Negotiating with Big Pharma Over Drug Prices for Medicare

You really can't blame Big Pharma for hating the new federal law that authorizes the Medicare program (for the first time in its 59-year existence) to stop buying drugs for the manufacturer's price but instead to negotiate for a reasonable price (the way the VA, state Medicaid agencies, the Defense Department, and most other countries do).

Medicare has been a predictably incredible cash cow for Big Pharma for generations, and that way of doing business is on its way out. 

The Medicare Drug Price Negotiation Program was authorized by Subtitle B (Prescription Drug Pricing Reform) of the bipartisan Inflation Reduction Act (once you're at the IRA, just do a search for "drug price"). As the Centers for Medicare & Medicaid Services (CMS) eases into this new role, it identified 10 drugs that cost the program the most (a function of price x frequency of Rx). 

Big Pharma's government-relations/lobby folks have all sorts of arguments against the program. Some question whether the government will save as much money as it predicts will be the case. Time will tell.

But one argument is more philosophical: This level of government intervention is inconsistent with the traditional "free market" system that has served patients so darned well.

There's an article in the April 25 issue of the New England Journal that refutes Big Pharma's assertion. The article is "The Myth of the Free Market for Pharmaceuticals" by Rena M. Conti, Ph.D., Richard G. Frank, Ph.D., and David M. Cutler, Ph.D. There's a "public link" that's available behind a "Share" button on the NEJM webpage. I don't know if it works for nonsubscribers, but here it is: https://www-nejm-org.foyer.swmed.edu/doi/pdf/10.1056/NEJMp2313400.

The article makes the point that the market for pharmaceutical products is not and never has been a "free market," at least not in the classic economic sense. The characteristics of a free market, the authors argue, are:

1. consumers are assumed to be fully informed, 
2. it is assumed that they choose products on the basis of their discernable benefits and costs, 
3. sellers can freely enter markets and make products similar or identical to others, and 
4. prices, set by firms seeking to maximize profits, are competitive with those of other sellers and unmodified by government intervention.

The authors conclude that "[t]he U.S. pharmaceutical market strays from all these features." The point is a basic one, and you don't need a Ph.D. to figure this out. The government issues patents that grant monopoly status to drugs, entry into the market with competing drugs depends upon FDA approval, consumers are woefully uninformed about benefits and costs (or highly dependent upon information provided by parties with very strong economic interests), and most purchasers are shielded from paying the true cost of drugs by third-party payers (insurers who may pick up 80% or more of the price).

Perhaps the more salient point to be made is that Big Pharma knows its business even better than I do, and its "free market" argument is not even intended to be technically correct. It's political speech, like the AMA's old argument against Medicare ("it's communistic" or "it's socialized medicine"). Not true, but it rings bells and sets off alarms. 

That said, "free market" is a technical phrase, and it deserves to be dispatched by reference to its technical meaning. This week's NEJM article does just that. 

America's Best Poetry Critic Has Died

Despite this blog's self-description up at the top of this page, I don't recall ever posting anything here about poetry over the past 21 years.

Until today.

And I'm not posting about poetry -- at least not only about poetry -- but also about poetry criticism -- and not about the work of all poetry critics, but about one in particular.

Professor Helen Vendler
(April 30, 1933 - April 23, 2024)

You could say that as a one-time, part-time poetry columnist for the Dallas Morning News from 1998-2003, I was once in the same line of work as Helen Vendler. That's about as accurate and helpful as saying a cockroach and a lion are the same because they both have legs.

Helen Vendler was a much-honored Harvard Professor of English and American Literature and Language. Her awards were many and her books even more so. I never read a Vendler piece without feeling glad that  I had. According to Wikipedia, "In 2006, The New York Times called Vendler 'the leading poetry critic in America,'" and even her critics would have been hard-pressed to disagree. She was a traditionalist, which made her controversial in some circles, and that probably appealed to my own taste in poetry. 

The death notices and appreciations are starting to pile up, though I fear most of these links are behind a firewall. Even better, check out a book by Vendler and dip in. It will be a great trip.

