth you can find."
"Reading the tea leaves, I think there's big change coming," Silverstein said.
Surprise billing, or the practice of charging patients for care that is more expensive than anticipated or not covered by their insurance, has received a flood of attention in the past year, particularly as Kaiser Health News and other news organizations have undertaken investigations into patients’ most outrageous medical bills.
Attendees said each of 10 invited guests — among them patients as well as doctors with their own stories of unexpected bills — was given an opportunity to talk, though Trump did not stay to hear all of their stories during the roughly hourlong gathering.
The group included Paul Davis, a retired doctor from Findlay, Ohio, whose family's experience with a $17,850 bill for a simple urine test was detailed in a KHN-NPR “Bill of the Month” featurelast year.
Davis' daughter, Elizabeth Moreno, was a college student in Texas when she had spinal surgery to remedy debilitating back pain. After the surgery, she was asked to provide a urine sample and later received a bill from an out-of-network lab in Houston that tested it. Experts said such tests rarely cost more than $200, not nearly what the lab charged Moreno and her insurance company. But fearing damage to his daughter's credit, Davis paid the lab $5,000 and filed a complaint with the Texas attorney general's office, alleging "price gouging of staggering proportions."
Davis said White House officials made it clear that price transparency is a "high priority" for Trump, and while they did not see eye to eye on every subject, he said he was struck by their sincerity.
"These people seemed earnest in wanting to do something constructive to fix this," Davis said.
Dr. Martin Makary, a surgeon and health policy expert at Johns Hopkins University who has written about transparency in healthcare and attended the meeting, said it was a good opportunity for the White House to hear firsthand about a serious and widespread issue.
"This is how most of America lives, and [Americans are] getting hammered," he said.
Trump has often railed against high prescription drug prices but has said less about other problems with the nation's health care system. In October, shortly before the midterm elections, he unveiled a proposal to tie the price Medicare pays for some drugs to the prices paid for the same drugs overseas, for example.
Trump, Azar and Acosta said efforts to control costs in healthcare were yielding positive results, discussing in particular the expansion of association health plans and the new requirement that hospitals post their list prices online. The president also took credit for the recent increase in generic drug approvals, which he said would help lower drug prices.
Discussing the partial government shutdown, Trump said Americans "want to see what we’re doing, like today we lowered prescription drug prices, first time in 50 years," according to a White House pool report.
However, as STAT pointed out in a recent fact check, the report from which that claim was gleaned said "growth in relative drug prices has slowed since January 2017," not that there was an overall decrease in prices.
Annual increases in overall drug spending have leveled off as pharmaceutical companies have released fewer blockbuster drugs; patents have expired on brand-name drugs; and the waning effect of a spike driven by the release of astronomically expensive drugs to treat hepatitis C. Drugmakers are also wary of increasing their prices in the midst of growing political pressure.
Since Democrats seized control of the House of Representatives this month, party leaders have rushed to announce investigations and schedule hearings dealing with healthcare, focusing in particular on drug costs and protections for those with preexisting conditions.
Last week, the House Oversight Committee announced a "sweeping" investigation into drug prices, pointing to an AARP report saying the vast majority of brand-name drugs had more than doubled in price between 2005 and 2017.
KHN correspondents Shefali Luthra and Jay Hancock contributed to this report.
The Medical Board of California has launched investigations into doctors who prescribed opioids to patients who, perhaps months or years later, fatally overdosed.
The effort, dubbed “the Death Certificate Project,” has sparked a conflict with physicians in California and beyond, in part because the doctors being investigated did not necessarily write the prescriptions leading to a death. The project is one of a kind nationally, although a much more limited program is operated by North Carolina’s board.
So far, the board has launched investigations into the practices of about 450 physicians and referred the names of 72 nurse practitioners, physician assistants and osteopathic physicians to their respective licensing boards.
To date, the regulators have formally accused at least 23 doctors of negligent prescribing, and more accusations are expected. Some of the accusations, like one 63-page document filed against Dr. Frank Gilman, a San Diego internist, detail hundreds of prescriptions for one patient over four years, most of them by him. Gilman did not respond to a request for comment.
