“It’s always worse than you think … even if what you were thinking is pretty bad”

On the heels of the Epi-Pen® scandal (well, at least I think it is scandalous, Epi-Pen® and Predatory Pricing: You thought our health system was designed for people’s health?, September 3, 2016) in which Mylan Pharmaceuticals and its CEO Heather Bresch raised the price of this life-saving medication 500% (and her salary by about the same degree), that itself followed last year’s Daraprim® scandal where Turing Pharmaceuticals and its CEO Martin Shkreli raised the price of this anti-parasitic drug over 5000% (Drug prices and corporate greed: there may be limits to our gullibility, September 27, 2015), we have some good news. Sort of. Brent Saunders, CEO of Valeant Pharmaceuticals, also identified last year for hefty price increases in two life-saving heart drugs,has now announced it will keep its price increases under 10%. Of course, it will raise the price 9.9%, which is certainly less than 10%, and even less than 9.99%, which they could have done and still been below 10%. There is speculation that this may have been in response to proposed federal legislation that would have increased the scrutiny on drug price increases of 10% or more, but of course we cannot know for sure.

The predatory greed of drug companies is becoming legendary, threatening to eclipse that of insurance companies as the leading bad guys in keeping Americans from being able to afford the medical care that they need. After all, insurance companies have increased every form of payment (premiums, co-insurance, co-payments and deductibles) that people, the insured, need to pay out of their own pockets in an effort to decrease the probability that they will be bankrupted when they need medical care. This is sometimes justified by the risks that they take; particularly by the “adverse selection” that occurs because it is the sick, rather than healthy, people who were most likely to sign up for insurance under the ACA’s insurance exchanges. The “individual mandate” of ACA was supposed to prevent this, but the penalties people have to pay are far less than the cost of buying insurance for many (if they are unsubsidized), and maybe they won’t even be caught. Or get sick.

Of course, the degree to which insurance companies are actually losing money rather than simply making less profit than they would like is uncertain, but it is clear that, at least in some markets, it is close. The transfer of many patient-borne costs from premiums to co-insurance, co-payments, and deductibles is designed to keep premiums from going even higher, but of course impacts the sick more. In (at least slight) contrast, the price increases of pharmaceuticals can only be justified by an ethos of “charge what the market will bear”, and make as much as possible before regulators come down on them. In a really ‘cool’ effort reported by the New York Times on September 16, 2016, Mylan is trying to get the federal government to add Epi-Pen to its list of life-saving preventive medications. This would mean direct users would not have to pay so much, but Mylan would continue receive its outrageous price – supported by all of us, as federal taxpayers. Now, there’s a really terrible solution! (Good solution: lower the price. A lot.)

And they have been doing it for a long time. Pharmaceutical companies bought dinners, bought presents, and bought trips for doctors who prescribed their drugs. There has been some clamping down on the most egregious excesses in recent years, but they have not been eliminated. Especially concerning are the revelations (no news to physicians) of the aggressive promotion of opiod pain relievers to doctors, and their contribution to the incredible epidemic of prescription opioid addiction in the US today (48,000 women died of prescription drug overdose between 1999 and 2010, a period during which prescription drug addiction increased over 400% among women and 237% among men, according to the American Society for Addiction Medicine. The Centers for Disease Control and Prevention (CDC) reported:

We now know that overdoses from prescription opioid pain relievers are a driving factor in the 15-year increase in opioid overdose deaths. Since 1999, the amount of prescription opioids sold in the U.S. nearly quadrupled, yet there has not been an overall change in the amount of pain that Americans report. Deaths from prescription opioids—drugs like oxycodone, hydrocodone, and methadone—have also quadrupled since 1999.

The entire campaign to “eliminate pain” was largely supported by opioid manufacturers, such as Purdue and Abbott through their creative marketing to physicians. The most “funny”, reported by STAT, was the use by a drug rep of creatively-arranged donuts to catch the attention of an orthopedist who would not otherwise meet with him, by appealing to his sweet tooth. It is not, of course, really funny, and it is almost worse that physicians could (and maybe still can) be bought not by trips to the Bahamas but by a box of donuts!