• The New York Times, Helen Vendler: An Appreciation (She devoted her life to showing us how and why.) Apr. 25.
• Washington Post, Helen Vendler, poetry critic both revered and feared, dies at 90 (Helen Vendler, a literary scholar and reviewer of poetry who was revered and feared in equal measures, whose scalpel-sharp critiques could...) Apr. 25.
• The Boston Globe, Helen Vendler, a towering presence in poetry criticism, has died (Struggling as a single mother in 1967 to raise a son on scant funds while teaching 10 college courses a year, Helen Vendler realized that...) Apr. 24.
• The New York Times, Helen Vendler, 'Colossus' of Poetry Criticism, Dies at 90 (Helen Vendler, one of the leading poetry critics in the United States, with a reputation-making power that derived from her fine-grained,...) Apr. 24.

Noncompete Clauses and the FTC's Ban

After 15 months of reviewing over 26,000 public comments on its proposed rule, the Federal Trade Commission voted 3-2 yesterday to adopt a final rule banning most noncompete agreements, including those involving health-care professionals and employees, effective 120 days after publication of the rule in the Federal Register. A 2-1/2-page fact sheet provides a helpful overview of the 570-page final rule. The majority claimed that "noncompetes are an unfair method of competition and therefore violate Section 5 of the Federal Trade Commission Act ('FTC Act')."

Highlights of the rule (from the fact sheet):

• The rule states that noncompetes are an unfair method of competition. As a result, the rule prohibits employers from entering into new noncompetes with workers, as of the effective date. 
• The rule prohibits employers from enforcing noncompetes with workers other than senior executives as of the effective date. 
• Less than 1% of workers are estimated to be senior executives under the final rule. 
• Specifically, the final rule defines the term “senior executive” as workers earning more than $151,164 who are in a “policy-making position.” 
• The rule requires employers to notify workers whose noncompetes are no longer enforceable that their noncompetes are no longer in effect and will not be enforced. The FTC provides model language that employers can use to notify employees. 
• The rule includes an exception that allows noncompetes between the seller and buyer of a business. 
• The final rule differs from the proposed rule in several respects. For example: 
• The rule does not ban existing noncompetes with senior executives. 
• The rule simplifies the notice and compliance requirements for employers. 
• The rule expands the sale of business exception.

Of particular interest to hospitals, Becker's Hospital Review (4/24/2024) observes:

• Though the FTC recognized that it does not have jurisdiction over nonprofit entities, it reserved the right to evaluate an entity's nonprofit status, which would include a significant portion of the 6,120 hospitals in the U.S. 
  
  
• Specifically, the agency said that "some portion of the 58% of hospitals that claim tax-exempt status as nonprofits and the 19% of hospitals that are identified as state or local government hospitals in the data cited by [American Hospital Association] likely fall under the commission's jurisdiction and the final rule's purview."

The American Hospital Association continued its rejection of the rule:

• The final rule would have significant implications for the healthcare industry and has been described by Federation of American Hospitals President and CEO Chip Kahn as a "double whammy" against hospitals. 
  
  
• "The ban makes it more difficult to recruit and retain caregivers to care for patients, while at the same time creating an anticompetitive, unlevel playing field between taxpaying and tax-exempt hospitals — a result the FTC rule precisely intended to prevent," Mr. Kahn said in a statement shared with Becker's. "In a time of constant healthcare workforce shortages, the FTC's vote today threatens access to high-quality care for millions of patients."

The AHA position seemingly concedes the point that noncompetes tend to lock employees into the current job, and once the constraint of a noncompete is removed, it will be just that much more difficult to retain workers in a job market that is already producing shortages at many hospitals.

The U.S. Chamber Commerce has already stated its intention to challenge the rule in the courts:

“The Federal Trade Commission’s decision to ban employer noncompete agreements across the economy is not only unlawful but also a blatant power grab that will undermine American businesses’ ability to remain competitive.  

“Since its inception over 100 years ago, the FTC has never been granted the constitutional and statutory authority to write its own competition rules. Noncompete agreements are either upheld or dismissed under well-established state laws governing their use. Yet, today, three unelected commissioners have unilaterally decided they have the authority to declare what’s a legitimate business decision and what’s not by moving to ban noncompete agreements in all sectors of the economy. 

“This decision sets a dangerous precedent for government micromanagement of business and can harm employers, workers, and our economy. 

“The Chamber will sue the FTC to block this unnecessary and unlawful rule and put other agencies on notice that such overreach will not go unchecked.”

For the record, the FTC sees the situation differently:

Noncompetes restrict the freedom of American workers and suppress wages.

