Author: Jacob Goldstein

News that Anthem Blue Cross is raising premiums 39% for some people in California comes at a convenient time for Democrats looking to regain a little health-care-overhaul momentum.

So it’s no surprise that HHS Secretary Kathleen Sebelius sent a letter calling on the company to justify the rate increase. After WellPoint, Anthem’s parent company, responded with this letter, Sebelius released a skeptical statement that cited WellPoint’s fourth-quarter earnings of $2.7 billion.

The rate increase applies only to policies for people in the individual market. WellPoint’s letter says that, in the troubled economy, many people are choosing to go without health insurance. And many of those who are keeping their insurance are buying cheaper policies that offer less coverage.

The people who do tend to hold onto good insurance plans are those who need them most — people who are already sick. Of course, when you have healthy people bailing out of insurance plans and sick people hanging on, the average health-care cost per person in the plan is going to go way up — and that’s going to be reflected in rising premiums.

As the WSJ notes this morning, the insurance industry and the Obama administration actually agree on the solution to this problem: Require everyone to buy insurance. For their part, Republicans argue against such a mandate, saying that people should be allowed to choose whether or not to buy health insurance.

Photo: iStockphoto

Billy Tauzin — the former Louisiana congressman who stuck with the homespun phrases even as he pulled down $2 million a year to represent the drug industry in DC — is stepping down as the head of PhRMA, the big trade group.

The WSJ notes that he was criticized “for his support of the White House’s now-teetering plan to overhaul health care.”

Exhibit A is the letter John Boehner, the House Republican leader, sent last year to Tauzin, to complain about the $80 billion deal the drug industry struck with the Democrats. Boehner accused the industry of cutting a deal with a “bully.”

Late yesterday, PhRMA said Tauzin’s resignation is effective June 30, and a search for his successor will start immediately. The group’s statement included this quote from Tauzin:

In January 2005, after a full year successfully battling a killer cancer, I was given a second chance at life, and appropriately chose to commit my next five years to the life-saving work of the people whose miracle medicines had just saved my own For the past five years, I have given my all to that effort at PhRMA, and believe we have made a significant difference together.

Tauzin Flashback: Tauzin has a way with words. When the drug industry was coming under fire from Congress a few years ago, Tauzin got on a conference call with drug execs and told them: “Your house is on fire and you’re still smoking in bed.”

Photo: Associated Press

Bill Clinton was admitted to the hospital for chest pain today and had two stents placed in one of the arteries around his heart.

Here’s what that means:

A stent is a wire mesh tube that’s used to prop open an artery. That’s a stent in the picture.

Stents are often used for patients with unstable angina — sudden chest pain that can be a prelude to a heart attack.

In a typical procedure, doctors start by making a small incision in the patient’s groin, then threading a catheter through the incision and up into a clogged artery near the heart. Then they perform a procedure called angioplasty, using a tiny balloon to clear away plaque that’s clogging up the artery. Then the doctors run the stent through the catheter and into section of the artery that was just de-gunked.

The stent reduces the risk that the artery will re-close. Some stents are coated with a drug, to further reduce that risk.

There’s been a lot of discussion over the past few years about whether stents are overused, particularly for patients with chronic chest pain. For more on that subject see this front-page story from this morning’s WSJ.

Image via Bloomberg News

Now that it’s expanded health-insurance coverage to nearly all of its citizens, Massachusetts is trying to figure out what to do about the rapid rise of health costs.

The latest proposal comes from the state’s governor, Deval Patrick, who yesterday proposed a bill that would give the state the power to review — and, in some cases, reject — rate increases by doctors and hospitals.

Here’s a key paragraph from the bill:

Any contract under which provider payments increase by an amount in excess of the applicable Consumer Price Index for Medical Care Services shall be presumptively disapproved. The division may conduct a hearing on any contract that is presumptively disapproved and will approve or disapprove the contract based on its findings following the hearing.

The bill would also allow the state to prevent health-insurance plans sold to small businesses from raising premiums by more than 1.5 times the rate of medical inflation, and impose a two-year moratorium on lawmakers mandating new health benefits that plans must cover (those mandates drive up costs).