Using terms such as "witch hunt" and "inquisition," many doctors said the project is leading them or their peers to refuse patients’ requests for painkiller prescriptions — no matter how well documented the need — out of fear their practices will come under disciplinary review.
The project, first reported by MedPage Today, has struck a nerve among medical associations. Dr. Barbara McAneny, the American Medical Association president and an Albuquerque, N.M., oncologist whose cancer patients sometimes need treatment for acute pain, called the project "terrifying." She said "it will only discourage doctors from taking care of patients with pain."
The influential California Health Care Foundation also has pushed back against the project, saying it could harm patients. (California Healthline is an editorially independent publication of the California Health Care Foundation.)
Unusually aggressive for the board, the program is a reaction to the by now well-known phenomenon of physicians overprescribing opioids. Nationally, a host of policy changes and educational efforts have driven down the rate of opioid prescriptions in recent years.
The goal of California’s program, quietly launched four years ago, is not necessarily to link a doctor's specific prescription to a specific patient’s death — although many of the cases do — but to find doctors whose patterns of prescribing are so dangerous they may lead to patients' ultimately fatal addictions.
Sometimes a doctor was earmarked for investigation even though the cause of death included multiple drugs prescribed by many physicians, or suicide by overdose, board documents indicate.
Kimberly Kirchmeyer, executive director of the Medical Board of California, defended the project. She said the effort has found patternsof "gross negligence," incompetenceand excessive prescribing.
"I understand their frustrations," she said of the complaining doctors, "but we do have to continue our role with consumer protection."
She noted that part of the point of the project is to educate doctors and, through probation requirements, change the behavior of those who prescribe excessively.
"That's education that could potentially save patients in the future," said Kirchmeyer, whose agency licenses some141,000doctors.
Some consumer groups consider the board’s bold effort to find overprescribing doctors not aggressive enough.
"It's long overdue," said Carmen Balber, executive director of the nonprofit Consumer Watchdog. The board should investigate opioid-related deaths that occurred more recently, she said: "They need to get their act together and speed things up."
The agency thus far has looked at deaths only in 2012 and 2013 in which opioids were confirmed as a cause or contributing cause. It matched the names of the dead with the prescription drugs they filled, which are listed in the state’s prescription database. The database also shows the names of the doctors who prescribed to them. Physician experts reviewed those doctors’ prescribing history and selected those who appeared to prescribe drugs heavily.
Some doctors said they were especially angered that the letters they received concerned prescriptions they wrote as long as nine years ago.
McAneny, of the AMA, noted that prescribing practices now deemed unacceptable came out of public policies years ago that "compelled doctors to treat pain more aggressively for the comfort of our patients." Also, payers have measured quality of care by whether their patients answered surveys about whether their pain was well-controlled.
"We’re [already] doing a lot of education to undo the damage" from those policies, she said.
Similarly, Dr. David Aizuss, a Los Angeles ophthalmologist who is president of the California Medical Association, said state and federal guidelines that took effect in 2014 and 2016 impose much more stringent prescribing precautions than “what was going on six or seven years ago.”
Many insurance plans and pharmacies in recent years have restricted dosages and durations of certain painkillers a physician may prescribe at one time.
The crackdown on doctors has created fear, saidDr. Robert Wailes, a pain medicine specialist in Encinitas and chair of the California Medical Association’s Board of Trustees.
"What we're finding is that more and more primary care doctors are afraid to prescribe and more of those patients are showing up on our doorsteps," he said.
Officially, the CMA stops short of saying the medical board should stop the project, perhaps to avoid any perception that the association condones overprescribing. But it has asked the board to hire an independent reviewer to assess the criteria the board is using to decide which physicians to investigate, and whether physicians in certain specialties or regions of the state are being targeted more than others.
Dr. Ako Jacintho, a San Francisco addiction medicine specialist, was notified by the board that he was in trouble over a year ago. A patient for whom he had prescribed methadone fatally overdosed in 2012. The letter said "a complaint" had been filed against him, and asked him to respond to the allegations or, if he delayed, face a citation or fine of $1,000 per day. (The medical board can file its own complaints against a doctor.)
