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Saturday, December 14, 2019

How Congress Can Make Real Progress on Drug Prices

The Lower Drug Costs Now Act (H.R. 3) would impose federal price controls on prescription medicines. The bill would limit Americans’ access to lifesaving therapies, impede the development of new treatments for deadly and debilitating diseases, and inflict harm that vastly exceeds the budgetary savings it promises. Congress should reject the policies of H.R. 3 and pursue drug-pricing reforms that encourage innovation. Specifically, Congress should reform Medicare prescription drug payment programs and practices that prevent affordable generic medicines from coming to market.

KEY TAKEAWAYS

To combat rising prescription drug costs, Congress should address flawed government policies and provide relief for patients and taxpayers.

Congress can start by rejecting H.R. 3, which would limit access to life-saving medicines, impede development of new cures, and inflict harm on Americans.

Congress should reform Medicare prescription drug programs and ban anti-competitive practices that prevent affordable generic medicines from coming to market.

The House of Representatives is scheduled to vote this week on H.R. 3, the Lower Drug Costs Now Act, which would impose federal price controls on prescription medicines. The bill would limit Americans’ access to lifesaving therapies, impede the development of new treatments for deadly and debilitating diseases, and inflict harm that vastly exceeds the budgetary savings it promises.

Congress should reject the policies of H.R. 3 and pursue drug-pricing reforms that encourage innovation. Specifically, Congress should reform Medicare prescription drug payment programs and practices that prevent affordable generic medicines from coming to market. Such reforms include restructuring the Medicare Part D program to protect seniors from high out-of-pocket drug spending and refining federal laws that brand-name manufacturers are exploiting to prevent competition from generics.

These proposals enjoy overwhelming support among both parties in the House and Senate and could be signed into law by the President. All proposals are included in an alternative bill (H.R. 19) released by House Republicans on December 6.1

Acting on these reforms would provide relief from high prescription drug prices, while fostering continued medical innovation that will cure diseases, lengthen life expectancy, and improve quality of life.

H.R. 3: The Wrong Path

The Lower Drug Costs Now Act would reduce drug prices by government fiat, jeopardizing the quality of health care that Americans deserve.

What is worse is that H.R. 3 will not reduce drug prices at all because it will not become law. The House vote on the measure is expected to split largely along party lines, the bill lacks support in the Senate, and it is expected to face a veto threat from President Donald Trump. If Congress cannot move beyond the flawed and divisive H.R. 3 and toward effective reforms, it will adjourn next year having done nothing about drug prices.

Drug-pricing reform need not fall victim to partisan squabbling. There is broad bipartisan support for proposals to reduce prescription drug prices. Democrats and Republicans have reached a rare consensus on this contentious issue, backing reforms to Medicare prescription drug coverage and supporting a ban on practices that impede the entry of affordable generic drugs into the marketplace.

By shunning these broad-based reforms in favor of a vote on H.R. 3, House leaders have chosen partisan posturing over bipartisan progress on drug prices.

A better path is needed.

How Congress Can Make Real Progress

Making Medicines Affordable for Seniors: Reforms to Medicare Payment Practices. The federal government, through Medicare, helps seniors and people with disabilities to access prescription drugs via two programs: Medicare Part D and Medicare Part B. Both programs need reform in order to address policies that provide flawed financial incentives to drug makers and insurance companies that are driving up prescription drug costs.

Part D Restructuring. There is broad consensus on the need to reform Medicare prescription drug coverage. Members of both parties agree that the Medicare Part D benefit, which was created in 2003, requires restructuring.

Under Medicare Part D, drug prices are set through negotiations between private pharmacy benefit managers and drug manufacturers without government involvement. Competing prescription drug plans sponsor insurance policies that cover drugs and set their premiums. The government subsidizes these premiums at fixed rates. Prescription drug plans compete for seniors’ business based on quality and price. Seniors can choose the plan that provides them the best value, covering the medicines they take at the most affordable prices.

Consumer choice and competition have made Part D the rarest of government programs: one in which spending has not spiraled out of control. In fact, government actuaries report that federal general revenue spending on the program was $67.8 billion in 2018. That is less than the amount that the government spent on Part D in 2015 ($68.4 billion).2

Over that same period, government spending on Medicare Part A (hospital inpatient benefits) increased by 10.5 percent (from $279 billion to $308 billion),3

while general revenue spending on Part B (physician and other outpatient benefits) grew by 24.2 percent (from $203.9 billion to $253.2 billion).4

The Part D program has also resulted in reduced spending elsewhere in the Medicare program by making drug therapies broadly accessible to seniors. Multiple studies have found that these therapies help to keep beneficiaries out of hospital beds and emergency rooms, reducing Medicare spending on hospitals and doctors.

