Friday, February 05, 2010

Quote of the Day:

HEALTH REFORM

OBAMA: Presents Strategy for Passing Health Reform President Obama on Thursday at a Democratic National Committee fundraising reception in New York City presented his most clear-cut strategy to date for passing health reform, the New York Times' "Prescriptions" reports. Obama said that after lawmakers work out the differences between the House and Senate reform bills (HR 3962, HR 3590), he wants to meet publicly with Democrats, Republicans and independent experts to consider the measures and clarify particular reform provisions for U.S. residents. Obama said lawmakers and the independent experts would then hold a debate on the overhaul proposals before Congress decides whether to pass a reform bill. Obama also said he wants to work through the proposals "in a methodical way, so that the American people can see and compare what makes most sense." He added, "And it may be that if Congress decides ... we're not going to do it, even after all the facts are laid out, all the options are clear, then the American people can make a judgment as to whether this Congress has done the right thing for them or not." Obama pledged to refute false statements and misunderstandings about reform proposals throughout the debate, as well as to always consider alternate ideas from Republicans (Herszenhorn, "Prescriptions," New York Times, 2/5). He also said that lawmakers should "take [their] time" in evaluating a final bill (AP/San Francisco Chronicle, 2/4). Obama Encourages 'Discouraged' Democrats Obama at the reception also admitted to several setbacks during his first year in office but asked Democrats to remain focused on the party's legislative goals, including health reform, the AP/San Francisco Chronicle reports. He said, "I know some of you might feel discouraged because changing the ways of Washington is hard. ... Don't give up" (Elliott, AP/San Francisco Chronicle, 2/4). Biden Says Obama Will Meet With GOP on Reform Vice President Biden on Thursday said the Obama administration will meet with Republicans in the coming days to discuss GOP reform proposals. Biden said, "Look, the president meant what he said in the State of the Union that he's open to suggestions. ... I'm confident that the president is going to invite the Republican leadership to come down and sit with us and have a serious discussion like, 'OK, guys, what do you want?'" (Rushing, The Hill, 2/4). Pelosi, Hoyer Mum on Reform Progress House Speaker Nancy Pelosi (D-Calif.) and House Majority Leader Steny Hoyer (D-Md.) did not report any progress on reform efforts after meeting with Obama at the White House on Thursday. When asked if Obama would favor using budget reconciliation to secure an overhaul, Pelosi said, "Why don't you ask him? I never really speak for him, as a matter of fact." Both Hoyer and Pelosi noted that the discussion mostly focused on job creation (Frates, "Live Pulse," Politico, 2/5). -- compiled by Matthew Wayt

ROUNDUP: Progressives To Discuss Reviving Public Option; Landrieu Defends Medicaid Deal Progressive House and Senate Democrats are scheduled to meet on Tuesday to discuss possible options for restoring a public option in health reform legislation. The pharmaceutical industry faces many uncertainties now that health reform legislation is stalled. Sen. Mary Landrieu (D-La.) defends Louisiana's Medicaid deal in the Senate health reform bill (HR 3590). Sen. Al Franken (D-Minn.): Franken on Wednesday, during a private meeting of Senate Democrats with White House senior adviser David Axelrod and other Democratic officials and strategists, expressed frustration with the Obama administration's failure to provide guidance on health reform legislation, Politico reports. According to sources present at the meeting, Franken directed most of his criticism and displeasure at Axelrod (Raju/Barr, Politico, 2/4). GlaxoSmithKline: GSK CEO Andrew Witty recently said that comprehensive health reform legislation likely will not pass until 2011 because of continuing uncertainty, the Wall Street Journal reports. Witty said that reforms need to "tackle the value of consumption" of health care services and make sure that quality matches cost, noting that drugs should have to prove that they provide good value for the money spent. "I don't want to be in a business or an industry that's perceived as not giving value for money," he said, adding that comparative effectiveness research should be conducted to determine what treatments are most beneficial (Whalen, Wall Street Journal, 2/4). Sen. Mary Landrieu (D-La.): Landrieu on Thursday took to the Senate floor in an effort to defend the so-called "Louisiana Purchase" provision in the Senate's health reform bill, which would provide her home state with $300 million in additional Medicaid funding, Roll Call reports. Landrieu said that recent suggestions that the provision was added to the bill to secure her vote were untrue and insisted that the provision was not a secret deal that she forged with the Democratic leadership. She added that the provision was developed in public through the lobbying efforts of the entire Louisiana congressional delegation and Gov. Bobby Jindal (R) (Drucker, Roll Call, 2/4). In response to Landrieu's statements, Jindal reiterated that although he supports efforts to fix problems with Medicaid, he does not support the Democrats' proposals for health reform and called for "honest debates" on the legislation (Budoff Brown, "Live Pulse," Politico, 2/4). Public plan: Progressive lawmakers in the House and Senate are scheduled to meet on Tuesday to plan a strategy for reviving a public option in the debate over health reform legislation, CongressDaily reports. Rep. Raul Grijalva (D-Ariz.), co-chair of the Congressional Progressive Caucus, said, "The game plan is to say, 'Look, don't bury the public option yet,'" adding, "We support it, and we think it needs to be part of any and all discussions." According to Grijalva, the lawmakers might include a public plan in a reconciliation package or bring it up as its own piece of legislation and force a filibuster (Edney, CongressDaily, 2/5). Rx industry: As comprehensive health reform legislation stalls, drugmakers are increasingly concerned over the effect piecemeal reform legislation could have on their industry, the New York Times reports. For example, President Obama's proposal for a new tax on profits from some patents and other intangible assets in overseas tax havens is likely to affect the pharmaceutical industry. According to the Times, drugmakers will be forced to adjust more quickly to legislation, as opposed to the "carefully mapped future" they had under the original reform bills (Wilson, New York Times, 2/5). -- compiled by Julia Moss and Santosh Rao