The letter said the patient had died of "acute combined methadone and diphenhydramine intoxication." Jacintho had refilled the patient's prescription for methadone the day before but said a 10-milligram pill was not a toxic dose. And he said he never prescribed diphenhydramine, the antihistamine sold as Benadryl.
"The only way he would have died was if he had not taken it as directed, or had mixed it with a medication that was not prescribed," Jacintho said.
As of Dec. 21, Jacintho was still waiting to hear if he would face a formal accusation.
Last year, the board rewrote those letters in a less accusatory tone — describing the "review" as routine — although it still threatens doctors with $1,000 fines. In a much smaller subset of cases, it finds problems that result in formal accusations that can result in discipline, such as public reprimands or restrictions on a physician's ability to practice.
Despite its designation as a "Death Certificate Project," the California effort has not focused only on doctors whose patients died. In an unknown number of overdose cases, the board has sentletters to living patients asking them to authorize their doctors to relinquish their medical records to the board, adding that those documents would otherwise be subpoenaed.
Dr. Paul Speckart, a San Diego internist, said three of his patients last year received board letters that seemed to question his quality of care when all he did was try to relieve their well-documented pain. The board has not filed any accusations against him.
"You can't even begin to understand how disrupting and upsetting this is," Speckart said. "It's not just a threat on your license; it's a threat that you've not been a good physician."
The legalization of gay marriage began in a few states and quickly became national policy. Marijuana legalization seems to be headed in the same direction. Could reforming healthcare follow the same trajectory?
Last week, California’s new governor, Gavin Newsom, promised to pursue a smörgåsbord of changesto his state's healthcare system: state negotiation of drug prices, a requirement that every Californian have health insurance, more assistance to help middle-class Californians afford it and healthcare for undocumented immigrants up to age 26.
The proposals fell short of the sweeping government-run single-payer plan Newsom had supported during his campaign — a system in which the state government would pay all the bills and effectively control the rates paid for services. (Many California politicians before him had flirted with such an idea, before backing off when it was estimated that it could cost $400 billiona year.) But in firing off this opening salvo, Newsom has challenged the notion that states can't meaningfully tackle healthcare on their own. And he's not alone.
A day later, Gov. Jay Inslee of Washington proposed that his state offer a public plan, with rates tied to those of Medicare, to compete with private offerings.
New Mexico is considering a plan that would allow any resident to buy in to the state's Medicaid program. And this month, Mayor Bill de Blasio of New York announced a plan to expand healthcare access to uninsured, low-income residents of the city, including undocumented immigrants.
For over a decade, we've been waiting for Washington to solve our healthcare woes, with endless political wrangling and mixed results. Around 70 percent of Americans have said that healthcare is "in a state of crisis" or has "major problems." Now, with Washington in total dysfunction, state and local politicians are taking up the baton.
The legalization of gay marriage began in a few states and quickly became national policy. Marijuana legalization seems to be headed in the same direction. Could reforming healthcare follow the same trajectory?
States have always cared about healthcare costs, but mostly insofar as they related to Medicaid, since that comes from state budgets. "The interesting new frontier is how states can use state power to change the health care system," said Joshua Sharfstein, a vice dean at Johns Hopkins Bloomberg School of Public Health and a former secretary of the Maryland Department of Health and Mental Hygiene. He added that the new proposals "open the conversation about using the power of the state to leverage lower prices in healthcare generally."
Already states have proved to be a good crucible for experimentation. Massachusetts introduced "Romneycare," a system credited as the model for the Affordable Care Act, in 2006. It now has the lowest uninsured rate in the nation, under 4 percent. Maryland has successfully regulated hospital prices based on an "all payer" system.
It remains to be seen how far the West Coast governors can take their proposals. Businesses — pharmaceutical companies, hospitals, doctors' groups — are likely to fight every step of the way to protect their financial interests. These are powerful constituents, with lobbyists and cash to throw around.
The California Hospital Association came out in full supportof Newsom's proposals to expand insurance (after all, this would be good for hospitals' bottom lines). It offered a slightly less enthusiastic endorsement for the drug negotiation program (which is less certain to help their budgets), calling it a "welcome" development. It's notable that his proposals didn’t directly take on hospital pricing, even though many of the state's medical centers are notoriously expensive.
