Family inHome Caregiving Blog
The U.S. Supreme Court is in the process of making a number of important decisions, and one which impacts us all was issued yesterday. In a 5:3 decision, the court ruled that the government must apply a "rule of reason" when analyzing whether generic drugs can be kept off of the market by having the name-brand drug maker pay money to competitors in order to not make a generic version. This was a partial victory for big pharmaceutical companies because in the case nicknamed "pay-for-delay," the Federal Trade Commission (FTC, who sued Actavis) was looking to have these deals made illegal. Writing the opinion for the court was Justice Stephen Breyer, who said that these transactions, "simply keeps prices high at patentee-set levels…while dividing that return between the challenged patentee and the patent challenger. The patentee and the challenger gain. The consumer loses." Although not declaring the deals illegal, he did throw the ball back into the lower court, which presumably will stop some of these deals from happening. The Chairwoman of the FTC, Edith Ramirez, told The Wall Street Journal, "the court has taken a big step toward addressing a problem that has cost American's $3.5 billion a year in higher drug prices." Hopefully consumers will win following this ruling, although it will take time for the lower courts to decide how to apply the Supreme Court opinion.
I've written many times on my blog about unfortunate cases of financial elder abuse on the Monterey Peninsula, some of which have resulted in seniors being fleeced out of millions of dollars and even losing their homes. I was happy to see an article in the New York Times which talked about the Justice Department (DOJ) coming down hard on banks which don't alert seniors of potential fraud before they lose their money. With all of the great technology we have, it should be simple to flag what is called mass market fraud, a system where criminals come up with a simple scheme to trick you into giving you their banking information and then withdraw money from your account. One of these is being done by people who call seniors posing as an employee of Medicare and asks them for their bank routing number and account number. The new theme at the DOJ comes as welcome news after two banks, Zions Bank of Salt Lake City and First Bank of Delaware, were sued for enabling crooks to fleece the elderly victims (First Bank reached a $15 million settlement with the Justice Department). The banks should have known better. One executive back in 2007 told colleagues that return rates (when customers dispute their credit card charges) were more than 50% for one merchant, about 40x the industry standard. The red flags he raised were ignored because the bank was making so much money in fees off of the account. That blatant disregard for the customer is the reason the settlement with the Justice Department was so high. In the case of First Bank of Delaware, the situation was similar, with the return rates about 80% on some merchants. Court records show that the lawsuit claims the bank stayed willfully blind to the fact that merchants were illegally taking money from customers, and that a disproportionate number of them were seniors which were taken advantage of through deceit, fraud and trickery. The safest thing to do is never, ever give any personal information such as bank or credit card numbers, date of birth, etc. to someone who has called you on the phone. You never know if the person that you are dealing with is who she or he says they are, and it's better to be safe than sorry. In addition, use a credit card that you know will support you if something is charged on your account which you didn't authorize. I have one credit card which made me jump through hoops to dispute a charge (I had to sign an affidavit and have it notarized, which cost $10 for each transaction), and I stopped using it after that experience. I use another credit card that I have had for more than 10 years and anytime I dispute the charge they reverse it without any problem.
AARP, The Magazine, had an interesting story in its most recent issue about safety in hospitals. It's estimated that 6,000 times per year what is called a "never event" happens, according to the U.S. Department of Health and Human Services (HHS). This is a horrible accident that should have never happened in the first place, such as accidentally amputating the wrong limb or leaving medical equipment inside of someone's body and then sewing it inside. Although 6,000 does not seem like a lot, it sure would if you were on the receiving end. The number of preventable errors is many multiples of this. The HHS estimates that a whopping 180,000 Medicare beneficiaries die each year due to preventable accidents and errors caused by hospitals. The AARP developed a hospital safety score in conjunction with a nonprofit called Leapfrog. Thankfully, none of our local hospitals were on the list of worst hospitals, although none of them were on the list of the safest hospitals either. AARP said that there are a number of measures being implemented by hospitals to eliminate errors including:
. Forcing doctors to do electronic prescriptions so that drug interactions can be checked (there are about 400,000 drug-related injuries in hospitals each year, according to a study done by the Institute of Medicine). Patients are also given a bar-coded bracelet which is scanned prior to administering medicine to ensure the right patient is being treated;
. Putting a hand washing station in every room to prevent infections;
. Installing hand bars on all sides of the bathroom to ensure patient safety;
. Installing bed alarms to make sure hospital staff knows when patients are getting out of bed;
. Installing vents which suck the air out of the room, filter it and then release it from the building; and
. Replacing frequently touched surfaces like IV poles, bed rails and faucets with germ-resistant copper alloys.