REGULATORY NEWS

FDA: To Implement Computer-Based Risk Assessment Program for Food, Drug Imports FDA Commissioner Margaret Hamburg on Thursday announced plans to implement a new computer-based monitoring system for imported food and drugs, Reuters reports. The computer-based "Predict" program, which has been tested in Los Angeles, uses a scoring system that determines the risk level of the imported products. The program is part of the agency's latest efforts to identify risky or contaminated products before they reach consumers (Richwine, Reuters, 2/4). According to the AP/Miami Herald, items brought into the U.S. under the current system are inspected at random, which means fewer than 1% of the items typically are inspected. However, under the new system, shipments would be flagged for additional screening on a score that is based on their country of origin, manufacturers' safety records, and their contents (AP/Miami Herald, 2/4). Hamburg said that the program would enable border inspectors to seek out products that pose the greatest risk but that the agency only would be able to check "a small percentage" of the shipments that arrive at U.S. ports annually. This year, about 20 million shipments of food, medicine, medical devices and cosmetic products are expected to arrive at ports nationwide, compared with six million 10 years ago, according to Hamburg. However, Hamburg said FDA would now be using "better intelligence" to determine which items to check. The program is scheduled to first be implemented in New York, Hamburg said. George Strait, an agency spokesperson, said FDA plans to have the monitoring system in place at all U.S. ports by early summer (Reuters, 2/4). -- compiled by Santosh Rao

FDA: Requests Marketing Information for Candy-Like Tobacco Products FDA officials have requested marketing and research information from two companies that produce powdered "smokeless" tobacco products, Reuters reports. In a Feb. 1 letter to R.J. Reynolds Tobacco Company and Star Scientific, FDA officials said they were concerned that the brightly colored, flavored products could appeal to teenagers and children, and that the products could lead to nicotine addiction and cause health problems because of nicotine ingestion. The companies have said that the products are intended for adults who are quitting smoking, or for smokers who face a growing number of public smoking bans, Reuters reports. FDA's letter acknowledged that the products are targeted for adults, but requested that both companies submit extensive information on research and marketing practices for the products, which include dissolvable tablets. The companies have two months to respond to FDA's request (Heavey, Reuters, 2/3). -- compiled by Brittany Hackett