• Noncompetes restrict workers’ fundamental freedom to leave for a better job or to start their own business.
• In many cases, noncompetes are take-it-or-leave-it contracts that exploit workers’ lack of bargaining power and coerce workers into staying in jobs they would rather leave, or force workers to leave a profession or even relocate.
• By restricting workers from moving freely, noncompetes prevent workers from accepting higher-paying jobs.
• Noncompetes even reduce the wages of workers who aren’t subject to noncompetes. Noncompetes stifle new businesses and new ideas. 

Noncompetes restrict the freedom of American workers and suppress wages. 

• Noncompetes prevent workers from starting their own firms and block new businesses from hiring qualified workers. 
• Noncompetes restrict the flow of knowledge between firms, and studies have found that noncompetes reduce innovation. This affects not just workers but also consumers by depriving consumers of better products and lower prices that result from competition and innovation. 

Noncompetes are widespread throughout the U.S. economy. 

• Roughly one in five Americans, totaling nearly 30 million people, are subject to noncompetes. 
• The Commission received over 26,000 comments, with thousands of workers describing how noncompetes blocked them from taking a better job, negotiating better pay, or starting their own business. 
• The Commission also heard from entrepreneurs and small businesses who said noncompetes prevented them from starting new ventures or hiring knowledgeable workers to help grow their businesses. 
• Over 25,000 commenters supported a categorical ban on noncompetes. 

By banning noncompetes, the FTC estimates that: 

• New business formation will grow by 2.7%, creating over 8,500 new businesses each year. 
• American workers’ earnings will increase by $400-$488 billion over the next decade, with workers’ earnings rising an estimated $524 a year on average. 
• Health care costs will be reduced by $74-$194 billion over the next decade in reduced spending on physician services. 
• Innovation will increase, with an average estimated increase of 17,000-29,000 more patents each year over the next decade. 

The Many Stories of Palliative Care

One of the newest medical specialties around, palliative care may also be one of the least understood. It is not not synonymous with either end-of-life care or with hospice care, though it often plays an important role in each. It is also not only about pain control through medications alone. I think of it as a holistic approach to all dimensions of suffering -- pain control when and as needed, as well as psychosocial, emotional, and spiritual care. As this list suggests, good palliative care is a multi-disciplinary team approach to suffering. 

Herein the sermon endeth.

If your eyes started to glaze over while you read that first paragraph, you're likely to be in good company. Understanding what palliative care is about, what it can and cannot accomplish, like most things worth doing in life, is best understood through the stories of patients, various health care professionals, families, administrators, etc.

Fortunately there is a book that does just that, bringing to life the practice of palliative care and in doing so bringing us to a deeper understanding of what palliative care seeks to accomplish and how. I am thinking of The Pursuit of Life: The Promise and Challenges of Palliative Care, a collection of essays edited by my SMU colleague (in Perkins School of Theology) Jack Levison and my long-time collaborator and friend, Bob Fine. You can read about it on the BMJ Supportive and Palliative Care blog and if you are moved to do as I did, you can purchase a copy over at Amazon.

Spike in ER Refusals of Pregnancy-Related Emergency Care After Dobbs Decision

A story from the Associated Press (AP, 4/19/24) reports that "more than two dozen complaints about emergency pregnancy care were lodged in the months after the Dobbs decision was unveiled. It is not known how many complaints were filed last year as the [AP's FOIA] request only asked for 2022 complaints and the information is not publicly available otherwise."

Individual refusals are stunningly heartless:

One woman miscarried in the lobby restroom of a Texas emergency room as front desk staff refused to check her in. Another woman learned that her fetus had no heartbeat at a Florida hospital, the day after a security guard turned her away from the facility. And in North Carolina, a woman gave birth in a car after an emergency room couldn’t offer an ultrasound. The baby later died. . . .

Consider what happened to a woman who was nine months pregnant and having contractions when she arrived at the Falls Community Hospital in Marlin, Texas, in July 2022, a week after the Supreme Court’s ruling on abortion. The doctor on duty refused to see her.

“The physician came to the triage desk and told the patient that we did not have obstetric services or capabilities,” hospital staff told federal investigators during interviews, according to documents. “The nursing staff informed the physician that we could test her for the presence of amniotic fluid. However, the physician adamantly recommended the patient drive to a Waco hospital.”

Ethics. “It is shocking, it’s absolutely shocking,” said Amelia Huntsberger, an OB/GYN in Oregon. “It is appalling that someone would show up to an emergency room and not receive care -- this is inconceivable.” Why is this happening? 