The Boston Globe said reaction “was mixed, with small business groups expressing cautious optimism, insurers saying the measures do not go far enough, and health care providers worrying that smaller hospitals could be disproportionately harmed and that some might have to lay off caregivers.”

Photo: iStockphoto

Here’s the Health Blog’s little corner of the Greek debt saga: The nation’s government-run hospitals owe about $9.5 billion to drug and device manufacturers, the Financial Times reports.

Senior European pharma execs are flying to Athens for talks, and the industry wants the European Commission to find that Greece has broken EU late-payment rules. A deal may be worked out to restructure the debt; a similar deal in 2004 included a significant discount, the FT says.

The government last year set aside 1.1 billion euros to pay hospital debts; Goldman Sachs cited that move in a note it sent out Wednesday, arguing that Greece may need to revise up figures for its 2009 estimate. The government refuted that allegation. (For details, see the WSJ’s Real Time Economics.)

Meanwhile, hospital docs were among those who participated in a strike yesterday to protest austerity measures the Greek government wants to put in place as part of the effort to control the deficit.

Map: iStockphoto

A few Boston Scientific-related news bites:

The company said it will cut 1,000 to 1,300 jobs over the next few years, as part of a restructuring program. That’s out of a work force of about 25,000. The company also reported earnings and gave new guidance; those figures are unpacked in this Dow Jones Newswires story.

Two brands of Boston Scientific defibrillators have a design flaw that can deliver potentially life-threatening shocks to the heart in rare cases, according to an article published in the journal HeartRhythm (subscription required). In a statement yesterday, the company took issue with the paper, and argued that “the overall rate of events for this device family compares very favorably to the performance of similar devices and is well within accepted performance ranges.” This WSJ article has all the details.

Also worth a read: A few years back, the big Courage study showed that stents were no better than drugs alone for certain patients with chest pain. Why didn’t that finding do much to change medical practice? This WSJ story explains.

Photo by CarbonNYC via Flickr

William Chin, Eli Lilly’s senior VP for discovery and clinical research, is going to take a newly created job at Harvard Medical School.

He’ll be the “executive dean for research.” It sounds like at least part of his job will be figuring out how Harvard researchers should interact with industry, as well as working to move research from the lab to the clinic. Here’s a key chunk of a letter posted online today by the med school’s senior dean:

One of Bill’s highest priorities will be to conceptualize and develop new research initiatives, such as the therapeutics discovery initiative, envisioned as a focused and innovative effort to bring together the enormous expertise of our community in order to find effective new ways for transforming the world’s most vital biomedical research into therapies that can directly improve human health. Bill will also develop a coherent strategy for the School’s scientific interactions with industry, ensuring it is both aligned with the HMS Faculty Policy on Conflicts of Interest and Commitment and is capable of advancing critical unmet needs.

Chin was a professor of medicine at Harvard before he joined Lilly in 1999, according to his bio on the company’s Web site. He also got his M.D. from Harvard did a residency in internal medicine at the Beth Israel Hospital and a fellowship in endocrinology and metabolism at Mass. General.

Update: Here’s a statement from Chin, which came to us via a Lilly spokeswoman: “At Lilly, I’ve had the privilege of helping to discover medicines that have helped or will help millions of patients. I’ve also had the chance to work with some of the finest people — in science and business — that I have ever known.”

Photo: Bloomberg News

Merck says it reached a proposed settlement on some Vioxx-related shareholder litigation.

This isn’t to be confused with the $4.85 billion megasettlement with people who claimed that they or their family members suffered after taking Vioxx.

It’s also separate from the $80 million Vioxx deal Merck cut with unions and insurers.

Nor is it connected to the Vioxx-related shareholder lawsuit that made its way to the Supreme Court last year. (We’re still waiting to hear back on from the Supremes on that one.)

So what is it? It’s a settlement to resolve shareholder derivative complaints, which shareholders file on behalf of the company, against the company’s own officers. Merck agreed to pay $12.5 million in legal fees, and take certain steps to bolster its monitoring of drug safety.

The company’s already done some of the things it agreed to do in the settlement, including appointing a chief medical officer. Merck didn’t admit liability or wrongful conduct as part of the settlement, a company spokesman told Dow Jones Newswires.