TRENDS & TIMELINES

MEDICAL MALPRACTICE: Illinois Supreme Court Rules Pain-and-Suffering Damages Unconstitutional The Illinois Supreme Court on Thursday declared caps on pain-and-suffering damages in medical malpractice trials unconstitutional, the Wall Street Journal reports. The court struck down a 2005 state law intended to address the rising costs of medical liability insurance by limiting damages at $500,000 for physicians and $1 million for hospitals. The court ruled that the law infringes on the state constitution's separation of powers by impeding on the judiciary's ability to set appropriate damage levels in cases. The decision drew criticism from business, physician and hospital groups that support medical malpractice reform as a way to curb escalating health costs. Attorneys groups praised the decision. The case in question was filed by an Illinois woman whose daughter was born with cerebral palsy and other impairments in 2005. The woman alleged that her daughter's health issues were caused by negligence on the part of Gottlieb Memorial Hospital and a doctor and nurse working there. The attorney representing the woman, Jeffrey Goldberg, said his clients now have a chance to recover higher damages when their case is tried. National Trend? The case is "part of a national trend by the plaintiffs' bar to challenge damage caps," according to Mark Behrens, a defense lawyer who tracks national liability trends. State supreme courts in Georgia, Kansas and Missouri currently are assessing the constitutionality of their states' caps, while other state supreme courts have upheld damage caps. Behrens said that other courts may cite the ruling in opposing damage caps, but added, "I doubt it will change many minds" (Koppel, Wall Street Journal, 2/4). Editorial The ruling is "a disastrous decision" that eliminates a "sound law passed ... to protect health care" in Illinois, according to a Chicago Tribune editorial. In passing the original law, "[t]he Legislature acted appropriately in response to a crisis" to curb "skyrocketing" malpractice costs in the state. The law's passage "eased the crisis," lowered malpractice premiums and slowed "[t]he exodus of doctors" driven out of Illinois by the high cost of malpractice premiums. The editorial concludes, "As a result [of this ruling], the doctors and hospitals and patients in Illinois will almost certainly face new risks" (Chicago Tribune, 2/4). -- compiled by Zach Swiss

INSIDE THE INDUSTRY

MEDTRONIC: Company's Defibrillator Leads More Prone to Fracture Than Previously Reported, Some Studies Show Some hospitals' studies show higher rates of fracturing in Medtronic's Sprint Fidelis internally implanted defibrillator wires than the company publicly disclosed, the Wall Street Journal reports. Medtronic pulled the wires -- known as leads -- from the market in 2007 but roughly 150,000 remain implanted in U.S. patients. Medtronic and many physicians typically urge patients not to have the wires surgically removed and replaced for fear of complications. According to Medtronic research, Sprint Fidelis leads last for three years 95.4% of the time and malfunction 4.6% of the time. If the wires fracture, which can prove fatal, they can fail to deliver a potentially lifesaving shock to a patient who experiences a faulty heart rhythm, or they can produce too many jolts, which also can be fatal. Other studies by hospitals and universities have shown higher malfunction rates: A report from the Minneapolis Heart Institute and the Mayo Clinic published in the journal HeartRhythm in February 2009 found a three-year failure rate of 12.1% among 848 Fidelis leads. A study by the University of Ottawa Heart Institute published in HeartRhythm in October 2009 determined that fracturing of the leads "increased significantly with time." A November 2009 study by the Mayo Clinic found a discrepancy in two-year fracture rates based on patient age. Among 89 patients younger than age 50, the failure rate was 20.4%, while 362 patients older than age 50 had a two-year failure rate of 3.5%. A study by the University of Rochester -- conducted by some researchers who received consulting fees or research grants from Medtronic and competing device manufacturers -- found that the three-year survival rate for 426 Medtronic leads was 90.8% with a failure rate of 9.2%. The study was published in January's American Journal of Cardiology. Medtronic dismissed some of the studies claiming they contained too small a sample size. The company reaffirmed the accuracy of its own data, which it said came from multiple hospitals. The medical director of Medtronic's cardiac rhythm division, David Steinhaus, described the company's data as "very robust" and "as accurate as any data out there." In a March 2009 statement, Medtronic acknowledged that it had identified 13 fatalities in which their leads "may have been a possible or likely contributing factor." The Journal found an additional 12 deaths since March 2009 in an FDA database that allegedly were linked to faulty leads. A spokesperson for Medtronic said the company had not yet interviewed providers concerning those cases (Burton, Wall Street Journal, 2/4). -- compiled by Zach Swiss

