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Every patient deserves to get the medications they need at a cost they can afford, but drug makers are gaming well-intentioned legislation to generate outsized profits from drugs intended to treat a small population of patients with rare diseases. Now more than ever we need lawmakers to revisit the Orphan Drug Act. We must balance the incentives to develop new treatments for rare diseases while preventing drug makers from exploiting the system with launch prices that defy gravity, blocking competition, and increasing their prices on the same products year after year."   Matt Eyles, President and CEO, AHIP
 

Tidbits
$123,543 For Little Orphan Rx and Daddy Pharmbucks 
A new report could be scripted, with apologies to "Annie", to portray Little Orphan Rx, the ward of Daddy Pharmbucks, as she belts out in song "Prices will go up tomorrow, bet your bottom dollar that tomorrow will cost more." AHIP this week released a twelve-page Issue Brief: The Rise of Orphan Drugs that found "the prices for drugs to treat rare medical conditions are 25 times more expensive than traditional drugs. That is a 26-fold increase in two decade," and "that orphan drugs are now entering the market at higher prices than ever before, ranging from tens-of-thousands to hundreds-of-thousands of dollars per patient."

J.D. Power 2019 U.S. Pharmacy Satisfaction Study Mail Order Satisfaction Index Ranking

AHIP frames their discussion by reminding us "the Orphan Drug Act was passed in 1983 to encourage pharmaceutical manufacturers to invest in treatments for rare diseases and conditions – so-called “orphan diseases” - that had been ignored because their small patient populations (fewer than 200,000 Americans) made them unprofitable. The intent was to create incentives to encourage drug makers to develop treatments for rare diseases by enabling them to realize a modest profit. Unfortunately, drug makers have responded by building lucrative business models that empower them to achieve a gross profit margin of more than 80% – compared to an average gross profit margin of 16% for the rest of the pharmaceutical industry."

AHIP provides these takeaways from their report:

  - From 1998 to 2017, the average per-patient annual cost for orphan drugs increased 26-fold, while the cost for specialty and traditional drugs merely doubled
  - The average annual orphan drug cost rose from $7,136 in 1997 to $186,758 in 2017
  - Orphan drugs are 25x more expensive than non-orphan drugs
  - Today, 88% of orphan drugs cost more than $10,000 per year per patient
  - In 2017, 7 out of 10 best-selling drugs had orphan indications
  - Among newly launched drugs, the share of orphan drugs increased more than 4-fold, from 10% to 44%, over a 20-year period

While Orphan Drugs have an average annual drug cost of $123,543, Specialty Drugs average $38,309 and traditional drugs $4,961. For the past decade, Orphan Drugs averaged an annual drug cost of $138,919 and represented 42% if new drug approvals, compared to an average drug cost of $77,828 representing 23% of drug approvals in the decade before that.

AHIP concludes "The pharmaceutical industry points to small patient populations in order to justify exceptionally high prices on orphan drugs. Yet, the argument fails to explain the extraordinary year-over-year launch price increases for orphan drugs. Further, since orphan drugs throughout the study period address many of the same diseases, small target population cannot explain the continuous increases in orphan drug launch prices."
 
For More Information:

The Rise of Orphan Drugs
AHIP Issue Brief, September 10, 2019
 
MCOLBlog
Costs & Transparency Number One for 2020 on HCEG’s Top 10 List
By Clive Riddle, September 12, 2019

Once September is upon us and Pumpkin Spice lattes invade your nearest Starbucks, Christmas decorations should be arriving any day at your nearest Costco, and its not too early to think about what are the top issues we will be facing in the business of healthcare in new year ahead.... Click to continue

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Weekly News
Colorado union votes to strike at Kaiser, bringing 'yes' votes nationwide to 42K
The union representing Kaiser Permanente employees in Colorado voted overwhelmingly to support an strike in October over the not-for-profit integrated health system's labor practices and soaring profits, days before a scheduled sit down between the two groups.
Healthcare Dive
Friday, September 13, 2019

Thousands of Poor Patients Face Lawsuits From Nonprofit Hospitals That Trap Them in Debt
Over the past few months, several hospitals have announced major changes to their financial assistance policies, including curtailing the number of lawsuits they file against low-income patients unable to pay their medical bills.
ProPublica
Friday, September 13, 2019

Employer-based health insurance costs will grow 6.5% in 2020
High-cost specialty drugs, increases in care costs and declining care utilization will spark a 6.5% hike in employer-sponsored health benefits costs in 2020, according to a new report Thursday.
Modern Healthcare
Thursday, September 12, 2019

UVA Suspends Medical Lawsuits In Wake Of KHN Investigation
Under pressure after Kaiser Health News reported Monday that it sues thousands of patients a year and sends many into bankruptcy, University of Virginia Health System suspended about a dozen patient lawsuits Thursday and said it will announce changes to its billing and collections policy Friday.
Kaiser Health News
Thursday, September 12, 2019

Trump Administration Plans to Ban Flavored E-Cigarettes
As vaping-related illnesses spread, President Trump and top health officials met at the White House to discuss ways to keep the products away from teenagers.
The New York Times
Thursday, September 12, 2019

Insurers to deliver whopping $1.3B in ACA consumer rebates
Health insurers are expected to issue at least $1.3 billion worth of rebates to customers in the coming weeks, hitting a new record, according to an analysis from the Kaiser Family Foundation.
Healthcare Dive
Wednesday, September 11, 2019

Purdue Pharma reaches tentative deal in federal, state opioid lawsuits
Purdue Pharma, manufacturer of the blockbuster painkiller OxyContin, reached a tentative settlement Wednesday with 23 states and more than 2,000 cities and counties that sued the company over its role in the opioid crisis, according to attorneys involved in the deal.
The Washington Post
Wednesday, September 11, 2019

'Siri, how's the research going?' Apple launches new app to study health
As the latest Apple Watch updates were unveiled this week, the tech giant also announced three medical studies aimed at evaluating the capabilities of the watch to monitor hearing, women's health and heart rate and mobility.
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Wednesday, September 11, 2019

Number of uninsured jumps for first time since 2009
The number of people in the U.S. without health insurance jumped by 2 million from 2017 to a total of 27.5 million in 2018, according to census data release Tuesday.
The Hill
Tuesday, September 10, 2019

Hospital Giant Sutter Health Faces Legal Reckoning Over Medical Pricing
Economists and researchers long have blamed the high cost of health care in Northern California on the giant medical systems that have gobbled up hospitals and physician practices — most notably Sutter Health, a nonprofit chain with 24 hospitals, 34 surgery centers and 5,000 physicians across the region.
Kaiser Health News
Tuesday, September 10, 2019

Telemedicine CEO pleads guilty in $424M Medicare kickback scheme
The owner and CEO of a telemedicine company pleaded guilty Friday to taking part in one of the largest schemes to defraud Medicare ever investigated by the FBI and the HHS Office of the Inspector General and prosecuted by the Department of Justice.
Healthcare Dive
Monday, September 9, 2019

White House weighs controversial plan on mental illness and mass shootings
The White House is considering a controversial proposal to study whether mass shootings could be prevented by monitoring mentally ill people for small changes that might foretell violence.
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Monday, September 9, 2019
 
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