Photo: Associated Press

Look, we know we’ve been writing forever about looming Medicare pay cuts to doctors. So if you’re tired of the subject just stop reading here and scroll down to the next post.

If you’re still reading, you probably already know that Medicare payments to doctors are set to be cut by 21% on March 1.

But the jobs bill Harry Reid is putting together includes a “short-term patch” that would temporarily block the cuts, the WSJ reports. Just how long the patch would last was still being negotiated on Tuesday, the article says.

The bill is still in draft form and hasn’t been formally released; a draft posted by Politico calls for blocking the scheduled pay cuts through the end of September (see p. 107).

The calculus on this issue is always basically the same. There’s widespread political support for blocking scheduled pay cuts to doctors. But doing so is expensive. So rather than get rid of the formula that keeps calling for the cuts — which would require Congress to acknowledge that the country is going to be on the hook for billions of dollars in additional Medicare costs — Congress keeps passing these short-term patches.

Photo: Associated Press

Tomorrow’s mental illnesses went online today: The American Psychiatric Association posted a draft version of the DSM-V. Read it for yourself.

The DSM (full name: Diagnostic and Statistical Manual of Mental Disorders) is the book that defines mental illness in America, so it’s not surprising that revising the thing is a contentious process that takes years and involves lots of debate. (The “V” attached to the name is Roman — this will be the fifth edition, replacing the current DSM-IV.)

Among the changes proposed for DSM-V:

• A category called “substance-related disorders” would include not only drug and alcohol addiction but also gambling addiction, the WSJ notes. Other disorders, including “Internet addiction,” will be “considered as potential additions to this category as research data accumulate,” according to the description of the category.
• “Hypersexual disorder” would be added to the DSM. It would apply to people who repetitively engage in sexual “fantasies, urges and behavior” in response to anxiety, depression, stress or the like, and who repeatedly try and fail to control or significantly reduce the urges and behavior.
• Asperger’s disorder would be folded into the broader category of autism spectrum disorders. The vice chair of the DSM revision task force told the WSJ that there isn’t enough evidence to keep it as a separate diagnosis. The director of the Global and Regional Asperger Syndrome Partnership told NPR that he agrees with the reclassification, but added that “I personally am probably going to have a very hard time calling myself autistic.”

The draft revisions are open for public comment until April. After that, they’ll be field tested for a few years, before DSM-V is finally released in May, 2013, if everything goes according to plan.

Photo: Associated Press

Suppose a hypothetical drug cost $10 million, was likely to extend life by only a day or two and didn’t improve quality of life. Should insurance pay for the drug?

Probably not — it would increase the cost for everyone paying premiums, without doing much to help the sick. But where do you draw the line?

Real-world drugs are both cheaper and more helpful than our hypothetical example. Still, many new cancer drugs costs tens of thousands of dollars per patient and sometimes extend lives by only a few weeks or months on average.

This knotty issue came up again today in the U.K. The National Institute for Health and Clinical Excellence recommended against using Novartis’s Tasigna or Bristol-Myers Squibb’s Sprycel for patients who have chronic myeloid leukemia and are resistant to Novartis’s Gleevec.

The drugs cost somewhere around $50,000 per patient per year, and the evidence of their effectiveness is “very poor,” NICE said. Here’s a brief statement from the outfit; here’s a long, technical analysis that includes input from the companies.

“It would be heartening to hear that the pharmaceutical company manufacturers are prepared to share some of the very high cost of the drugs” the group’s public health director said in the statement.

Some drug makers have cut deals in the U.K. in the past few years. See, for example, what Roche did for its drug Tarceva, and how Pfizer gave away its Sutent.

More On Cancer Treatment: In the U.S., the insurer UnitedHealth is sending doctors reports assessing their treatment of cancer patients. Read more in today’s WSJ.

Image: iStockphoto

Doctors have a fair bit of freedom in deciding whether to take on a new patient. But once they do, ethics and state licensing rules limit the circumstances when they can drop the patient from their practice, the WSJ’s Melinda Beck explains in her column today.

“You cannot abandon!” a former AMA official wrote to Beck, explaining that a doctor needs to give a patient a chance to find another doctor before discontinuing treatment.

In general, docs can fire patients who consistently miss appointments or refuse to pay their bills. Chronically abusing the doctor or disrupting the practice or seeking drugs for recreational use are also grounds for dismissal.