Giving the state power to negotiate drug prices for the more than 13 million patients either covered by Medicaid or employed by the state is likely to yield better prices for some. But pharma is an agile adversary and may well respond by charging those with private insurance more. The governor's plan will eventually allow some employers to join in the negotiating bloc. But how that might happen remainsunclear.
The proposal by Washington Gov. Inslee to tie payment under the public option plans to Medicare's rates drew "deep concern" from the Washington State Medical Association, which called those rates "artificially low, arbitrary and subject to the political whims of Washington, D.C."
On the bright side, if Newsom or Inslee succeeds in making healthcare more affordable and accessible for all with a new model, it will probably be replicated one by one in other states. That's why I'm hopeful.
In 2004, the Canadian Broadcasting Corp. conducted an exhaustive nationwide poll to select the greatest Canadian of all time. The top-10 list included Wayne Gretzky, Alexander Graham Bell and Pierre Trudeau. No. 1 is someone most Americans have never heard of: Tommy Douglas.
Douglas, a Baptist minister and left-wing politician, was premier of Saskatchewan from 1944 to 1961. Considered the father of Canada's health system, he arduously built up the components of universal healthcare in that province, even in the face of an infamous 23-day doctors' strike.
In 1962, the province implemented a single-payer program of universal, publicly funded health insurance. Within a decade, all of Canada had adopted it.
The United States will presumably, sooner or later, find a model for healthcare that suits its values and its needs. But 2019 may be a time to look to the states for ideas rather than to the nation's capital. Whichever state official pioneers such a system will certainly be regarded as a great American.
Kaiser Health News is a national health policy news service that is part of the nonpartisan Henry J. Kaiser Family Foundation. KHN's coverage in California is supported in part by Blue Shield of California Foundation.
Lisa Crook was lucky. She saved $800 last year after her insurance company started covering a new, less expensive insulin called Basaglar that was virtually identical to the brand she had used for years.
The list price for Lantus, a long-acting insulin made by Sanofi that she injected once a day, had nearly quadrupled over a decade.
With Basaglar, "I've never had my insulin cost drop so significantly," said Crook, a legal assistant in Dallas who has Type 1 diabetes.
But many people with diabetes can't get the deal Crook got. In a practice that policy experts say smothers competition and keeps prices high, drug companies routinely make hidden pacts with middlemen that effectively block patients from getting cheaper generic medicines.
Such agreements "make it difficult for generics to compete or know what they're competing against," said Stacie Dusetzina, an associate professor of health policy at Vanderbilt University School of Medicine.
Here's how it works: Makers of established brands give volume-based rebates to insurers or intermediaries called pharmacy benefit managers. In return, those middlemen often leave competing generics off the menu of drugs they cover, called a formulary, or they jack up the price for patients. The result is that many can't get the cheaper drugs unless they shoulder a bigger copay or buy them with no help from insurance.
Brand-drug sellers "pay for position" on the formulary, said Michael Rea, CEO of Rx Savings Solutions, which helps health plans and employers manage pharma costs. "In this country, the most cost-effective drugs don't necessarily mean anyone will have access to them … [Companies with] the deepest pockets win."
This so-called rebate trap joins a long history of efforts by makers of brand-name drugs to stifle generics, including protecting drugs with multiple layers of dubious patents, "pay for delay" deals to keep generics off the market and withholding key ingredients needed for generic production, critics say.
Because rebate contracts are secret, nobody knows the full extent of the practice nor how much it costs the health system in unrealized savings.
"The deals between the drug companies and the PBM middle players are guarded as fiercely as Fort Knox," said Robin Feldman, a law professor at the University of California, Hastings College of the Law, who studies pharma policy. "No one gets to see them."
But new research is turning up plenty of evidence of rebates distorting the market, such as numerous instances of effective, less expensive generics missing from formularies or patients burdened with higher out-of-pocket costs for generic drugs.
In unpublished research, Dusetzina found that only 17 percent of Medicare plans for seniors covered Basaglar, the biosimilar launched by Eli Lilly two years ago. Nearly all of them covered brand-name Lantus, sold by Sanofi, as of early last year.
Her research suggests rebates from Sanofi might have induced insurers to leave lower-priced Basaglar off their formularies, Dusetzina said.