For example, the Congressional Budget Office (CBO) estimates that a 1 percent increase in prescriptions filled by Medicare beneficiaries reduces spending on medical services by 0.2 percent.5

Applying the CBO methodology, Chris Pope of the Manhattan Institute estimated that an extra $100 in prescription drug use by Medicare beneficiaries can be expected to reduce the program’s spending on other medical services by $95, while delivering better outcomes.6

Relying on different economic assumptions, a December 2016 study by economist Robert J. Shapiro found that the Part D program had produced net Medicare savings of $679.3 billion between 2006 and 2014.7

The Part D program has achieved these results through competition among prescription drug plans and through a standard drug benefit that apportions costs among beneficiaries, plans, manufacturers, and the government.

The program’s complex benefit structure could nonetheless be improved. While drug plans and beneficiaries finance prescription drug spending for the vast majority of seniors, the taxpayers shoulder 80 percent of the burden of the small minority of seniors whose annual drug spending falls into the program’s catastrophic tier (annual spending that exceeds $8,140).

Although overall Part D spending growth has been quite modest, the Medicare Payment Advisory Commission (MedPAC), an advisory arm of Congress, has noted that spending in the catastrophic tier grew from 25 percent of Part D costs in 2007 to 54 percent in 2017.8

MedPAC attributes this in part to the program’s benefit structure.There is broad congressional support for restructuring the Part D benefit. Several proposals have emerged. While they differ in detail, they share two important features: They cap the amount that seniors spend annually on prescription drugs, and they shift financing in the catastrophic tier from taxpayers to Part D plans and drug manufacturers.9

Table 1 compares the proposals with current law. IB5016 Table 1

Under current law, beneficiaries are responsible for meeting a deductible, set at $415 in 2019 (Tier 1). In Tier 2, which ranges from $416 to $3,820 in drug spending, the beneficiary share drops to 25 percent, with the plan bearing 75 percent of the cost. In Tier 3, commonly known as the “donut hole” or “coverage gap,” current law requires drug manufacturers to assume 70 percent of the costs. The remaining 30 percent is split between the beneficiary (25 percent) and the plan (5 percent). Finally, in the catastrophic tier, the government bears 80 percent of the costs, the plan 15 percent, while beneficiaries pay 5 percent. There is no limit on out-of-pocket expenditures.

This benefit structure incentivizes plans and manufacturers to push high-cost patients as quickly as possible into the catastrophic tier, where taxpayers finance 80 percent of the costs. Plans have powerful motivation to manage costs aggressively in Tier 2, but very little in Tier 3 or the catastrophic tier. Manufacturers have every motivation to hustle people through Tier 3 and into the catastrophic tier. This may help explain why manufacturers do not provide big rebates for the most expensive drugs: Plans have little reason to seek them, and drug makers have little incentive to grant them.

The most consequential feature of all three restructuring plans (as described in Table 1) is that they attack these perverse incentives in roughly the same way. All reduce the share of costs that government bears in the catastrophic tier; and all place additional costs in that tier on Part D plans and pharmaceutical manufacturers. The proposals, despite their differences, have other commonalities as well. They all:

Eliminate the coverage gap by requiring the beneficiary to pay a constant share between the deductible and the catastrophic threshold. This share is 25 percent in all but the House Ways and Means Republican plan, which reduces the beneficiary share of costs to 15 percent in Tiers 2 and 3.
Reduce the government share in the catastrophic tier from 80 percent to 20 percent.
Require the manufacturer and plan to bear larger shares of the cost in the catastrophic tier, although the percentages differ among the plans.
Establish a limit on the amount a beneficiary spends out of pocket for prescription medicines. The limit differs among the proposals but, unlike current law, all put a limit into place.

These commonalities are far more significant than the differences among the proposed benefit designs. All would benefit seniors, especially by capping their annual drug expenses. All require manufacturers and plans to shoulder more of the burden of this catastrophic coverage. And all relieve taxpayers of much of the cost of high prescription drug expenses.

A preliminary CBO analysis of the Senate Finance Committee proposal estimated that the Part D benefit restructuring would reduce federal spending by $34.6 billion over 10 years.10

Key details remain unresolved, and those details will greatly affect how well these promising reforms will work in practice. Congress should work through these critical details and refine these proposals, taking advantage of the broad bipartisan consensus in favor of restructuring the Part D program in ways that benefit seniors and taxpayers.