But this sort of thing can be messy and complex in real life. So we want to hear from our doctor readers.

Health Blog Question of the Day: When do you fire a patient? And how do you tell the patient that he’s no longer welcome at your practice?

Image: iStockphoto

Statins’ global conquest continues. The class of cholesterol drugs already includes Pfizer’s megablockbuster Lipitor as well as simvastatin, the hugely popular generic that Merck sold under the brand name Zocor.

Now, AstraZeneca’s statin Crestor has crossed a new threshold: It’s the cholesterol drug for people who don’t have high cholesterol.

The FDA just expanded the drug’s approval to include reducing the risk of heart attack and stroke in people who meet all of the following criteria:

• Older than 50 for men, older than 60 for women
• Elevated high-sensitivity C-reactive protein level (we’ll explain this one in a minute)
• At least one additional cardiovascular risk factor (such as high blood pressure, smoking, or a family history early heart disease)

The approval is based on a big study called Jupiter, which found that the drug reduced the risk of serious heart problems in patients with normal cholesterol but high levels of something called C-reactive protein.

CRP is a marker of inflammation. As we’ve noted before, it hasn’t joined measures such as blood pressure and cholesterol as a reliable measure of cardiovascular risk.

So whether Crestor’s new indication leads to broader use of the drug will depend in part on how often doctors measure their patients’ CRP levels, and how often they act on what they find.

Photo by CarbonNYC via Flickr

Proxy season! Time, once again, to learn how much the captains of industry are pulling down.

First up for the Health Blog this year is Eli Lilly, which just filed its preliminary proxy.

John Lechleiter, the company’s CEO, had a package totaling $16.4 million, according to an analysis by Dow Jones Newswires. That includes $1.48 million in salary, $3.55 million in non-equity incentive plan compensation, $11.25 million in certain equity awards and $90,091 from a savings-plan match and tax reimbursements.

Lechleiter has requested that he not receive an increase in salary or bonus for 2010, “in light of the business challenges the company faces.”

The proxy’s summary compensation table, which uses a different methodology than Dow Jones, puts Lechleiter’s total compensation at $20.9 million. The table lists several other execs with multi-million-dollar compensation packages, including the CFO, the general counsel, the president of the company’s established markets unit and the doc who heads Lilly’s research labs.

Photo: Bloomberg News

To expand its business in emerging markets, Pfizer is taking a page out of the supermarket playbook: Offer a card that patients can present at the pharmacy to get a discount on their drugs. The card also allows the company to study patient behavior, and to remind patients to pick up their prescriptions. Here’s the story from the Financial Times.

People paying out of pocket tend account for bigger chunk of the patient population in many emerging markets, so offering discounts may be particularly compelling. At the same time, the FT notes, the cards may raise concerns in some quarters by giving a drug company information about the habits of individual patients.

Pfizer’s had an “eCard” program in the Philippines for several years, where more than two million patients are now in the system, and the company is looking to launch in key emerging markets such as Russia, Mexico and Brazil.

The company typically uses the program for drugs that patients take for chronic conditions such as high blood pressure and high cholesterol. The adherence rate for one blood pressure medicine more than doubled when patients used the card, the FT says.

Pfizer Bonus: Like many drug makers, Pfizer’s making a big push to grow in emerging markets. Here’s a WSJ story on the company’s strategy in Venezuela, and here’s a recent post on Pfizer’s approach to China.

Photo: Associated Press

Like plenty of other states, Tennessee is strapped for cash and looking for ways to save money. Cuts are likely for TennCare, the state’s Medicaid managed care program.

But the state’s hospitals may ask to pay more taxes in order to stave off cuts to the program, the Tennessean reports.

Because Medicaid is jointly funded by states and the federal government, cuts at the state level can trigger cuts in federal matching funds. In the case of Tennessee, proposed cuts would save the state $380 million but could cost the state two to three times that much in federal aid, according to the article.

What’s more, if the cuts to the program drive up the number of people in Tennessee without insurance, hospitals could be on the hook for more unpaid bills. So the state’s hospitals may decide that it’s actually in their financial self interest to pay higher taxes to block some TennCare cuts, because a big chunk of federal Medicaid funds will through to hospitals.

