Top Stories in Business & Health for May 8, 2017
Harvard Pilgrim signs outcomes-based refund contract with Amgen for Repatha
Amgen and Harvard Pilgrim executed a “first-of-its-kind” contract under which the health plan can receive a full rebate for the cost of Repatha (evolocumab) if an eligible patient experiences a myocardial infarction or stroke while on the drug—essentially a money-back guarantee. Repatha, a PCSK9 inhibitor, is indicated as an adjunct to diet and optimal statin therapy in certain adults who require additional lowering of LDL cholesterol. It has a list price of $14,000 per year. The agreement builds on a pay-for-performance contract Harvard Pilgrim and Amgen signed in 2015 for Repatha, and follows the release of clinical study data earlier this year showing that Repatha reduced the risk of myocardial infarction by 27 percent and stroke by 21 percent over a period of two years.
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Hackensack Meridian, JFK Health sign merger agreement
JFK Health and Hackensack Meridian Health, both based in Edison, N.J., announced Tuesday that they have entered into a definitive agreement to merge. If the deal is completed, the resulting combined health system will have 15 hospitals and academic medical centers throughout New Jersey, as well as a network of physician practices, ambulatory surgery centers, home care, long-term care and assisted living facilities, outpatient centers and other facilities. It will also employ more than 33,000 team members and have more than 7,000 physicians on staff. The transaction is subject to regulatory approval. Financial terms were not disclosed.
U.S. prescription drug spending reached $323 billion in 2016, growth rate slowed
Drug spending in the U.S. grew 4.8 percent last year, reaching $323 billion, according to a new report by the QuintilesIMS Institute. That compares with a growth rate of 8.9 percent in 2015 and approximately 10 percent in 2014. Those figures are net of estimated manufacturer rebates, discounts and other price concessions; spending at the invoice level rose 5.8 percent in 2016, reaching $450 billion. The report also revealed that average out-of-pocket costs continued to decrease last year. In 2016 the average was $8.47, compared with $9.66 in 2013. Nearly 30 percent of prescriptions were dispensed at no out-of-pocket cost in 2016, an increase of 1.5 percent from the year before that was attributed to greater use of “zero cost” generics. The outlook is for net total prescription drug spending to increase an average of 2-5 percent through 2021, reflecting “moderating” price increases for branded products, greater market competition and lower spending on brands due to patent expiries.
Anthem takes its case to the Supreme Court
Anthem has decided to take its mission to merge with Cigna to the Supreme Court. The 2-1 split decision by a federal appeals court last week gave Anthem grounds to take the case to the higher court. The appellate court upheld an earlier district court ruling stating that the merger would restrict competition, leading to higher premiums and poorer care. Meanwhile, a hearing will be held in a separate battle between the two insurers today in a Delaware court. Cigna is suing to terminate the attempted merger and collect a $1.85 billion breakup fee, along with $18 billion in damages. Anthem asked for and was granted an injunction to prevent Cigna from walking away from the deal, and then filed a countersuit alleging that Cigna sabotaged the merger.
House passes legislation to repeal, replace ACA
On Thursday, House members passed an amended bill to dismantle substantial parts of the Affordable Care Act (ACA) by a 217-213 vote. Twenty Republicans voted against the bill, along with all Democrats. The amended American Health Care Act would eliminate the individual mandate, make deep cuts to federal support for Medicaid and offer age-based tax credits in place of federal subsidies for policies bought on the ACA marketplace exchanges. It would also give states leeway to roll back required coverage for certain essential health services, such as maternity care, and allow states to seek waivers that would permit insurers to charge higher premiums for individuals with pre-existing conditions. Moreover, the bill would repeal ACA taxes imposed on high-income individuals, insurers and drug companies, allow insurers to charge substantially higher premiums for older individuals as compared with younger people, and defund Planned Parenthood for a year. The legislation now faces an uphill battle in the Senate, where it is expected to undergo a significant overhaul.
Access to care similar for Medicaid coverage, private insurance, survey indicates
Medicaid coverage provides access to health care that is as good as access with private insurance, a Commonwealth Fund survey demonstrates. The 2016 survey, conducted using a random sample of 6,005 adults, compared the experiences of people who were covered all year by private employer-sponsored or individual insurance, covered all year by Medicaid or uninsured for at least part of the year. Statistically, Medicaid beneficiaries were as likely as people with private insurance to report having a regular source of care (91 percent vs. 93 percent, respectively), and they rated the quality of their care as highly as did those with private insurance. Specifically, 57 percent of Medicaid patients and 52 percent of private insurance patients rated their care as “very good” or “excellent.” With the exception of cholesterol checks, which were higher among privately insured patients, there were no significant differences between patients with Medicaid coverage and those with private insurance with regard to rates of preventive care.