Sanofi works with insurers and pharmacy benefit managers "to negotiate access for patients to our portfolio of products including Lantus," said company spokesman Jon Florio, declining to disclose specifics.
What's a pharmacy benefit manager? Watch our explainer.
Medicare plans covering Lantus but not Basaglar include numerous offerings from Anthem, the biggest for-profit, Blue Cross and Blue Shield insurer.
"After evaluating the total cost impact on consumers, taxpayers and the government, we chose to cover the brand drug, Lantus, over the biosimilar, Basaglar," said Anthem spokeswoman Lori McLaughlin.
Replacement versions of complex drugs often made from living cells are called biosimilars, not generics. Basaglar is considered clinically equivalent to Lantus but, because of a legal wrinkle, won't technically be considered a biosimilar by regulators until 2020.
Merck scrapped its own biosimilar version of Lantus last fall, despite receiving tentative approval by the Food and Drug Administration, after "assessing … the market environment," the company said.
Coverage of Lilly's Basaglar has grown, and the drug is now included in formularies used by slightly more than half the patients who have health insurance, said Eli Lilly spokesman Greg Kueterman.
In another forthcoming study, this one examining 2018 Medicare coverage, researchers at Johns Hopkins Bloomberg School of Public Health found that "almost every plan has at least one branded drug on the formulary that's in a better place than the generic," said Gerard Anderson, the professor leading the research.
(A grant from the Laura and John Arnold Foundation, which helps support Kaiser Health News, financed the Hopkins research.)
In 2015, only 19 percent of generic drugs covered by Medicare were in the preferred formulary tiers with the lowest out-of-pocket costs, found a study last year by consultants Avalere. In 2011, on the other hand, 71 percent of generics had been in the best tier, which helps determine what patients are prescribed.
The Association for Accessible Medicines, the generic drug lobby, paid for that study. Rebate-influenced barriers to generics are "increasingly problematic," said AAM CEO Chip Davis.
Disputes over formulary choices have hit the courts. Pfizer sued Johnson & Johnson in 2017, alleging that rebates induced insurers to prefer Remicade, an anti-inflammatory biologic, at the expense of Pfizer's lower-priced product.
Critics of rebate traps include top Trump administration officials, under pressure from a president who has promised to lower drug prices.
Because quick rebates from brands are often more attractive to PBMs and insurers than long-term savings from generics, "this is a real challenge in terms of biosimilars coming to market and gaining market share" Scott Gottlieb, head of the FDA, said in an interview.
Such objections add to a crescendo of grievances against hidden rebates. Consumers and advocates have complained for years that rebates cut costs for PBMs and insurers but do little for patients, who are often left paying their out-of-pocket share based on soaring list prices.
Crook's out-of-pocket costs for Lantus rose steadily over the years to about $900 annually, she said. After switching to Basaglar last year, her cost was less than $100.
Mark Gooley, who has Type 1 diabetes and lives in Florida, said he started ordering Lantus by mail from Canada after the U.S. list price rose fourfold in a little more than a decade.
"I have a very low opinion of companies like Sanofi," he said. "They could afford to sell it to me when it came out" at a much lower price, he said. "Inflation has not been 400 percent."
Because of rebates paid to PBMs, Sanofi's net price for Lantus has actually decreased over the past five years despite the list-price increases, said company spokesman Florio. "Unfortunately, these savings are not consistently passed through to patients," he said.
PBMs say they respond to the terms drug companies offer and negotiate to save billions for government, insurers and employers. "Simply put, the easiest way to lower costs would be for drug companies to lower their prices," the Pharmaceutical Care Management Association, the PBM lobby, said in an emailed statement.
For its part, PhRMA, the branded-drug association, has said it wants to scrap the rebate system and have PBMs paid for services provided.
Congress has done little to fix the rebate problem despite widespread criticism, but senior legislators in both chambers have pledged to address high drug prices this year.
Last summer, the Department of Health and Human Services proposed changing "safe harbor" protections that shield pharma rebates from being viewed as illegal kickbacks. But the proposal, under review at the Office of Management and Budget since July, has never been publicly aired, leaving the industry to wonder how substantial it is and if it will ever take effect.