I applaud these efforts. Going to the hospital is traumatic enough without compounding the problem with potential errors from hospital staff.
The government is looking in every nook and cranny to try and save money going out of the Social Security and Medicare funds, and I applaud their efforts to fight crime. The Department of Health and Human Services provided a public report recently that showed they pulled eligibility from almost 15,000 suppliers over the last two years, about 2.5x the number it did in the previous years. "There has been a special focus under the Affordable Care Act," Peter Budetti, the deputy administrator for program integrity at the Center for Medicare Services told USA Today. The government is proposing new rules whereby those reporting fraud can be paid up to almost $10 million in reward money. The current limit for tips is only $10,000. This is great news. If we can uncover enough fraud, hopefully there won't be any more cutbacks in Medicare benefits.
Drug companies have made massive sums of money when drugs go generic and they are able to enter a new market. But now these generic drug makers are trying to go after an even bigger market, selling name-brand drugs. The reason is that the generic drug sales market is very competitive, causing price pressure. According to an article in the Wall Street Journal, generic drug makers have never had profit margins like big pharmaceutical companies selling branded drugs. In addition, because of the price-pressure on generic drugs, generic drug sales are expected to decline over the next several years and profits are expected to drop 67% from last year's peak by 2015 (according to Sanford Bernstein projections). This is due in part to Congress revamping the generic drug law ten years ago to allow multiple generic drug companies to sell a product once the patent ran out on the name brand drug. The good news is, the price for consumers on many generic drugs is dropping, and seniors have benefitted as Medicare has lowered the co-pay on some generics.
The U. S. Supreme Court unveiled a landmark ruling yesterday, with the justices unanimously agreeing that human genes cannot be patented. The fact that a unanimous ruling can come out of the Supreme Court seems to be groundbreaking given all of the recent split decisions. The ruling is a big blow to biotech and large pharmaceutical companies and a victory for the research community which has argued that allowing these patents thwarts research efforts. Myriad Genetics had patented two genes called BRCA1 and BRCA2 which can cause breast or ovarian cancers when mutations occurred. This discovery was great news for women that wanted to get tested and jumped into the headlines when Angelina Jolie tested positive for the mutation and decided to have both breasts removed which reduced her risk of getting breast cancer from 95% to just 5%. Her mother died from ovarian cancer and her maternal grandmother had the disease as well. The gene patents allowed the company to have monopoly pricing on the test (it cost $3,340 and earned the company almost $400 million last year). Another company, DNATraits, announced shortly after the ruling that they would offer the same test for $995. The patenting of DNA did make it difficult for researchers to do projects based on these genes, so many in the research community are ecstatic about the decision. The Supreme Court ruling has broad ramifications. It's possible that a whopping 4,000 genes which have been patented could be revoked. They measure a wide range of diseases, and included your likelihood to get anything from birth defects for pregnant women to the likelihood of having a heart attack or stroke. The good news is, it's likely that more people will be able to afford genetic testing and it is a giant leap forward in research involving human DNA. It is also likely to move "personal medication" forward. This is the process of developing different treatment therapies for people who have developed cancer or some other devastating disease. The treatment plan will revolve around that person's DNA and what drugs have worked best for people with a similar genetic makeup.