Speaking of donuts, we have the even more incredible exposé in the Times that for decades, beginning in the 1950s, the sugar industry worked assiduously to fund and support researchers whose work blamed dietary fat, rather than refined carbohydrates (sugar) for the prevalence of heart disease, (“How the sugar industry shifted blame to fat”, September 12, 2016). This was not a one or two time payoff to a couple of researchers, but a continued campaign over more than a generation to have the scientific community, and thus the rest of us, minimize the impact of sugar on heart disease. This work forestalled the more recent campaigns to limit sugar-containing foods, especially soft drinks, and was a major contributor to an epidemic even greater than opioid addiction, obesity and its related health effects. Sugar is not a prescription drug, but it probably has had more negative health consequences than all prescription drugs together.

So who can we trust? I have often argued for the scientific community, but such reports of corruption of scientific research are sobering; at least, we can say that today there are increased safeguards in place. Clearly we cannot trust politicians; while they will respond to the crises in the news (like drug price increases and such) they are dependent on contributions from large corporations, and those large corporations are pursuing their financial interests. Whether directly involved in our medical care, like insurance companies and drug companies and hospital chains, or dramatically affecting our health like the high-calories food industry (including sugar), or polluting and destroying our environment like many energy companies, our interests (at least as far as our health is concerned) are not their interests, and there is often (or usually) little overlap between the two. As a physician colleague put it, “It’s always worse than you think … even if what you were thinking is pretty bad.”

Pursuit of financial gain by such companies is not in the interest of our public, or private individual, health. The most vulnerable of us – the poorest, sickest, youngest and oldest and least empowered – suffer first and most, but all of us suffer. Drug prices should be regulated tightly, and competition (including pricing as in other countries or import of drugs) should be encouraged; insurance should be single-payer, and the impact on the public’s health the main criterion in deciding on environmental pollution.

Profit should have no place in determining our health or health care.

Epi-Pen® and Predatory Pricing: You thought our health system was designed for people’s health?

Martin Shkreli, the former CEO of the drug company Turing, achieved his 15 minutes of fame (or infamy) last year through predatory pricing, raising the price of pyrimethamine, an old drug used to treat a parasitic infection in the brains of immune-compromised (usually HIV-infected) people from $13.50 to $750 a pill (Drug prices and corporate greed: there may be limits to our gullibility, September 27, 2015). Shkreli manage to further alienate people by his testimony before Congress, widely described using adjectives such as “smug” and “condescending”.  The most recent Pharma CEO to hit the news for price gouging, Heather Bresch of Mylan, seems to be trying to avoid Shkreli’s “doubling down” by making an apology, of sorts.

Bresch’s company, unquestionably with her active involvement, raised the price of Epi-Pen®, a self-injectable form of epinephrine that is sold to prevent people from dying from severe allergic (anaphylactic) reactions to a variety of substance, from peanuts to bee stings, from about $100 to $600 for a 2-pack. Two things: first, such pens are lifesavers. As a physician, when I tried to figure out what I needed to pack in an emergency first-aid kit for camping, it was #1. It was the only thing I could think of that actually could keep someone from dying in the woods. Second, epinephrine is an old, cheap drug. As ABC news reported, a doctor in Canada showed how a physician can prescribe a whole vial, plus small syringe and needle, for under $10, and a person can easily inject themselves, just under the skin. The “value” of the Epi-Pen is that it is self-injecting, but hard to even justify the $100. Or the somewhat higher cost of a generic (Mylan, indeed is a generic company.) Bresch, the daughter of a US Senator, was awarded an MBA by West Virginia University despite not finishing the coursework (which led to the resignation of the president). She protested that she wasn’t being predatory like Shkreli, and offered to sell the drug at a 50% discount, only $300! That is still a lot. I have a friend whose daughter is allergic to peanuts; both her day care centers require her to have a 2-pack of Epi-Pen®, with prescription (thus can’t do the epinephrine bottle) – this could cut her outlay from $1200 to $600. Of course, she will spend it to potentially save her daughter’s life, the key point that Mylan and Ms. Bresch understood when they raised the price. At more or less the same time, Ms. Bresch raised her own salary from a paltry less-than-$2 million a year to $18 million. I guess the rise in the price of Epi-Pen® funded that. MAD Magazine® used to do satire but its recent coverage of Epi-Pen® is almost investigative reporting (see picture).