RX ROUNDUP: AstraZeneca's Q4 Profit Below Analyst Forecasts; Sharp Q4 Sales Decline for Eli Lilly's Effient AstraZeneca's fourth-quarter profit in 2009 was below analyst expectations. Worldwide sales for Eli Lilly's blood-thinning medication Effient declined from the third to fourth quarter of 2009. GlaxoSmithKline announced that it will shift its focus away from antidepressants toward potentially more lucrative medications for other diseases. Business Bristol-Myers Squibb: BMS in 2010 intends to eliminate annual salary increases for its employees worldwide unless legal mandates or contractual stipulations require the increases, the Wall Street Journal's "Health Blog" reports. The move will not apply to employee bonuses (Goldstein, "Health Blog," Wall Street Journal, 2/3). Cephalon: Cephalon this week announced that it intends to purchase generic drugmaker Mepha in a deal expected to cost around $590 million, the Journal's "Health Blog" reports. With the acquisition, Cephalon stands to gain 120 products sold in 50 countries. Mepha sells generics, branded generics and modified-release versions of branded generics for a variety of conditions including anemia, heart disease, malaria and ulcers (White, "Health Blog," Wall Street Journal, 2/3). Financial Reports AstraZeneca: AstraZeneca posted a 24% increase in fourth-quarter net profit in 2009 compared with the same period a year earlier, but the figure was below analyst expectations, the Wall Street Journal reports. The drugmaker on Thursday said that it faces a challenging 2010 because many of its lucrative drugs will become exposed to competition from generic drugmakers. Net profits for the fourth quarter reached $1.55 billion, up from $1.25 billion a year earlier, while sales increased by 9%, from $8.19 billion to $8.95 billion (Whalen/Stovall, Wall Street Journal, 1/28). Eli Lilly: Lilly on Thursday reported $915.4 million in profit in the fourth quarter of 2009, compared with a $3.63 billion loss during the same period a year earlier, the AP/New York Times reports. Revenue also increased by 14% to $5.93 billion. However, sales of the drugmaker's "widely anticipated" blood thinner Effient declined to $3.8 million worldwide for the fourth quarter after third-quarter worldwide sales of $22.6 million, the AP/Times reports (AP/New York Times, 1/28). GlaxoSmithKline: GSK on Thursday announced that its fourth-quarter profit in 2009 increased by 66% and that its full-year profit increased by 20%, the AP/Philadelphia Inquirer reports. The drugmaker also announced its intention to eliminate jobs but declined to say how many jobs would be cut. According to the AP/Inquirer, some reports have stated that GSK could eliminate as many as 4,000 of its 99,000 positions worldwide (AP/Philadelphia Inquirer, 2/4). GSK on Friday also announced that it plans to stop research into new antidepressants and shift its focus to diseases for which it can create more lucrative drugs. The announcement marks a major change for the drugmaker, whose profits in recent years have been closely tied to strong performances of its antidepressants Paxil and Wellbutrin (Whalen, Wall Street Journal, 2/5). Pfizer: Pfizer's fourth-quarter revenue in 2009 increased by 34% to $16.54 billion -- $500 million above analysts' expectations -- but its profits were slightly below expectations, the AP/Inquirer reports. For the fourth quarter, Pfizer said its net income totaled $767 million, or 49 cents per share. Analysts had anticipated a net income of 50 cents per share (AP/Philadelphia Inquirer, 2/3). In other news, Pennsylvania state court Judge Norman Ackerman lowered a $78.7 million damage award against Merck to $5.6 million. The case in question stemmed from a woman who sued the drugmaker, alleging its hormone-replacement drug Prempro caused her to develop breast cancer. Ackerman ruled that the $78.7 million total was excessive but let stand a separate $3.7 million compensatory damages award (Feeley/Pearson, Bloomberg News/Philadelphia Inquirer, 2/1). Roche: Roche missed full-year predictions for its 2009 financial performance and predicted on Thursday that its 2010 sales would increase at a mid-single-digit rate, which is below analysts' expectations, Reuters reports. The drugmaker has opted to focus on developing new drugs rather than lowering its costs as the company faces the loss of patent protections on some of its products (Reid/Cage, Reuters, 2/3). -- compiled by Zach Swiss

INSURER NEWS

INSURANCE INDUSTRY: Cigna Earnings Up; HealthNet Earnings Down Recent news on health insurance companies' earnings reports are below. Cigna: Cigna says it posted fourth-quarter earnings of $330 million, or $1.19 per share, compared with a loss of $209 million, or 77 cents per share, a year earlier, the AP/Miami Herald reports. Revenue declined by 3.8% in the last three months of 2009, to $4.64 billion. Cigna officials said that excluding one-time items, the company earned $1.03 per share (Murphy, AP/Miami Herald, 2/4). HealthNet: HealthNet on Wednesday announced a net loss of $49 million for 2009, HealthLeaders Media reports. The company's adjusted net income for 2009 was $235.1 million, compared with $199.1 million in 2008. The company had a fourth-quarter net loss of $45.2 million, or 43 cents per share, partly because of $137.3 million in charges related to the sale of its Northeast businesses and $15.3 million in cash charges related to other transactions (Cantlupe, HealthLeaders Media, 2/3). -- compiled by Julia Moss