A study which was just published in the New England Journal of Medicine, funded by the Department of Veterans Affairs, found that a popular drug used to treat rheumatoid arthritis is no more effective than cheaper generic therapies. This will be a huge blow for Amgen, the maker of the drug called Enbrel which generated more than $4 billion in sales last year. The disease is difficult to treat and many patients are non-responsive to a number of drugs and put on Enbrel, which is very expensive. The government is looking at many expensive drugs to see if their price is justified, and this one just happened to fall into the crosshairs. Methotrexgate is currently the most common drug to put people with rheumatoid arthritis on. Unfortunately, many don't respond to the drug and physicians will try anything to relieve them of their pain. Data from the study found that putting patients on a combination of three generic drugs was statistically equivalent to giving them Enbrel at a cost reduction of $24,000/year. I understand the government's view, however, I do hope that the result of cost cutting doesn't result in choices being taken away from many physicians and their patients. This disease is very painful and not every drug reacts on everyone in the same way, particularly in the case of Enbrel. It's part of a class of drugs which are called biologic medications because they are made from living organisms, which is why they are so expensive.
There are a lot of things that people hate about being in the hospital. However, I was surprised to read that the most frequent complaint patients have is about noise. With health care reform (the Affordable Care Act) forcing hospitals to do frequent customer service surveys and getting dinged financially if they aren't good, there is a lot of focus these days on improving customer service. A Wall Street Journal article yesterday said that hospitals are doing things like replacing paging systems with wireless headsets, allowing patients to shut their doors and put up Do Not Disturb Signs as well as installing ambient white noise machines. Some are also retrofitting the rooms with sound absorbing ceiling tiles and carpets. I am glad to hear that and I hope this trend continues. It's not just an annoyance, according to survey data from a consulting firm called Making Hospitals Quiet, 77% of nurses say that sound quality directly impacts how well patients recover. A survey done by Medicare in June of 2012 found that only 60% of patients said the area outside their room was quiet at night. That's the lowest satisfaction score out of all 27 questions in the survey. Clearly, getting a good night's sleep is important to a patient's recovery, so hospitals must do something to correct this problem.
The federal government continues to struggle with how to cut costs from the Medicare program without reducing benefits. The government received disturbing news recently when a new study found that lab tests were being reimbursed by Medicare in many instances at a higher rate than private insurance companies were paying. The report, which is expected to be released tomorrow by the Department of Health & Human Services (HHS), will show that Medicare paid $910 million more than it should have on lab tests alone in 2011, assuming it could have negotiated rates at the lowest rate private insurance companies have negotiated. In fact, the study of 20 of the most common lab tests found that Medicare paid 18-44% more than Medicaid plans or private insurance plans. I think the comparison to Medicaid (called Medi-Cal in California) is not valid because many medical facilities and physicians don't accept it because reimbursement rates are so low. I do believe, however, that Medicare shouldn't be paying more than private insurance plans and I hope this report serves as a wake up call to get HHS to look at negotiating lower lab test reimbursement rates. As just one example, a blood test for iron levels was reimbursed by Medicare at $12.30 while a private insurance company paid only $7.51 for it.
A diabetes drug which had been almost completely pulled off the market by the Food & Drug Administration (FDA) called Avandia has been given a new chance. A FDA panel of experts voted to ease restrictions on the drug, after having an outside party (Duke University) analyze data on previous studies which had done on patients on the drug. Duke found that there was no increase in heart attacks for Avandia patients, which was the reason the FDA had originally curbed sales of the drug, limiting prescriptions to certified doctors which would state that their patients had tried and failed other diabetes treatments. It wasn't a complete vote of confidence in the drug, however. "There remains considerable uncertainty, but I do favor loosening the restrictions, Erica Brittain told the Wall Street Journal. She is a statistician for the National Institutes of Health and was on the panel of experts at the FDA which voted to loosen restrictions on Avanda. Although this does give those with diabetes another treatment option, there are still a lot of questions about the drug so you should consider this carefully and discuss the pros and cons with your physician prior to going onto the drug.