Could it get worse? Sure, why not? Bresch’s father, Senator (and former Governor) Joe Manchin of West Virginia may or may not have been helpful to Mylan (it is, after all, a West Virginia company), but many politicians have been tied to helping drug companies make lots of money. Bill Moyers covers the role of Billy Tauzin, a former Congressman from Louisiana who chaired the House Energy and Commerce Committee when Congress passed the Medicare drug plan (Medicare Part D) under President G. W. Bush. That legislation prohibited Medicare from using its clout to negotiate lower drug prices. Tauzin left Congress in 2005 and became chief lobbyist for the Pharmaceutical Research and Manufacturers of America (PhRMA), converting his well-paid (by campaign donations) service while in Congress to a MUCH better-paid job lobbying his former colleagues. He is credited with having a major impact on the ACA, passed in 2010, ensuring its Pharma-friendly characteristics. And, to be sure, Tauzin, who left PhRMA after 5 years, was scarcely alone in pushing pharmaceutical industry interests in Congress, or in receiving big donations, as the Moyers piece documents. Congress appears to buy the idea that Pharma needs high prices for doing research and development (despite the fact that they spend many times their R&D budgets on marketing, and much of the basic research is done with government funding at universities) and that other countries’ restrictions on the prices of their drugs require them to charge Americans more. Of course, the real reason that pharmaceutical companies charge so much in the US is that they can get it. Whose interests is Congress working in when it does this? Not the American peoples’…

I recently discussed the fact that some large insurers (Aetna, United, Humana)  are leaving the health insurance exchange marketplace in some parts of the country because they are losing money (or, perhaps, just not making enough) because too many sick people and not enough healthy people are signing up, turning the insurance model on its head.  Although the ACA contains an individual mandate, lots of people with less money and/or fewer health needs are not signing up and paying the penalties, which are much less costly (if they are even “caught”). Of course, the ACA did not include a “public option”, which would have been much less costly, specifically to offer these insurers a competition-free field. This is discussed in detail by Princeton health economist Uwe Reinhardt in a JAMA Forum on August 25, 2016 “Why Are Private Health Insurers Losing Money on Obamacare?”. The reason comes down to the same one that has always been true, and that I discussed a number of years ago (October 20, 2009, Red, Blue, and Purple: The Math of Health Care Spending) – a small minority of people account for most health care costs. I have attached a graph from Reinhardt’s piece that makes the same point. And, although he explains the reason insurers lose money, Reinhardt does not excuse it. "If health care costs in the United States were lower, most people would probably agree that ill, low-income citizens should receive the needed health care that is available to better-off individuals. The problem is that our health system is in danger of pricing kindness out of our souls."

So we have both the greed of pharmaceutical companies and the greed of insurers. As discussed in many recent articles in the popular press, the bottom line is that the health benefit to Americans is at best a side effect of complex plans engineered to make profit. This perverted approach, almost unique to the US, has marginalized, bankrupted, and caused illness and death in many. This system doesn’t work for people. A fairly well-off couple caught in the bind of insurance costs is profiled by AP in its “The Big Story: “Without a subsidy, couple faces higher insurance premiums”. The husband notes the failure of our system to ensure that people’s health is a greater priority than corporate profit:  "Ultimately, it's clear that health care is not something that can be efficiently provided by the private sector. The rest of the Western world has figured out that health care is a right and is intrinsically a government, public-sector activity.”

Don McCanne, in his Quote of the Day,  provided that link on August 22. And then, on August 23, a profound and direct commentary from the editors of the Des Moines Register, “Editorial: Government should not rely on private insurers”:

“Americans’ access to health insurance should not depend on the profit margins, business dealings, or mergers of for-profit companies. Not in Medicare. Not in Medicaid. And not in exchanges created by health reform law. Instead of funneling tax dollars to private companies, government is better equipped to administer insurance. It is not beholden to stockholders. It does not seek to turn a profit. And it will not abandon the responsibility of providing health coverage to Americans.”

Professor Reinhardt and those editors are right. Our souls are certainly in jeopardy. And so are our pocketbooks. And so is our health.