Good morning. I’m Elisabeth Rosenthal, senior contributing editor at KFF Health News and author of the book “An American Sickness: How Healthcare Became Big Business and How You Can Take It Back.” I’ve been watching prescription drug prices rise for years, so it’s fascinating now to see both state and federal governments trying to rein them in. Have a tip? Email me at erosenthal@kff.org. Not a subscriber? Sign up here.
Today’s edition: President Biden and Vice President Harris are traveling to North Carolina to tout their work on health care. Everything you need to know about the charity care provided out by the nation’s nonprofit hospitals in 2021. But first …
Colorado is pushing to cap drug prices. It’s likely to be in for a fight.
As the federal government negotiates with drugmakers to lower the price of 10 expensive drugs for Medicare patients, impatient legislators in some states are trying to go even further. Leading the pack is Colorado, where a new Prescription Drug Affordability Review Board is set to recommend an “upper payment limit” for drugs it deems unaffordable.
In late February the board selected Enbrel, Amgen’s blockbuster drug for autoimmune conditions (list price $1,850 per week), as the first medication that would go through its process. Novartis’s Cosentyx and Johnson & Johnson’s Stelara (both treat autoimmune conditions) will undergo affordability reviews later this year.
Enbrel and Stelara are also on the list of drugs whose prices the federal government is negotiating — but only for Medicare patients. Prices may be published Sept. 1 — in time for President Biden to cheer the results in his reelection campaign. But they won’t take effect until 2026, while the drug industry pursues a raft of lawsuits to stop the initiative.
Colorado’s plan is, in many ways, both broader and more prescriptive than the feds’, covering all patients and potentially fixing an upper price limit rather than squabbling with the industry over an acceptable figure.
Colorado’s government said it anticipates similar litigation. A spokesperson for the state’s Division of Insurance, which oversees the program, declined to make anyone available for an interview.
The Pharmaceutical Research and Manufacturers of America, the industry’s main trade group, said in a blog post: “Policymakers in Colorado have created a system in which patients may face significant barriers to lifesaving medicines because of government price setting.”
The state has already said 604 drugs met the first criteria to undergo an affordability review. The full list of drugs is linked from the board’s webpage, along with a list — in order — of those it has slated for priority review.
The Colorado board will spend the summer setting upper payment levels for drugs selected for price reviews. Drugmakers can then appeal.
The board plans to examine how manufacturers price — and raise prices — for drugs. For generics, the board’s director, Lila Cummings, said at a Feb. 23 meeting, the criteria could include whether the price paid by wholesalers before discounts has increased at least 200 percent in the past year and whether a 30-day supply costs more than $100. Branded drugs that cost more than $30,000 a year or whose wholesale price has increased at least 10 percent in the past year could land in the board’s sights, as could biosimilars that aren’t at least 15 percent cheaper than the brand-name biologics they’re intended to replace, Cummings said.
The five-member board, appointed by Gov. Jared Polis (D), includes two medical doctors, two pharmacists and a hospital executive. A 15-member advisory council includes patient advocates, insurers, pharmacists and representatives of drug manufacturers.
The Colorado law creating the board set out a lengthy process for any drugmaker that decides to withdraw its product from the state over the price caps. (Note that the state is also exploring importing cheaper drugs from Canada, without much success so far.)
More than a dozen states are attempting to rein in drug prices through a variety of tactics. It’s early in U.S. regulators’ work to control drug prices, and it’s unclear whether the federal or state efforts will prevail.
What is clear is that patients need some relief: Over 30 percent of adults report not taking medications as prescribed because of costs, and 1 in 5 didn’t fill a prescription, according to KFF survey results published in August.
KFF Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF — an independent source of health policy research, polling and journalism.
Daybook
Biden, Harris seek to sharpen health-care contrast with GOP in N.C.
On tap today: President Biden and Vice President Harris are slated to appear at a campaign event in Raleigh, N.C., where they are expected to sound the alarm on the GOP’s health policy vision.
