Medicaid spent $581B in 2016; how it’s projected to grow over the next decade

Medicaid provided healthcare coverage to 72.2 million people in fiscal year 2016, an increase of 3.1% over 2015.

That increase corresponded with a 4.9% increase in spending over 2015, amounting to a total of $580.9 billion in spending for 2016, according to a new CMS report (PDF). The agency projected that over the following 10 years, expenditures would grow at an average annual rate of 5.7%, reaching over $1 trillion by 2026.

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In a statement, CMS Administrator Seema Verma said the projected growth in spending was “simply unsustainable” and that the government should be looking for ways to slow that growth.

However, Verma did note that due to reductions in projected long-term care spending, the average annual cost per enrollee will grow at a slower rate than previously expected.

Administrator Seema Verma

@SeemaCMS

Based on the projection of admin costs & slower projected growth in long-term care spending for @MedicaidGov, the avg. annual per enrollee cost growth is projected to be lower over the next 10 years. https://go.cms.gov/2pnXI0M 

5:03 PM – Sep 20, 2018

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• See Administrator Seema Verma’s other Tweets

“Compared to the prior report, total projected Medicaid expenditures for benefits and administrative costs are expected to be $104.1 billion less from 2016 through 2025, or 1.4 percent lower, reflecting slower growth in benefit expenditures (particularly for long-term care services),” the report said. “Annual per enrollee costs are projected to grow by 4.2 percent, or at a 0.1-percent lower rate, over the same period.”

The federal government has a good reason to be concerned about the growth of Medicaid spending. According to CMS projections, most of the added expenditures over the next decade will be paid by the federal government.

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That’s because many of the new Medicaid enrollees came in during the Affordable Care Act’s Medicaid expansion, an expansion that was heavily funded by the federal government. Some Republican health plans have proposed simply reducing the federal share of Medicaid expenditures, which would mean states would have to cover more of the expense growth themselves.

That would not, however, change the overall number of enrollees in the program. And according to CMS, most of the adults added by the expansion have already been accounted for.

“An estimated 12.2 million expansion adult enrollees were covered in 2017, based on enrollment counts included in 2017 financial data reported by the States to CMS,” the agency’s actuaries wrote. “By 2026, the expansion adult population is projected to grow to 13.3 million. These estimates are based on the assumption that 55 percent of potential expansion enrollees reside in States with expanded eligibility in 2017 and after.”

1.1 million people over 10 years isn’t a ground-shaking increase. And in fact, enrollment is set to taper off by 2026 (after reaching around 82 million people) while costs continue to surge.

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https://www.fiercehealthcare.com/payer/medicaid-spending-was-581b-2016-here-s-how-it-s-projected-to-grow-over-next-decade

HHS urging providers to use telemedicine for medication-assisted opioid treatment

HHS is pushing providers—particularly those in rural areas—to take advantage of telemedicine to increase access to medication-assisted addiction treatment (MAT).

But providers seeking to prescribe these medications require waivers, which can hinder access, especially in remote areas where doctors with these qualifications are in short supply.

So the Department of Health and Human Services and the Drug Enforcement Administration have worked together to ease these restrictions. Doctors can now prescribe buprenorphine, one of the most commonly used drugs for MAT, through a virtual platform, when before these clinicians had to be physically present with patients to offer these prescriptions.

“Not everyone is waivered, and as you might imagine, particularly in underserved areas there’s a profound shortage” of these clinicians, Brett Giroir, M.D., assistant secretary for health and senior adviser for opioid policy, said at a press briefing on Thursday.

As long as a clinician with a DEA number, which can include advanced practice providers who aren’t doctors, is present with the patient at the time of the consult, the waivered provider on the other end of the line can prescribe buprenorphine when deemed appropriate, Giroir said.

MAT, used in conjunction with other options such as psychological services, is a crucial way to address opioid addiction. Boosting access to MAT, particularly in rural regions hit hardest by the opioid epidemic, was one of a slew of recommendations issued late last year by the White House’s opioid commission.

The MAT waiver adjustments were made earlier this year, but HHS is now issuing a full-court press on alerting providers to their telemedicine options for opioid treatment, Giroir said.

HHS is taking steps to get the word out after a Substance Abuse and Mental Health Services Administration report showed progress in efforts to address the opioid crisis, such as fewer new heroin users and a decline in the number of people misusing opioids in 2017. More people got into treatment for opioid use disorder, as well, according to the report. However, more than 11 million American adults used opioids inappropriately last year, the report estimates.