Other Proposals to Make Medicines Affordable for Seniors

Restructuring the Medicare Part D program would be a boon both to taxpayers and to Medicare beneficiaries. And, there are other changes that can be made in the Part D program that would benefit seniors who take prescription medicines. These include:

Requiring Part D plan sponsors to provide prescribing physicians with real-time benefit information. This provision would require Part D insurers to implement real-time benefit tools that would electronically transmit eligibility, formulary, and benefit information to each enrollee’s prescribing physician. While insurers already provide this information to pharmacies, consumers would benefit if real-time information was provided to their prescribing physician. This reform would allow doctors to tell the patient of any clinically appropriate alternatives, what the patient would have to pay at the counter, and of pharmacy options, including the option to have prescriptions filled through the mail. This information would empower patients to save on prescription medicines.11

Section 125 of S. 2543 and section 116 of H.R. 19.
Incentivizing Part D plans to provide Part D rebates at the point of sale.12

Section 132 of H.R. 19.

Part D drug plans generally enter into rebate arrangements with drug manufacturers. Unlike price discounts, which are generally made at the point of sale, rebate transactions take place after the fact. They thus are paid directly from the manufacturer to the drug plan, bypassing the consumer. Although rebates indirectly benefit seniors by reducing premiums for their coverage, they do not provide savings at the pharmacy counter. An example is a medicine with a list price of $150 on which the manufacturer pays a $50 rebate to the drug plan. A senior whose cost sharing on the medicine is 10 percent will pay $15 at the counter—10 percent of the gross price—rather than $10, which is 10 percent of the price, net of rebate. Earlier, the Trump Administration withdrew a rule that would have required plans to pass on rebates at the counter after studies showed that the requirement would increase premiums for Part D coverage.13

Debra A. McCurdy, “HHS Scraps Pending Rule to Remove Anti-Kickback Safe Harbor Protection for Drug Rebates to Health Plans, PBMs,” ReedSmith, July 12, 2019, https://www.healthindustrywashingtonwatch.com/2019/07/articles/other-health-policy-developments/other-oig-developments/hhs-scraps-pending-rule-to-remove-anti-kickback-safe-harbor-protection-for-drug-rebates-to-health-plans-pbms/ (accessed December 9, 2019).

Congress should enact a law that would allow plan sponsors to pass at least some portion of the rebate to the beneficiary at the counter.
Allowing beneficiaries to spread out their cost sharing over time.14

Section 133 of H.R. 19, and section 116 of S. 2543.

Seniors who are prescribed very expensive drugs can face daunting cost-sharing requirements. This is especially true in the early part of the year, when beneficiaries have yet to meet their plan’s deductible. These costs can be daunting. A recent survey found that nearly half of seniors have abandoned a medicine prescribed by their doctor because of its high price.15

Jeff Lagasse, “Nearly Half of Physicians Abandoned a Prescription at the Pharmacy Because It Was Too Expensive,” Healthcare Finance, October 30, 2018, https://www.healthcarefinancenews.com/news/nearly-half-consumers-abandoned-prescription-pharmacy-because-it-was-too-expensive (accessed December 9, 2019).

Congress should address this by requiring plans to allow enrollees who must pay large sums in a 30-day period to spread those payments out over the course of multiple months. While this provision would not reduce what the senior pays for drugs, it would provide welcome relief to those on fixed incomes who struggle to meet their cost-sharing obligations all at once.
Changes to Part Medicare B. While Medicare Part D covers drugs that patients typically obtain at pharmacies, Medicare Part B covers physician-administered drugs, including injected and infused medicines, such as chemotherapy. Unlike Part D, where competing plans negotiate rates with manufacturers without government intervention, the government sets prices for Part B drugs. The law specifies that Medicare is to reimburse for physician-administered drugs based on their average sales price, net of discounts, rebates, and other price concessions.16

Under the ASP payment system, Medicare pays providers ASP+6 percent for the drug. ASP reflects the average price realized by the manufacturer for its sales broadly across different types of purchasers and for patients with different types of insurance coverage. It is based on manufacturers’ sales to all purchasers’ net of manufacturer rebates, discounts, and price concessions (with certain exceptions). Manufacturers report ASP data to the Centers for Medicare and Medicaid Services on a quarterly basis, and the agency updates the payments quarterly. “Part B Drugs Payment Systems,” Medicare Payment Advisory Commission, October 2017, http://www.medpac.gov/docs/default-source/payment-basics/medpac_payment_basics_17_partb_final.pdf?sfvrsn=0 (accessed December 9, 2019).

Physicians are paid six percentage points above the average sales price (ASP+6). That six-percentage-point add-on is intended to cover provider costs associated with handling and storage of the drugs, as well as distributor markup. It also is meant to compensate for the fact that, by definition, some providers will pay prices that exceed the average.

Government spending on Part B drugs has multiplied. Between 2011 and 2016 that spending grew from $17.6 billion to $28.0 billion, an average annual growth rate of nearly 10 percent. Beneficiaries have shared the burden of growing Part B drug costs, since they are required to pay a coinsurance rate of 20 percent.