ODDS & ENDS

YESTERDAY ON THE BLOG: Interesting Reads Below is a featured post from AHL's daily, up-to-the-minute blog, AHLAlerts. "Interesting Reads" offers noteworthy articles on health reform. For other informative features -- such as "Our Take," "Editor's Roundup" or "The Blog Line" -- visit AHLAlerts by clicking here. A confluence of changing realities in the economic and political climates might temporarily have pushed the health reform debate to the back burner, but in the back rooms of Congress, efforts are being made to salvage those sweetheart deals that various lawmakers and interest groups were able to forge with the Senate Democrats. "Dems Protect Backroom Deals": Several deals that were added into the Senate health reform bill (HR 3590) to secure a particular senator's or interest group's support appear to be safe from elimination, despite anger from voters and discontent from some lawmakers over the agreements. Politico reports that with the exception of the "cornhusker kickback," which would cover the full cost of a proposed Medicaid expansion in Nebraska, "there is no visible movement to erase" any of the deals that would benefit Louisiana, Montana or Blue Cross Blue Shield of Michigan (Budoff Brown/O'Connor, Politico, 2/3). "Health Reform and Moral Hazard": Timothy Noah of Slate explains how "moral hazard" -- the "theory that artificially lowering the price of any commodity leads to its overconsumption" -- figures into the health reform debate. He writes that the issue could be addressed by levying a fee or copayment on consumers each time they visit a physician. Noah notes that while many people could argue that "there are few experiences less pleasant" than going to the doctor, there are bound to be the "worrywarts or outright hypochondriacs who will abuse" the increased access to health care (Noah, Slate, 2/3). "The Debate Over Selling Insurance Across State Lines": The portability of health insurance coverage became a topic of discussion in the health reform debate when Republicans suggested permitting the practice in their alternative to the Democrats' proposals. Kaiser Health News, however, notes that a variation of the provision is included in the Senate and House (HR 3962) bills and is expected to appear in some form in the final legislation. To address the questions and concerns between the two seemingly different plans, KHN offers up a short primer (Galewitz, Kaiser Health News, 2/3). "Dueling Talking Points on Antitrust Exemption Bill": The House next week is set to consider legislation to repeal the antitrust exemption that the insurance industry has had for more than 50 years. Supporters of the bill touted the measure last week, with House Speaker Nancy Pelosi (D-Calif.) sending out an e-missive filled with key talking points. Not to be left out of the debate, America's Health Insurance Plans -- the industry's lobbying representative -- distributed to the media a research document with their own talking points and several correspondences with federal actuaries and lawmakers (Frates, "Live Pulse," Politico, 2/3). by Santosh Rao, staff writer

OPINIONMAKERS

HEALTH REFORM: Cost of Inaction on Health Reform Is High; Democrats Distancing Themselves From Issue The pieces argue: House legislation to eliminate the antitrust exemption for health insurance companies would reduce competition in the industry because it is based on disinformation from the Obama administration. Democrats' inaction on health reform could have serious effects on U.S. residents' jobs and security. Editorial Legislation scheduled for a vote in the House next week to "strip health insurance companies of their limited antitrust exemption" would "undermine competitiveness in the market," a Washington Times editorial states. According to the Times, the Obama administration "conjured up a picture" of insurance companies "colluding to raise insurance premiums" by using their antitrust exemption. It concludes, "Abolishing the antitrust exemption makes it harder for smaller firms to compete, to the advantage of larger companies. That's change in the wrong direction" (Washington Times, 2/4). Opinion Pieces Jean Silver-Isenstadt, Baltimore Sun: Although it is "important that President Obama is focusing on jobs this week," no one should "forget that without health reform, jobs will be less and less likely to come with health insurance -- and that includes existing jobs that currently offer it," Silver-Isenstadt, executive director of the National Physicians Alliance and the National Physicians Alliance Foundation, writes in a letter to the editor. She continues, "The cost of inaction on health reform will be measured in lost security, dollars and lives," adding, "It is time for all of us to remind our senators and representatives that we expect them to see this work through with speed, pride and full confidence" (Silver-Isenstadt, Baltimore Sun, 2/4). John Fund, Wall Street Journal: After the televised portion of Obama's meeting with Senate Democrats on Wednesday, "Democratic senators lit into White House officials about the chaos that has surrounded the issue" and the lack of a strategy to move forward, columnist Fund writes. "Democrats are no closer to laying out a clear road map to health care than they were ... two weeks ago" when they lost their 60-vote majority in the Senate, he concludes (Fund, Wall Street Journal, 2/4). -- compiled by Santosh Rao