Joseph Daskalakis' son was born New Year's Eve, a little over a week into the current government shutdown, and about 10 weeks before he was expected.
Little Oliver ended up in a specialized neonatal intensive care unit, the only one that could care for him near their home in Lakeville, Minn.
But air traffic controller Daskalakis, 33, has an additional worry: The hospital where the newborn is being treated is not part of his current insurer's network and the partial government shutdown prevents him from filing the paperwork necessary to switch insurers, as he would otherwise be allowed to do. He could be on the hook for a hefty bill — while not receiving pay. Daskalakis is just one example of federal employees for whom being unable to make changes to their health plans really matters.
Although the estimated 800,000 government workers affected by the shutdown won't lose their health insurance, an unknown number are in limbo, like Daskalakis, unable to change insurers because of unforeseen circumstances; add family members such as spouses, newborns or adopted children to an existing health plan; or deal with other issues that might arise.
"With 800,000 employees out there, I imagine that this is not a one-off event," said Dan Blair, who served as both acting director and deputy director of the federal Office of Personnel Management (OPM) during the early 2000s and is now senior counselor at the Bipartisan Policy Center. "The longer this goes on, the more we will see these types of occurrences."
While Oliver is getting stronger every day — he's now out of the ICU, according to Daskalakis' local air traffic union representative — it's unclear how the situation will affect his family's finances.
That's because out-of-network charges are generally far higher than being in-network, and NICU care is enormously expensive no matter what. Those bills could add up, especially as his current insurance has an out-of-pocket maximum of $12,000 annually. Because Oliver was born before the new year, the family could face that amount for 2018 — and 2019.
Daskalakis isn't getting paid, either.
"I don't know when I'll be able to change my insurance, or when I'll get paid again," Daskalakis wrote Sen. Tina Smith (D-Minn.), who shared his letter on Facebook and before the Senate last week.
Other families are also worried about paperwork delays, and the financial and medical effects a prolonged shutdown could cause.
Dania Palanker, a health policy researcher at Georgetown's Center on Health Insurance Reforms, studies what happens when families face insurance difficulties. Now she's also living it.
After arranging to reduce her work hours because of health problems, Palanker knew her family would not qualify for coverage through her university job. No problem, she thought, as she began the process in December to enroll her family into coverage offered by her husband's job with the federal government.
"We could not get the paperwork in time to apply for special enrollment through the government and get it processed before the shutdown," Palanker said.
Georgetown allowed her to boost her work hours this month to keep the family insured through January, but Georgetown's share of her coverage will end in February.
Her treatments are expensive, so she is likely to hit or exceed her annual $2,000 deductible in January — then start over with another annual deductible once the family secures new coverage.
"I'm postponing treatment in hopes that it is just a month and I'm back on the federal plan in February, but I can't postpone indefinitely, as my condition will get worse," said Palanker, who has an autoimmune disease that causes nerve damage.
Overseeing federal health benefits programs is within the purview of the OPM, whose data hub is operational, according to a spokeswoman. But getting information to that data hub to make the kind of changes Daskalakis, Palanker and others need depends on the individual agencies that employ government workers.
The OPM has told government agencies "that they should have HR staff available during the lapse, specifically to process" such requests, which are called "qualifying life events," the spokeswoman said.
In a written statement Wednesday, Smith said: "Oliver's story is a powerful reminder that hundreds of thousands of real families have had their financial and personal lives turned upside down by this unnecessary shutdown." She called on the president to come back to the negotiating table.
For Daskalakis, there is some good news.
Tony Walsh, his union rep, said the OPM website and Daskalakis' insurer both indicated that the air traffic controller's request to change carriers so the hospital will be in-network will be retroactive to Oliver's birthday, and the out-of-network charges may not play a role.
Just to be safe, "Joe is currently working on an insurance appeal based on no in-network care [being available]," Walsh said in an emailed statement. The family has already received an initial $6,000 bill from the hospital, Walsh noted, saying the charges do not include costs associated with Oliver's birth or his stay in the intensive care unit.
Walsh said the shutdown is affecting a broad swath of employees in ways many lawmakers had never anticipated.
The workers "are essential to the system, and it's unfair they are being treated this way," he said.