Critics of the Part B methodology have noted that physician reimbursement rises with a drug’s cost. The add-on payment for a $100 drug is $6. The add-on payment for a $100,000 drug is $6,000. The payment system thus rewards the use of the most expensive medications.

There is a growing congressional agreement in favor of reforming the Part B drug reimbursement system to benefit taxpayers and beneficiaries. Some policy proposals offer a platform for reforms. These include:

Capping add-on payments.17

S. 2543, section 110; H.R. 19, section 104. H.R. 19 would cap the add-on payment at $2,000 for certain immunotherapies.

While there is some rationale for letting add-on payments grow with a product’s price, Congress should impose a limit. The Finance Committee bill, for example would cap add-on payments at $1,000.18

H.R. 19 would also vary the add-on payment based on a drug’s price. Products with prices below the median would be reimbursed at ASP+10, while reimbursement for drugs whose prices were at the 85th percentile or higher would be reimbursed at ASP+4. H.R. 19, section 103.
Providing beneficiaries with more price transparency.19

S. 2543, section 106; H.R. 19, section 101.

Medicare requires seniors to pay 20 percent of the cost of outpatient services. What seniors may not know is that Medicare pays higher rates for the same service, based on where it is provided. For example, Medicare generally pays more for a service provided in a hospital outpatient department than in an ambulatory surgical center or doctor’s office. Beneficiaries really have no way of knowing this, even though they are responsible for 20 percent of the costs. The Administration has taken a first step toward correcting this. Beginning in 2018, the Secretary created an online tool to enable beneficiaries to compare prices between hospital outpatient departments and ambulatory surgical centers. This provision would add price information for services provided in physician offices, enabling beneficiaries to compare prices for a service across all three sites of care.
Exploring the possibility of moving coverage of certain Part B drugs to Part D.20

S. 2543, section 147; H.R. 19, section 507.

Part D uses private negotiation to set drug prices; the government sets Part B prices. The result is that spending on the Part D program has grown only moderately, while Part B drug spending has exploded. The Senate Finance Committee directs MedPAC, a panel of outside experts, to study moving some physician-administered drugs from the price-controlled Part B program to the market-based Part D program. Bringing market forces to bear on these drug prices would benefit seniors and taxpayers alike.
Revisiting the Medicare Part B drug payment methodology.21

S. 2543, section 112; H.R. 19, section 502.

Congress enacted the ASP+6 methodology in 2003. There is bipartisan support for undertaking a comprehensive review of the methodology, beginning with an assessment by the Government Accountability Office (GAO).
Reducing Drug Prices Through Choice and Competition. Restructuring the Medicare Part D benefit and reforming Medicare Part B reimbursement of physician-administered drugs would provide welcome relief on drug prices to 60 million Medicare beneficiaries. There is also bipartisan support in Congress for measures that will make prescription drugs more affordable for the 270 million Americans who are not on Medicare.

These policies would encourage market competition by preventing brand-name drug manufacturers from squelching or impeding competition from generic manufacturers.

Federal law incentivizes the search for new cures by granting innovators market exclusivity—a period of time during which their product is shielded from competing generic versions.22

Once that period expires, other companies can produce and sell medicines that are identical or equivalent to the innovator product.23

Because generics generally cost far less than brand-name drugs, consumers begin saving money as soon as a generic product comes on market. The Association for Accessible Medicines (AAM), an association representing generic drug manufacturers, estimates that 90 percent of prescriptions filled by Americans in 2017 were for generic medicines and they account for only 23 percent of drug spending.24

The vast majority are very affordable, with 93 percent of generic products costing $20 or less.25

Those savings add up. According to the AAM, Americans saved more than $265 billion in 2017 alone by using generic medicines instead of their brand-name competitors.26

Over the 10-year period ending in 2017, those savings to consumers totaled nearly $1.8 trillion.27

The savings would be even higher under proposals that prevent brand-name manufacturers from slowing down or impeding the entrance of generic products into the marketplace. Those reform proposals enjoy bipartisan support and include:

Allowing the U.S. Food and Drug Administration (FDA) to prevent “blocking” a generic drug from coming to market.28

S. 1895, section 205 and H.R. 19, section 321.

In addition to providing market exclusivity for innovator products, federal law entitles the first generic substitute for a brand-name drug to a 180-day period of market exclusivity.29

U.S. Code 355(j), https://www.govinfo.gov/content/pkg/USCODE-2010-title21/html/USCODE-2010-title21-chap9-subchapV-partA-sec355.htm (accessed December 9, 2019).

That is, the first generic to win FDA approval cannot have any generic competitors for a six-month period. That 180-day clock starts to run when the FDA grants final marketing approval. Some generic companies have “parked” their applications—not filing their application for final marketing approval even when the FDA is prepared to approve it.30

Scott Gottlieb, “The HELP Committee’s Fix For 180-Day Generic Marketing Exclusivity: Does It Solve the Problem?” Health Affairs Blog, May 30, 2019, https://www.healthaffairs.org/do/10.1377/hblog20190529.223594/full/ (accessed December 9, 2019).