Pregnant patients have “become radioactive to emergency departments” in states with extreme abortion restrictions, said Sara Rosenbaum, a George Washington University health law and policy professor.

“They are so scared of a pregnant patient, that the emergency medicine staff won’t even look. They just want these people gone,” Rosenbaum said. 

Law. Aren't the refusals of pregnancy-related emergency care illegal? Well, the federal Emergency Medical Treatment and Active Pregnancy Act requires Medicare-contracted hospitals to stabilize the emergency medical condition when a woman comes to the emergency department in labor. It's a Condition of Participation in the Medicare program. It shouldn't be complicated, but it is.

On Wednesday, April 24, the Supreme Court will hear oral arguments in the case of Moyle v. United States, No. 23-726, in which the issue is "[w]hether the Supreme Court should stay the order by the U.S. District Court for the District of Idaho enjoining the enforcement of Idaho’s Defense of Life Act, which prohibits abortions unless necessary to save the life of the mother, on the ground that the Emergency Medical Treatment and Labor Act preempts it." There are 45 amicus briefs in this case, an indication of the broad and strong interest in this case on both sides of the issue. (The district court's order in unpublished but can be found at pages 620-59 of Vol. 2 of the Joint Appendix filed in the Supreme Court matter.)

No, I am not "The Patient"

There's a good reflection piece posted (free) today on-line at JAMA: “The Patient” by Katie Thure. It starts:

Mrs T was a 58-year-old female admitted to the intensive care unit (ICU) for respiratory distress secondary to pneumonia. On her 10th day of hospitalization, she developed septic shock. Despite escalations in care, it became clear Mrs T would not survive. After a goals-of-care conversation with her husband, her 2 adult children, living outside of the state, were called to come to say their goodbyes. With both children at bedside, a woman wearing scrubs and a long white coat walked into the room and announced, “I’m Dr A, an ICU resident.” She explained the medical data and summarized to the family that “the patient has no chance of survival.” Although this statement was objectively correct, it failed to acknowledge that “the patient” was also a community advocate for equitable education, a wife of 40 years, a lover of mischief, and my mom. . . .

I was not surprised to hear about her poor prognosis. But I was surprised at Dr A’s choice to call my mom the patient. Is this how everyone is told their best friend was going to die? How could my mom be just the patient if her fingernails were still painted with Christmas trees and snowflakes?

There's more to savor and learn from this short essay. It's about the dehumanizing effect of the language of medical encounters. "Dr. Jones" becomes simply "the resident," and Dr. Smith is "the attending." "Mrs. Thure" is stripped of personhood and is "the patient." As the author writes: "When we choose not to use someone’s name, we are choosing to reduce them. We are indirectly saying, 'You are no more than the one-word descriptor I have given you.' The patient is not a human but just a pathology needing to be addressed." 

Ms. Thure (Class of 2024 in UCLA's medical school) doesn't oversimplify: 

Years later as a medical student, I was taught to think about patients both holistically and also to reduce them to a one-liner. There is clinical significance to having an accurate, concise depiction of a patient’s history and current medical needs. There is also equal clinical significance to remembering the person behind the one-liner.

What defines the distance between these two descriptions? Empathy. Or maybe simply circumstances:

Over the years, I have spent a fair amount of time trying to figure out how my mom became the patient. Maybe Dr A was at the end of a long and difficult shift, maybe that was not the first bad news she had delivered that evening, maybe she was never trained to be empathetic, maybe it is just the culture of medicine. Or maybe there was no reason at all.

Tomorrow is the last meeting of this semester's edition of "Law, Literature & Medicine." It's a seminar for 4th-year med students (UT-Southwestern) and 3rd-year law students (SMU/Dedman) that I have taught for decades, since 2017 with my valued friend and co-teacher, Dr. Reeni Abraham. I will propose that we email the class a PDF of Ms. Thure's essay and discuss whether it should be included in the first day's reading assignment when we offer the course again in 2025. The course is about the language we professionals use, identity (our patients' and clients' and our own), narratives, and empathy. And it's all here in this wonderful little essay.