During the event, the duo will highlight a recent budget proposal from a large group of House Republicans, aiming to sell voters on their first-term health-care achievements while positioning themselves as a bulwark against the conservative wish list, according to a senior administration official.
Key context: The Republican Study Committee’s fiscal 2025 budget proposal endorses measures to repeal Medicare drug price negotiations, eliminate beefed-up tax credits for Affordable Care Act health plans and codify that life begins at conception, among other things.
- In contrast, Biden’s budget includes provisions that would expand Medicare’s authority to negotiate drug prices, make enhanced ACA subsidies permanent and protect reproductive health care.
From our reporters' notebooks
Hospitals hit for insufficient charity care in new report
For decades, nonprofit hospitals have been accused of failing to give away enough money in charity care and other community assistance to make up for their huge tax breaks.
A report released this morning estimates the annual discrepancy at $25.7 billion in 2021, KFF Health News’ Phil Galewitz writes.
About 80 percent of more than 2,400 nonprofit hospitals surveyed give back less to their communities than they receive in tax breaks, according to the Massachusetts-based Lown Institute, an independent think tank, which has issued similar reports in recent years.
For some hospitals, the shortfall was hundreds of millions of dollars a year, even while they made hundreds of millions in net income, the study found.
But the hospital industry argues Lown’s accounting is suspect because its definition of charity care and community benefit doesn’t account for the losses hospitals say they often take on Medicaid and Medicare patients, or money they spend on medical research.
Providence, a Catholic hospital system based in Washington state, recorded a $1 billion “fair share deficit” in 2021, Lown said — one of the largest in the nation. Providence called the report an “incomplete evaluation” and said it provided $1.9 billion in “community benefit investments” in 2021, a $366 million increase from 2019.
“While facing the challenges of the pandemic, rising health care costs and a national shortage of health care personnel, Providence remained steadfast in our Mission to respond to the unmet and diverse needs of the communities our ministries and affiliates serve,” said the statement, sent by Providence spokesperson Michael Connors.
Vikas Saini, president of the Lown Institute, said shortfalls in government reimbursement aren’t the same as direct “community benefit” and hospitals receive private or public funds for research.
Lown calculates community benefit as financial assistance to patients, community health improvement services, cash and in-kind contributions, community-building activities and subsidized health services.
Data point
Abortions outside medical system increased sharply after Roe fell, study finds
The number of patients using abortion pills to terminate their pregnancies without the direct involvement of a U.S.-based medical provider more than quadrupled in the months after the Supreme Court eliminated the constitutional right to abortion, The Post’s Caroline Kitchener and N. Kirkpatrick report.
By the numbers: Nearly 28,000 additional doses of pills intended for “self-managed” abortions were provided in the six months after the fall of Roe v. Wade, according to research published in JAMA yesterday.
- Another recent report found the number of abortions performed within the formal health-care system also increased last year despite state restrictions.
Taken together, the flurry of new data points to a perhaps surprising result of the fall of Roe: While the ruling has made abortion more difficult to access for people in restricted states, a large portion of those patients have been able to navigate around the laws and end their pregnancies.
Yes, but: The outcome of a case at the Supreme Court today challenging a key abortion drug could make it harder to access medication to terminate a pregnancy — even in states where abortion is legal. You can read more about what is at stake here.
In other health news
- A new report by the Government Accountability Office found the Food and Drug Administration has struggled with recruiting and retaining investigators, leading to fewer clinical research inspections and a less experienced workforce.
- The FDA has proposed banning the use of devices that administer electric shocks to reduce or halt self-injurious or aggressive behavior for the second time, saying the products pose an unreasonable risk of illness or injury.
- Sen. Bill Cassidy (La.), the top Republican on the Senate health committee, is pressing the federal health department for information about a cyberattack earlier this year that reportedly resulted in the theft of $7.5 million in grant funding.
Health reads
Sugar rush
It’s Misinformation Monday.
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Let’s talk about birth control: pic.twitter.com/GJ6FqDZDYx