In some cases, the brand-name company makes payments to the generic manufacturer in exchange for not seeking final marketing approval from the FDA.31

Ibid.

By not launching, the generic company retains its 180-day exclusivity. That prevents another generic company from bringing its drug to market. Congress should end this practice by allowing the FDA to grant marketing approval to any generic company if no other company has obtained final marketing approval.
Creating legal remedies for generic companies to obtain samples of brand-name products.32

S. 1895, section 203, and H.R. 19, sections 301–303.

A generic company must verify that it has tested its product to demonstrate that it has met FDA approval criteria. As part of this testing, the company must use reference samples of brand-name drugs. Manufacturers of brand-name drugs sometimes use a loophole in current law to block potential generic competitors from buying samples of their products. Without the samples, a generic company cannot meet the FDA approval criteria and therefore cannot bring a product to market that competes with the brand-name drug. Congress should grant developers of generic drugs and biosimilars the right to seek judicial remedies in cases where a manufacturer refuses to supply samples of its products. The courts can make a judgment as to whether the refusal to provide samples is appropriate on a case-by-case basis.
Allowing the FDA to reject efforts by manufacturers to delay approval of a generic product.33

Ibid.

The law permits manufacturers to file “citizen petitions” with the FDA to protect their intellectual property rights. The petition process has sometimes been used for purely dilatory purposes. Congress should give the FDA authority to summarily deny any petition whose primary purpose is to delay approval of a generic product or which does not raise valid scientific or regulatory issues.34

Under current law, the FDA cannot summarily dismiss a petition unless both criteria are met. The proposal would give them authority to dismiss if either is met.

Each of these provisions is aimed at closing loopholes in federal law that impede market competition between makers of innovative medicines and their generic competitors. The overall result would be more robust competition and lower prices for medicines. According to the CBO, these provisions collectively would save consumers between $27 billion and $30 billion on drug spending over the next decade.35

Unlike government rate-setting proposals, these savings would derive from ending certain anticompetitive practices, and thus reducing prices by enhancing market competition. Unlike those rate-setting regimes, these changes, like others discussed in this paper, can become law now.

The Wrong Way to Reduce Drug Prices: H.R. 3

H.R. 336

would institute an unprecedented intervention by the federal government into the regulation of prescription drug prices. Legal analysts at the Congressional Research Service, a nonpartisan arm of Congress, note that it raises constitutional concerns.37

Many economists, including the President’s Council of Economic Advisers (CEA), believe that H.R. 3 would dramatically reduce the number of new treatments for diseases, and that the economic impact of these consequences would dwarf projected federal savings. While H.R. 3 purports to dramatically reduce drug costs, H.R. 3 would not reduce them at all. It is a partisan vehicle that will preserve the status quo because it will not become law.The bill would establish a system in which the U.S. government bases prices for cutting-edge drug treatments on those set by foreign governments. The measure would set an upper price limit at 1.2 times a drug’s average price in six other countries (Australia, Canada, France, Germany, Japan, and the United Kingdom).

The Secretary of Health and Human Services then would seek to “negotiate” prices below that upper limit for at least 25—and as many as 250—drugs each year.

The prices resulting from these “negotiations” would be applied throughout the U.S. market. The government would require manufacturers to offer that price to private, as well as public, payers or face massive fines.

A manufacturer that declines to negotiate the price of any of its products would incur an excise tax of up to 95 percent of the revenues it derived from that product in the preceding year.

How H.R. 3 Affects Access to Care

Proponents of H.R. 3 claim that it would have no adverse effect on innovation or on access to pharmaceuticals. But aggressive government price-setting has damaged innovation and limited access to new treatments in all six of the countries whose price controls the bill would import.

If the U.S. adopts price controls, it risks the same results here. Access to new drugs is much greater in the U.S. than in countries with price controls, in part because of having shunned price controls.

Of new active substances introduced between 2011 and 2018, 89 percent are available to Americans, compared with 62 percent in Germany and 60 percent in the United Kingdom.38

One-half or more of these new therapies are unavailable to Australian, Canadian, French, and Japanese patients.This lack of access can have damaging effects. A study by IHS Markit examined outcomes for non-small-cell lung cancer, the leading cause of cancer mortality in the U.S. and the world.39

The report compared how Americans with that disease fared, to how citizens of other highly developed countries, including Australia, Canada, France, and the U.K., fared.The study concluded that Americans gained 201,700 life years as a result of faster access to new medicines. Half those gains would have been wiped out, the study found, if Americans had the same limited access to those treatments as patients in other countries.