Health Disparities: More Data from The Commonwealth Fund

Here is The Commonwealth Fund's introduction to the new report (released today):

Part of the Fund’s ongoing series examining state health system performance, Advancing Racial Equity in U.S. Health Care: The Commonwealth Fund 2024 State Health Disparities Report evaluates states on 25 measures of health care access, quality, service use, and health outcomes for Black, white, Hispanic, American Indian and Alaska Native (AIAN), and Asian American, Native Hawaiian, and Pacific Islander (AANHPI) populations. 

Among the key findings:

The health care divide is especially stark when it comes to premature deaths: American Indian and Black people die from preventable and treatable causes at substantially higher rates than other groups.

Disparities exist even in states that are otherwise considered high performing on health care.

Health care experiences for people of color vary widely across states. For example, health systems in South Dakota, North Dakota, and Alaska perform worst for American Indian people, while North Carolina’s health system performs best.

Find out where your state ranks, and how we can achieve more equitable health care systems in each state. 

Sen. Ron Wyden (D. Ore.) Is Right About Shameless State AGs (including Ken Paxton)

From the Texas Freedom Network's Quote of the Day:

“It’s shameful that law-enforcement officials are choosing to persecute teens trying to live their lives, just to score points with far-right activists. . . ."

Senate Finance Committee Chair Ron Wyden of Oregon said, referring to the fact that four attorneys general in conservative states — including Ken Paxton — have abused their authority to investigate transgender patients and their health care.

Wyden's comments were part of a series of public statements around the release of a staff report from the Senate Finance Committee, which Wyden chairs. The report discusses concerns about the actions of four attornes general in the context of: 

• Impact on the exceptionally vulnerable LGBTQIA+ community
• Possible abuse of Medicaid program oversight powers
• Possible abuse of consumer protection, antitrust, and trafficking laws
• HIPAA

The report is a good summary that pulls together a number of shameless initiatives by these AGs.

HHS OCR to Teaching Hospitals & Medical Schools: Get Written Consent for Sensitive, Intimate Exams

In a letter sent out today, the Office of Civil Rights informed teaching hospitals and medical schools that it has prepared a clarification of HHS's Conditions of Participation. Here's the bottom line:

Recent articles in both the mainstream media as well as medical and scientific literature have brought public attention to the traditional practice of allowing practitioners or supervised medical, advanced practice provider, or other applicable students to perform pelvic and other invasive examinations on patients who are under anesthesia. With this attention, patient advocates, physicians, and the students themselves have expressed concern about whether patients, especially anesthetized patients, have been sufficiently informed about this practice and whether their full consent was obtained before these educational exams were performed. 

[My additional note: Anyone who has spent time with third- and fourth-year medical students is likely to have heard about unconsented-to pelvic exams performed on unconscious patients for training purposes.] 

While CMS recognizes that these patient exams are often conducted as part of the vital skills clinical students must obtain during their training and education, we also firmly believe that patients have the right to make informed decisions on the healthcare services they receive so that they can give their full consent for those services including any training- and education-related examinations that may be performed in addition to any treatments or procedure that they expect to receive, especially if those patients will be under anesthesia at the time.  

Therefore, we are revising our interpretive guidance in the State Operations Manual (SOM), Appendix A for hospitals at tag A-0955, to include under the example of a properly executed and well-designed informed consent form, as well as the hospital’s policy and process for informed consent, the following elements (in addition to those outlined above) [new guidance in italics]:  

• Whether physicians other than the operating practitioner, including, but not limited to, residents, medical, advanced practice provider (such as nurse practitioners and physician assistants), and other applicable students, will be performing important tasks related to the surgery, or examinations or invasive procedures for educational and training purposes, in accordance with the hospital’s policies. Important surgical tasks include: opening and closing, dissecting tissue, removing tissue, harvesting grafts, transplanting tissue, administering anesthesia, implanting devices, and placing invasive lines. Examinations or invasive procedures conducted for educational and training purposes include, but are not limited to, breast, pelvic, prostate, and rectal examinations, as well as others specified under state law. 

While CMS understands that the performance of such examinations has been necessary for teaching medical and other students critical clinical examination skills, we believe that patient permission for these exams is an essential part of the informed consent process for hospitals, and necessary for compliance with the informed consent requirements in the CMS hospital CoPs. [Footnotes omitted.]

Practice pointer: Tell the student/trainee about the informed-consent process that preceded the training session. I've been told by more than one attending physician that the patient's consent was obtained before the training session. If nothing is said to the student/trainee, they may conclude (erroneously) that the patient's consent wasn't obtained.