Tackling the opioid crisis is a top priority for HHS and is one of Secretary Alex Azar’s central agenda items. At the briefing, Azar also noted that the agency had released $1 billion in grants for programs to address the epidemic.

“All of these actions are part of a well-coordinated strategy that we are bringing to bear here at HHS,” Azar said. “We’re tackling a problem that we have been dealing with for decades and did not get into overnight.”

Giroir said addressing the waiver problem is a clear example of why it’s crucial that the Trump administration takes a multiagency approach to combat the opioid epidemic. Effective solutions require not just HHS but also the Department of Justice, the Department of Housing and Urban Development and the Department of State, among others, he said.

“There is almost no single part of the solution that can be done in a silo,” Giroir said. “It must be done across the agency in a synergistic way.”

https://www.fiercehealthcare.com/tech/hhs-urging-providers-to-use-telemedicine-to-enhance-access-to-medication-assisted-opioid

New kidney care firms eye making money by keeping patients out of dialysis

San Francisco-based Cricket Health only has about a dozen employees.

But the tech-enabled kidney care provider has some big ambitions in the next year or so when it comes to disrupting the world of kidney care. Namely, they intend to show that their proprietary data analytics can identify high-risk patients to allow early intervention, improve outcomes and lower the costs of the care that chronic kidney disease often requires.

In a world of perverse payment incentives, that is far easier said than done, Arvind Rajan, Cricket’s CEO, told FierceHealthcare in an interview.

“It’s a completely broken system from end to end and that’s really what we set out to tackle,” Rajan said. “We provide care where the primary focus is slowing the progression of kidney failure.”

The company recently raised a $24 million series A funding round from a who’s who of investors including Cigna Corp., as well LinkedIn CEO Jeff Weiner, Joe Montana’s Liquid 2 Ventures and Rock Health co-founder Halle Tecco. They are not yet profitable, said Rajan, but they expect to become so in the next few years by saving payers money through better managing patients, keeping them out of the hospital and out of dialysis centers as long as possible.

Over the next 24 months, the company will begin ramping up its activities, scaling its workforce to about 100 people and deploying its first commercial programs for both payers and health systems around the country, he said.

If successful, they’ll be in good company. Earlier this year, CVS Health—which is still working to close a deal to acquire insurance giant Aetna—announced its plan to enter the chronic kidney care market. Its plan is to focus on patient education and early detection of kidney disease while working on developing and deploying a home-based hemodialysis device.

They’re also part of a wave of startups gaining investor attention for their focus on disrupting the massive kidney care market in light of shifts to value-based payments across healthcare. Among these companies are groups started by former executives of Denver-based kidney care giant DaVita.

Town Hall Ventures, the venture firm co-founded by a group of health industry veterans including former CMS Acting Director Andy Slavitt, just announced it invested in kidney care startup Strive Health. The company, which is led by former DaVita executives Bob Badal and Chris Riopelle and has gained investments from New Enterprise Associates, boasts that its kidney care service line, powered by specialized analytics, can cut inpatient utilization by 50% and triple rates of home dialysis adoption.

In April, Town Hall Ventures also announced it invested in Somatus, a Vienna, Virginia-based kidney care company led by another DaVita alum: CEO Ikenna Okezie. That company also specializes in offering value-based kidney care management services to health systems and payers.

“There is a big entrenched system, particularly among the two dominant players like DaVita where they have brick-and-mortar centers, they have dialysis chairs they need to fill and they’ve spent a lot of money on that infrastructure and system,” Trevor Price, general partner at Town Hall, told FierceHealthcare.

But that no longer makes sense, Price said.

“In today’s world, you can treat patients with chronic kidney disease in different settings that are frankly much better for them and lower cost for the system,” Price said. “You can provide forms of dialysis in the home. You don’t need brick-and-mortar settings and you don’t need to have all the big real estate infrastructure costs these companies have built up trying to dominate and control this massive industry. There is the opportunity to disrupt the system. And it benefits everyone.”

Rajan estimates Cricket Health is chasing a market worth well over $100 billion. An estimate published earlier this year by KBV Research projects that the global dialysis market is growing at an annual rate of 5.3% and will reach $124 billion by 2023. “Our main theses as a company is the way to truly change the cost curve of kidney disease is fundamentally be intervening earlier with kidney disease patients because you can keep patients from dialysis longer,” he said.