Patients will be worse off if Washington emulates the price-control regimes of foreign governments.

H.R. 3’s Impact on Innovation

A December 2019 analysis by the President’s Council on Economic Advisers estimates that 100 fewer drugs would be introduced—one-third fewer than the 300 projected to enter the market—over the next decade.40

In developing that estimate, the CEA study relied on a preliminary analysis by the CBO, which estimated that H.R. 3 would reduce pharmaceutical company revenues by $500 billion to $1 trillion over the next decade.41

Noting that pharmaceutical companies typically spend between 15 percent and 20 percent of revenue on research and development, the CEA study estimated that pharmaceutical companies would spend between $75 billion and $200 billion less on research and development if H.R. 3 gained enactment. Assuming that it costs roughly $2 billion to develop a new drug, the CEA concluded that H.R. 3 could result in as many as 100 fewer drugs entering the market over the next decade.42

The annual savings to the federal government, which the CBO preliminarily estimated at $34.5 billion, would be dwarfed by the economic costs the measure would impose.43

Fewer new medicines mean shorter life expectancies (a four-month reduction, according to the CEA study) and lower productivity. In all, the CEA put the annual economic price tag at $375 billion to $1 trillion, a figure that is more than ten times higher than H.R. 3’s projected federal savings.

Conclusion

Amid a climate of partisan discord, Congress has arrived in an unfamiliar place: a bipartisan consensus on policies to rein in drug prices through increased choice and competition. Legislation that would provide relief to seniors from high drug costs and spur competition that will reduce drug prices for all Americans is within the grasp of Congress. The contours of these policies are contained in H.R. 19, a proposal assembled by congressional Republicans based on provisions that have demonstrated bipartisan backing. Congress should examine and refine these proposals to ensure that they all meet their intended goals, including the restructuring of the Medicare Part D benefit, and enacting them into law.44

It appears, however, that the House will vote on H.R. 3, a bill that would do great damage to the health of Americans, particularly those whose lives may depend on the development of new cures. Because it will not become law, H.R. 3 will preserve the status quo of high drug prices.

Americans need relief from high drug prices. Congress should deliver it.

Doug Badger is Visiting Fellow in Domestic Policy Studies, of the Institute for Family, Community, and Opportunity, at The Heritage Foundation, and a Senior Fellow at the Galen Institute.

https://www.heritage.org/health-care-reform/report/how-congress-can-make-real-progress-drug-prices

10 former NFL players charged by DOJ in alleged health care fraud scheme

The Department of Justice announced charges Thursday against 10 former NFL players over an alleged scheme to defraud millions of dollars from the league’s health care benefits program.

Prosecutors allege that the players submitted false and fraudulent claims for high-cost medical equipment to the league’s Gene Upshaw Health Reimbursement Account Plan for retired players between June of 2017 and December of 2018.

In a press release, the Justice Department said the charges range from health care fraud, wire fraud and conspiracy — involving over $3.9 million in false health care claims.

Among those charged include former Washington Redskins running back Clinton Portis, 38, former San Francisco 49ers cornerback Carlos Rogers, 38, and former Houston Texans safety Ceandris Brown, 36. The government has also filed a notice that it intends to charge former New Orleans Saints wide receiver Joe Horn, 47, with conspiracy to commit health care fraud.

An attorney for Portis, Mark Dycio, told ABC News Thursday the charges came as a “shock” to his client and that Portis maintains his innocence.

“Mr. Portis had no knowledge that his participation in what he believed to be an NFL sanctioned medical reimbursement program was illegal,” Dycio said.

According to the Justice Department, the former players allegedly offered to submit claims for medical equipment including hyperbaric oxygen chambers, cryotherapy machines and ultrasound machines in exchange for “kickbacks and bribes that range from a few thousand dollars to $10,000 or more per claim submitted.” The players are alleged to have fabricated documents like prescriptions and invoices in order to secure payouts for their claims.

“The defendants are alleged to have developed and executed a fraudulent scheme to undermine a health care benefit plan established by the NFL — one established to help their former teammates and colleagues pay for legitimate medical expenses,” said U.S. Attorney Robert M. Duncan, Jr., for the Eastern District of Kentucky. “The defendants allegedly submitted false claims to the plan and obtained money for expensive medical equipment that was never purchased or received, depriving that plan of valuable resources to help others meet their medical needs.”

He added, “We have prioritized the investigation and prosecution of health care fraud in our office, and we appreciate the partnership we share with the Criminal Division and the FBI in pursuing these important matters.”

In a briefing with reporters, Justice Department officials said they were alerted to the scheme by the health care company Cigna after it detected anomalies in the types of claims being filed by the players. They noted the investigation remains ongoing, leaving open the possibility others may be charged.