The Tennessee Hospital Association’s board of directors will meet today to discuss the subject, the article says. The tax would be levied on hospital revenues; it’s unclear what the rate would be.

Photo: iStockphoto

Hard to believe, but it was just weeks ago that everybody was busy hashing out the last-minute nitty gritty of what the Dems’ final health-care bill would look like.

Now, in a 59-41 world, President Obama’s call for a televised bipartisan discussion of health care — a proposal that’s reasonable enough, but pretty dull and process-y — passes for big news on the health-care overhaul front.

Indeed, as the WSJ notes, “it’s unclear how the bipartisan health-care event will move the issue ahead in Congress, as the parties have very different ideas about how to reshape the system … .”

Obama made the suggestion in an interview with Katie Couric broadcast yesterday before the Super Bowl.

In a statement, House Republican Leader John Boehner said, “Obviously, I am pleased that the White House finally seems interested in a real, bipartisan conversation on health care.”

Boehner criticized the House and Senate health-care bills and called on Dems to start over. A White House aide told the WSJ the president doesn’t intend to start from scratch.

Some time ago, 20 obese men traveled by cogwheel train and cable car to the awesomely named Umwelt Forschungsstation Schneefernerhaus, a research station (pictured) in the shadow of Germany’s highest mountain.

The men were the subjects of a study on altitude and weight loss. They were allowed to eat whatever they wanted during their week on the mountain, and their activity was restricted to slow walks through the research station.

They lost about three pounds during the week, on average. Four weeks after they went back home to the lowlands, they had kept most of the weight off. The study was published this week in the journal Obesity.

Of course, it’s hard to say anything definite when you have a 20-person study with no control group. Still, the researchers do have some interesting ideas about what the study, taken in the context of previous research, suggests.

During their time on the mountain, the men in the study ate less, their baseline metabolic rate went up and their levels of a hormone called leptin increased.

Some previous research has shown that metabolism gets faster at high altitude, though it’s not clear why. That alone would tend to make you lose weight, all other things being equal. What’s more, the rise in leptin — a hormone that plays a role in appetite — may have prompted the men to eat less, the authors say. Previous studies have suggested that the thin air at high altitude may prompt the body to crank out more leptin.

Photo via Umwelt Forschungsstation Schneefernerhaus

One obvious (if somewhat fraught) way to keep health-insurance premiums down is to cap how much a plan will pay for health care. That’s an approach Washington state is considering.

The state has asked insurers to submit bids for a program that would include coinsurance payments of 30% for inpatient treatment, and pay out a maximum of $75,000 a year, the Puget Sound Business Journal reports. That may sound like a lot, but people who are really sick or seriously injured can easily run up far higher costs.

Current state regulations don’t allow insurers to sell policies like this, the article says.

A few years back, Tennessee put in place a somewhat similar plan with an even lower annual cap ($25,000). As of 2007, the premium was about $150 a month.

Washington and several other states are struggling to maintain existing health-insurance plans for low-income people who don’t qualify for Medicaid, USAToday reported earlier this week. A program in the state that covers about 65,000 people will close later this year unless lawmakers come up with $160 million in new funding, the article said.

Photo: iStockphoto

A bunch of the blockbuster drugs that carried the drug industry for the past decade are about to go off patent. As we’ve noted along with everybody else, that’s going to be tough for pharma companies.

(See, for example, the news this week from Pfizer and Bristol-Myers Squibb, which over the next two years will face generic competition on the two biggest drugs in the world, Lipitor and Plavix.)

Generic manufacturers are obvious beneficiaries here. But pharmacies will also profit. Although generic drugs are far cheaper than their branded equivalents, pharmacies make higher margins from generics.

What’s more, the market may be undervaluing the gain CVS and Walgreen are likely to see from the wave of new generics, according to money managers quoted in a Bloomberg News story out today.

The CFOs of both companies were, predictably, cautious about getting into the specifics of how much they’d benefit.

“It will definitely help us, but to that magnitude, considering there are other things that play in, I would hesitate to give any guidance,” Walgreen’s CFO told Bloomberg. “There are lots of moving parts in this business and different people factor them in different ways.”

Photo by puroticorico via Flickr