Of course, DaVita officials have said it has also evolved to address the changing healthcare landscape.

Kent Thiry, DaVita’s chairman and chief executive officer, told Bloomberg earlier this week that his company is “unusually suited to drive” change in the industry. The company is selling its primary health business while investing in new businesses. “Every patient is different,” Thiry said. “What we’re proud of is we give each patient very customized attention in the midst of a very disciplined process. We are the clinical leader in America both in terms of execution and in innovation.”

The announcement of Cricket’s fundraising comes just weeks after California’s General Assembly passed a controversial bill which would cap payments for dialysis providers with connections to charities that subsidize their patients’ commercial insurance—a measure lauded by insurers and employers but opposed by dialysis providers and the American Kidney Fund.

In November, voters will also consider a statewide ballot initiative known as Proposal 8, which would cap the revenue dialysis providers could make from patients with commercial insurance.

Rajan said the legislation reflects the frustration of payers over the cost of in-center dialysis care, which can reach well north of $100,000 a year and is not the best treatment option for most patients.

“I think this reflects the tipping point of that frustration which has driven the legislation around the country,” he said. “What we’re excited about is it’s the first step in payers reassessing the fundamental understanding of how to approach kidney care. Even the conversations we’ve had with payers in the last six months compared to when we started three years ago is fundamentally different.”

https://www.fiercehealthcare.com/hospitals-health-systems/more-companies-invest-kidney-care-space

Geron to Update on Imetelstat Collaboration with Janssen

Geron Corporation (Nasdaq: GERN) today announced that it will host a conference call to provide an update on the imetelstat collaboration with Janssen Biotech, Inc. (Janssen) on Thursday, September 27th at 8:00 a.m. ET.

Participants may access the conference call live via telephone by dialing domestically +1 (877) 303-9139 or internationally +1 (760) 536-5195. The passcode is 7987354. Participants are advised to dial in at least 10 minutes prior to minimize any delay in joining the call. A live, listen-only webcast will also be available on the Company’s website at www.geron.com/investors/events. If you are unable to listen to the live call, an archived webcast will be available on the Company’s website for 30 days.

https://www.marketscreener.com/GERON-CORPORATION-9419/news/Geron-to-Provide-an-Update-on-the-Imetelstat-Collaboration-with-Janssen-on-September-27-2018-27325624/

Indivior shares drop for second day as hopes for next blockbuster drug dim

Shares of Indivior fell for a second straight day, as prospects for the British drugmaker’s new potential blockbuster drug waned, months after revealing that its former market-leading opioid addiction drug lost market share to a generic rival.

The company sharply lowered guidance for its recently-launched once-monthly injection Sublocade on Wednesday, citing further delays in getting the drug to patients, while also announcing a new set of lower full-year expectations for total revenue and earnings.

Shares, which have almost halved in value this year, fell 7 percent on Thursday, a day after shares slumped 16 percent right after the company announcement.

In July, Indivior scrapped its full-year guidance after saying it lost market share to a cheaper alternative to its blockbuster film-based drug Suboxone, launched by India’s Dr. Reddy’s Pharmaceuticals.

The company, which had hoped that sales from Sublocade would offset the drop in sales of Suboxone, said on Wednesday that its forecast of achieving $25 million (£19 million) to $50 million in Sublocade revenue this year would not be met as it “significantly underestimated” problems related to the new drug launch. It now expects 2018 Sublocade revenue in the range of $8 million to $10 million.

Analysts at Jefferies slashed its long term earnings per share guidance by over 50 percent, and price target by over 50 percent to 250 pence, saying “delayed Sublocade ramp-up significantly impacts a largely fixed cost base despite cost savings.”

In July, the company flagged “some friction” in the distribution and reimbursement model for Sublocade, which made doctors less willing to prescribe the new drug.

“In the near-term, we acknowledge that with respect to Sublocade we have substantially underestimated the lag time associated with the approval of medical benefit coverage of individual patients,” the company said on Wednesday.

https://www.marketscreener.com/DR-REDDY-S-LABORATORIES-9058869/news/Dr-Reddy-Laboratories-Indivior-shares-drop-for-second-day-as-hopes-for-next-blockbuster-drug-dim-27327267/

What Is Driving Biopharma Execs Into Politics?