Assistant Attorney General Brian Benczkowski said there’s currently no evidence of doctors being aware of or participating in the players’ alleged fraud.

Robert McCune, 36, John Eubanks, 36, Rogers and Brown were all arrested, according to a department official, while six others named in the indictments surrendered voluntarily.

The maximum sentence for the charges range from 10 to 20 years, and DOJ noted that all are presumed innocent until proven guilty.

ABC News was not immediately able to reach attorneys for all of the players named in the indictments.

https://abcnews.go.com/Politics/doj-charges-10-nfl-players-alleged-health-care/story?id=67683627

Toxic chemicals from LCDs found in nearly half of household dust samples

Chemicals commonly used in smartphone, television, and computer displays were found to be potentially toxic and present in nearly half of dozens of samples of household dust collected by a team of toxicologists led by the University of Saskatchewan (USask).

The international research team, led by USask environmental toxicologist John Giesy, is sounding the alarm about liquid crystal monomers–the chemical building blocks of everything from flat screen TVs to solar panels–and the potential threat they pose to humans and the environment.

These chemicals are semi-liquid and can get into the environment at any time during manufacturing and recycling, and they are vaporized during burning. Now we also know that these chemicals are being released by products just by using them. We don’t know yet whether this a problem, but we do know that people are being exposed, and these chemicals have the potential to cause adverse effects.”

John Giesy, Canada Research Chair in Environmental Toxicology at USask

In a first-of-its-kind paper published Dec. 9 in Proceedings of the National Academy of Sciences, Giesy’s research team assembled and analyzed a comprehensive list of 362 commonly used liquid crystal monomers gathered from 10 different industries and examined each chemical for its potential toxicity.

The team also further tested the toxicity of monomers commonly found in six frequently used smartphone models.

The researchers found the specific monomers isolated from the smartphones were potentially hazardous to animals and the environment. In lab testing, the chemicals were found to have properties known to inhibit animals’ ability to digest nutrients and to disrupt the proper functioning of the gallbladder and thyroid–similar to dioxins and flame retardants which are known to cause toxic effects in humans and wildlife.

To understand how common these monomers are in the environment, researchers tested dust gathered from seven different buildings in China–a canteen, student dormitory, teaching building, hotel, personal residence, lab, and electronics repair facility. Nearly half of the 53 samples tested positive for the liquid crystal monomers.

“Ours is the first paper to list all of the liquid crystal monomers in use and assess their potential to be released and cause toxic effects,” said Giesy. “We looked at over 300 different chemicals and found that nearly 100 have significant potential to cause toxicity.”

Ninety per cent of the monomers tested had concerning chemical properties. They either accumulate in organisms, resist degradation in the environment, or are easily transported long distances in the atmosphere. Nearly one quarter of the chemicals tested had all three troubling characteristics.

“There are currently no standards for quantifying these chemicals, and no regulatory standards,” said Giesy. “We are at ground zero.”

Researchers Huijun Su, Shaobo Shi, Ming Zhu, and Guanyong Su of China’s Nanjing University of Science and Technology, along with Doug Crump and Robert Letcher of Environment and Climate Change Canada, worked with Giesy to conduct the research. Guanyong Su, who leads the research effort in China, was a former student with Giesy at USask and then a post-doctoral fellow with Environment Canada.

LCD panels are almost exclusively produced in three Asian countries: China, Japan, and South Korea. It’s estimated that 198 million square meters of liquid crystal display were produced last year–enough to cover the entire Caribbean island of Aruba.

“Since there are more and more of these devices being made, there’s a higher chance of them getting into the environment,” said Giesy.

For many years, huge amounts of globally produced e-waste–including LCD displays–have been dismantled, disposed of, and introduced into the environment.

“Right now, there are no measurements of these monomers in surface waters. Our next steps are to understand the fate and effect of these chemicals in the environment,” said Giesy.

In his previous work, Giesy was also the first researcher to identify that toxic perfluorinated and polyfluorinated chemicals were widespread in contaminating the environment. His research ultimately resulted in the entire class of chemicals being banned globally.

Source:

University of Saskatchewan

Journal reference:

Su, H., et al. (2019) Persistent, bioaccumulative, and toxic properties of liquid crystal monomers and their detection in indoor residential dust. Proceedings of the National Academy of Sciences. doi.org/10.1073/pnas.1915322116.

https://www.news-medical.net/news/20191210/Toxicologists-find-toxic-chemicals-from-LCDs-in-nearly-half-of-household-dust-samples.aspx

Transplant patient finds out his DNA has been replaced by that of his donor

A man who had a bone marrow transplant to treat acute myeloid leukemia later found out that the DNA in his blood and semen had been replaced by that of his donor.

