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CMS lost out on $2.8 million in savings
Plus a sneak peak at next week's podcast
Good morning and happy Friday, January 6, 2023.
I hope everyone had a good holiday and a new year. Now that we have regrouped in 2023 and found that we all still have pulses, let’s take a look at what’s happening.
CMS loses out on savings
The Office of the Inspector General (OIG) found in two reports this week that the Centers for Medicare and Medicaid Services (CMS) failed to manually check their analysis on average sales prices for drugs. Because of this, the OIG says CMS lost $2.8 million in savings. Drug companies are required to submit average sales price reports every quarter to CMS; sometimes those reports may have a negative number or zero which is acceptable when there are no sales to report. The OIG, however, found that CMS was not including those zero or negative numbers causing them to not accurately implement price reductions. Read more in the Hill.
J&J moving closer to spinoff
Johnson&Johnson (JNJ 0.00%↑) moved closer to spinning off some of its products into separate companies this week when it filed for an initial public offering (IPO) with the US Securities and Exchange Commission. The new company will be called Kenvue Inc. and will house J&J’s household healthcare brands such as Tylenol, Neutrogena, Listerine, and Nicorrette. The proposed terms of the share sale will be disclosed in a later filing. According to the filing, proceeds from the share sale will go to J&J and J&J will still control Kenvue after it’s public. Read more from Bloomberg.
FDA greenlights mifepristone to be sold in brick-and-mortar pharmacies
Accompanying that decision Walgreens (WBA 0.00%↑) and CVS (CVS 0.00%↑ ) have announced they will be stocking the abortion drug in their pharmacies. The Food and Drug Administration reversed a rule that had barred pharmacies from dispensing the medication. Previously, women with a prescription could only receive it through mail-order pharmacies. The rule change also comes as the Justice Department notified the US Postal Service that it can continue to deliver the abortion medication through the mail, including in states where prescribing the medication is illegal. The change is in line with Biden Administration policy goals but marks a shift in FDA reasoning. In November, the drug regulator was concerned about the amount of mifepristone being prescribed to women prior to them becoming pregnant; mifepristone is not approved for advance provision of a medical abortion. Whether or not its wide availability at brick-and-mortar pharmacies will cause a spike in prescriptions, including in advance of pregnancies, remains to be seen. Read more in CBS News.
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What to do about medical debt and lucrative orphan drugs?
This week on the FLATLINING Podcast, Ron and I put our thinking caps on and discussed how to reform the lucrative orphan drug market. Drug companies make extremely high amounts of money and essentially triple dip into profits through their research and development, prescription, and coverage by Medicare and Medicaid. While we think that companies ought to be able to make some money on their profits, the way orphan drugs are paid for raises some eyebrows. It is obvious, the Orphan Drug Act has (or perhaps created) some accidental loopholes.
Additionally, medical debt was back in the news this week. Kaiser Health News published an investigative piece that was heavily critical of hospitals that go after patients for their outstanding debts to their institutions. They appeared to approve of large institutions in Los Angeles, New Orleans, and other places for deciding to no longer take legal action on or report to credit agencies the medical debt of their patients. What KHN failed to report, however, is that medical debt is particularly harmful to mid-sized and rural hospitals. While one person’s $10,000 bill may not materially effect a hospital’s bottom line, fifty person’s bills will. That wasn’t taken into account in the article.
Ron and I shared our thoughts and analysis on both topics. You can check it out wherever you listen to podcasts.
You can also join the discussion on our chat which is available in the free Substack app.
What does the NC state health plan change mean for your practice?
It was announced this week that the State of North Carolina is switching from BlueCross and BlueShield of North Carolina to Aetna for its state employees. BCBS NC announced they would be suing the state of NC. It is just another episode in a long-running feud between state treasurer Dale Folwell and BCBS NC. Check out next week’s episode of the FLATLINING Podcast for a detailed timeline of this saga and what the switch to Aetna (if it happens) means for your practice.
Supposedly, Ukraine and Russia are in the middle of a brief cease-fire for Orthodox Christmas, which is on 7 January. The temporary truce was declared by the Kremlin, but as Radio Free Europe/Radio Liberty reports it is unclear whether it is abiding by it. Ukrainian officials in Kramatorsk reported shelling and the Russian government-run news agency TASS is claiming Ukrainian forces shelled Donetsk “exactly at noon.” None of these reports have been verified. Read more from Radio Free Europe/Radio Liberty.
On a separate but related note, some have called Radio Free Europe a relic of the Cold War and that Congress should stop funding the organization. 60 Minutes reported last Sunday that their reporting may be more important now, more than ever. Here is a clip:
Finally today, the US Department of Agriculture (USDA) has granted a conditional license to the first vaccine for honeybees. The vaccine is developed by US biotech company Dalan Animal Health. The vaccine is intended to protect honeybees from American foulbrood disease, a deadly bacterium that can destroy hives. The vaccine is incorporated into the royal jelly by the worker bees, who then feed it to the queen. Once she ingests it, the vaccine is transferred to the larvae who are hatched with immunity. Read more in Axios.
No word yet on how conservative or blue-collar worker bees are responding to the news of an effective vaccine.
Have a good weekend.