In February, Bob Hugin, former CEO of Celgene, announced his run for the U.S. Senate to represent New Jersey. After winning the Republican primary to become the party’s candidate, he now faces incumbent Democratic Senator Robert Menendez in the upcoming November election.

Hugin is not the only ex-biotech executive-turned-politician. Alex Azar, currently the Secretary of the Department of Health and Human Services, was the former president of Lilly USA, LLC, the largest division of Eli Lilly and Company.

Making the jump from biotech to politics may not seem like a typical career progression. So, what is driving these executives into politics?

Drug Pricing

People tend to run for office because they feel strongly about certain issues. When thinking about the biotech and pharmaceutical industries, the first issue to come to mind is drug pricing.

Drug pricing tends to be intimately political, whether we want it to be or not. It is a common issue on which candidates define their stance, and access to affordable healthcare is a top voter concern.

Not surprisingly, the campaign between Hugin and Menendez has become a ‘referendum on drug prices.’ Hugin cites his biotech experience as a leg up for him as an advocate for health care reform, stating on his website that he will “promote policies that incentivize bold experimentation and innovation that can find cures and lower costs.”

However, Hugin has come under fire for multiple price increases of Celgene’s top medication Revlimid, a cancer drug, while he was leading the company. In fact, its price was increased three times in 2017, resulting in an almost 20 percent cost increase from 2016 to 2017.

Hugin defended Revlimid’s price increases, citing its increased value as it was approved for use in more patients than originally intended. He told STAT News, “More than 90 percent of the patients that ever took a Celgene cancer drug paid $50 or less per month in copay. And the company invested more than 40 percent of its revenue into R&D, because it’s not good enough where we are in cancer, even though we’ve made good strides.”

Azar even seemed to call out Celgene’s drug price increases, without naming the company outright, in his remarks about President Donald Trump’s drug pricing blueprint in May: “For example, the company that makes one of the 10 most common drugs in [the protected Medicare Part D categories] raised that drug’s price 20 percent in the last 12 months. That particular drug, in 2015, cost $11,500 per month. Under Medicare Part D, that means seniors using the drug will typically owe an extra $115 every month. They just went from paying $575 per month to $690 per month, at a time when the average Social Security check is $1,400.”

Despite Azar’s pharma background, he seems to be adamant about making drugs more affordable. “Drug companies have insisted we can have new cures or affordable prices, but not both,” he said in the same remarks. “I’ve been a drug company executive—I know the tired talking points. I’m not interested in hearing those talking points anymore, and neither is the President.”

Azar supporters highlight his pharma experience as an ‘advantage in figuring out how to make drugs more affordable,’ although critics are still skeptical of whether actions will actually be implemented to lower drug prices. Some even note the three-fold price increase of insulin during his 10 years at Lilly.

Other Motivations

Drug pricing and healthcare issues don’t seem to be the only motivating factor driving Hugin to run for office. He states his stances on a variety of issues on his website, including his support of LGBTQ rights, protecting the environment, securing the border and immigration reform. Hugin also draws heavily from his military experience, where he served 14 years in the U.S. Marine Corps, and education background, as the first person in his family to attend college, as inspiration for his viewpoints.

Azar began his career in law before becoming the general counsel and eventually deputy secretary at HHS under President George W. Bush. It was only after his time at HHS that he transitioned into the biopharma industry with Eli Lilly and Company. His motivations seem to be based on drug pricing and healthcare issues as his four main priorities are decreasing drug cost, making health insurance affordable, focusing Medicare payments on quality and confronting the opioid addiction epidemic.

With the intertwined nature of drug pricing and politics, it may not be surprising to see more biopharma execs leave their post in pursuit of holding office and impacting healthcare policy.

https://www.biospace.com/article/ip3o-what-is-driving-biopharma-execs-into-politics-/

Canopy Growth investors approve $4B investment by Constellation Brands

Canopy Growth (CGC) is pleased to announce that at the Company’s annual general and special meeting of shareholders held on September 26, 2018, shareholders approved the previously-announced $4B private placement of 104,500,000 common shares and 139,745,453 common share purchase warrants of the company to CBG Holdings LLC, an affiliate of Constellation Brands (STZ).

https://thefly.com/landingPageNews.php?id=2796141