Chris Long, who lives in Reno, Nevada had been urged to test his blood by a colleague working at the crime lab at the Washoe County Sheriff’s Department, where Long worked.

The colleague, Renee Romero, had suspected that Long’s blood DNA might change, given that the goal is to replace diseased blood with healthy blood, which would include the DNA it contains.

Romero also suspected that Long’s DNA may be affected elsewhere in his body and urged him to have DNA samples taken from various body parts before the procedure so they could be compared with samples taken afterward.

Four years after the procedure

Four years after the transplant had been carried out, the crime lab discovered that it was not only Long’s blood that contained his donor’s DNA. Samples taken from his lips and cheeks also did, and much to the team’s surprise, all of the DNA in his semen was his donor’s DNA.

I thought that it was pretty incredible that I can disappear, and someone else can appear.”

Chris Long

Long had become what is known as a chimera – a person who has two sets of DNA. Clinicians and forensic experts have long known that certain medical procedures can lead to genetic chimerism, but exactly where in the body a donor’s DNA appears – beyond blood – has rarely been studied in terms of potential criminal implications.

Tens of thousands of people receive bone marrow transplants every year, and although it is unlikely any of them would be involved in crime, the possibility that they could be has long interested Long’s colleagues at the sheriff’s department’s crime lab.

The potential implications for forensic analysts

When investigating a crime, forensic analysts generally assume that any evidence gathered at a crime scene pertaining to a single perpetrator would have a single identifying set of DNA, rather than two.

When Romero heard that Long would be undergoing a bone marrow transplant, she saw an opportunity to investigate and told him: “We need to swab the heck out of you before you have this procedure to see how this DNA takes over your body,” which Long agreed to.

Within four months of the procedure, Long’s blood had been replaced with his donor’s blood, and of all the samples collected from other parts of his body, only the DNA in his chest and head was still long’s own.

The crime lab experiment persisted, and surprisingly, the researchers found that four years following the procedure, the DNA in Long’s semen had been completely replaced by his donor’s.

“We were kind of shocked that Chris was no longer present at all,” said criminal investigator Darby Stienmetz.

Colleague Brittney Chilton points out that if another patient who responded similarly to a transplant went on to commit a crime, it could mislead investigators.

Indeed, Chilton had already learned of such cases when she started her research into chimerism.

The issue came to light in 2004 after DNA left at a crime scene in Alaska matched that of a convict. However, at the time of the crime, the convict was in prison. It emerged that he had received a bone marrow transplant from his brother, who was eventually arrested and convicted.

Confusion also arose in 2008, following a road traffic accident in Seoul. The man involved was found to have blood that contained female DNA, kidneys containing male DNA, and a spleen that contained a mixture of the two. It was later discovered that the man had received a bone marrow transplant from his daughter.

All the people involved in Long’s case agree that he is a living, breathing case of a chimera and that it is impossible to say how many other people respond to bone marrow transplants the same way he did.

A curious possibility that forensic analysts may want to consider

This represents a curious possibility that forensic analysts may want to consider in cases where DNA results are not seeming to add up.

As far as Long is concerned, he is hoping to meet his donor (who lives in Germany) during an upcoming trip to the country so he can thank him for saving his life.

Source:

The New York Times

https://www.news-medical.net/news/20191210/Transplant-patient-finds-out-his-DNA-has-been-replaced-by-that-of-his-donor.aspx

Bristol-Myers wins $752 million in U.S. patent case against Gilead

Bristol-Myers Squibb Co on Friday said it won a $752 million jury verdict against Gilead Sciences Inc in a U.S. patent dispute relating to technology for treating cancer.

A jury in Los Angeles awarded the damages after finding that Yescarta, a treatment sold by Gilead’s Kite Pharma unit, infringed on a patent exclusively licensed by Bristol-Myers’ Juno Therapeutics division.

The patent at issue in the lawsuit, which Juno licenses from the Memorial Sloan Kettering Cancer Center in New York, relates to CAR T-cell immunotherapy for cancer.

CAR-T therapy involves a process of removing T cells from a patient’s immune system, engineering them to better identify and attack cancer cells and infusing them back into the patient.

Bristol-Myers said in a statement that it was pleased with the verdict.

Gilead disagreed with the decision.

“We remain steadfast in our opinion that Sloan Kettering’s patent is not infringed and is invalid,” Gilead said in a statement. “Given that Kite independently developed Yescarta and assumed all of the risk in its discovery and development, we do not believe Sloan Kettering and Juno are entitled to any level of damages.”

Gilead said it expected to seek to undo the verdict through post-trial motions and an appeal.

https://www.reuters.com/article/us-bristol-myers-gilead-sciences-patent/bristol-myers-wins-752-million-in-u-s-patent-case-against-gilead-idUSKBN1YH2BS

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