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He’s Not a Pharmaceutical CEO

December 18, 2015
12:56 pm

In the movie Wall Street, the amoral corporate takeover specialist Gordon Gekko is intent on taking over the fictional airline company BlueStar so he can break it up into pieces to sell off for a hefty profit.   In a technical sense, he would become an airline CEO, even if he didn’t know a fuselage from a tail fin.

Martin Shkreli is a real-life Gordon Gekko.  Just arrested this week on securities fraud charges, Shkreli, the 32-year-old co-founder of the MSMB Capital Management hedge fund, has been a fixture in the news over the last several months because of his purchase of Turing Pharmaceuticals and the subsequent decision to raise the price of a decades-old anti-parasite drug from $13.50 a pill to $750.

Headlines about Shkreli’s arrest refer to him as a “pharmaceutical company CEO.”  In the strictest sense, that’s true.  In reality, he bears no resemblance to the leaders of the nation’s research-based pharmaceutical companies who invest billions of dollars in the development of new cures and improved treatments.  It’s a gross inaccuracy to paint the entire biopharmaceutical industry with the stain of Shkreli’s profiteering example.

Some are doing exactly that, though, and using the Turing episode as a catalyst to call for greater government price controls on prescription medications.  Here’s an example just this week from the Vox website:

“The story of Martin Shkreli and Daraprim’s giant price increase is, more fundamentally, a story about America’s unique drug pricing policies. We are the only developed nation that lets drugmakers set their own prices — maximizing profits the same way that sellers of chairs, mugs, shoes, or any other seller of manufactured goods would. In Europe, Canada, and Australia, governments view the market for cures as essentially uncompetitive and set the price as part of a bureaucratic process — similar to how electricity or water are priced in regulated US utility markets.”

The analogy is, of course, severely flawed.  The supply of electricity and water is not contingent upon innovation in the same way that new medicines must be developed and constantly improved to combat cancer, heart disease, diabetes and Alzheimer’s, to name just a few chronic illnesses that affect tens of millions of us.  It’s notable that the calls for bureaucratic price controls, using Shkreli as the poster boy for egregious corporate greed, seldom mention the inevitable tradeoffs in the form of fewer resources for medical research.

Yes, the cost and accessibility of medications is a concern and one that should be addressed, but not with so-called solutions that make society choose between greater affordability today versus better health outcomes in the foreseeable future.  As we’ve seen with the price drop on the Hepatitis C cure once other companies developed their own medications to compete with Gilead Pharmaceutical’s Sovaldi, the market is often self-adjusting when it comes to price.  There are other ideas that warrant discussion, such as regulatory reforms to reduce the extraordinary cost and expense involved in moving a new drug from laboratory to patient.

The point is, it makes no more sense to let an outlier like Martin Shkreli drive pharmaceutical pricing policy any more than it would to arrest every financial services executive because Michael Douglas was so believable as Gordon Gekko.

The Proliferation of Progress Generated by Medicare Advantage

December 11, 2015
3:20 pm

This week the Blue Cross Blue Shield Association, representing plans that serve over four million individuals in Medicare Advantage and Medicare Part D prescription drug plans, hosted a congressional briefing to discuss innovations in Medicare Advantage.    Experts shared abundant evidence that Medicare Advantage plans have risen above and beyond traditional Medicare in providing quality healthcare that is cost-effective.

Several case studies were presented that highlighted continuing improvements being made to improve senior health:

  • Care at Home, a service launched by BCBS of Western New York and Landmark Health, offers a team that does not replace the primary care physician, but rather collaborates with the doctors and stays apprised on how patients are faring in their own residences.  Care at Home has enrolled 2,500 seniors since November 2014.  Patients with multiple chronic diseases generate more than seven times the healthcare costs of patients with only one chronic disease.  Medicare Advantage members who have six or more chronic diseases are eligible for Care at Home.  The coordinated care, which includes nurturing and education family caregivers, has, thus far, helped prevent 617 emergency room visits.
  • CareMore Health System, an Anthem company, uses doctors called extensivists to coordinate care for patients with chronic conditions.  They also ensure that there is proper follow up with patients and that protocols are adhered to by all involved in the patients’ care.  Predictive modeling is utilized to determine risk and practice early intervention, helping to keep costs low.  An average day at CareMore includes visits to homes for social and behavioral support, reading results from monitors in patients’ homes, following up after discharge, and providing rides for patients who have no form of transportation to reach points of care.
  • BCBS of Rhode Island identified pharmaceutical management as a way to lower healthcare costs and improve health outcomes.  The patient- centered pharmacy program serves members with multiple chronic conditions who take at least four medications and spend over $3,000 on drugs.  The medication therapy management includes comprehensive medication reviews, prescriber consultations, counseling for adherence and education, and monitoring to ensure good adherence habits are established.  In just the first three quarters of 2015, 8,632 members were served with an estimated savings of $2.8 million.

These are just a few examples demonstrating how innovation in Medicare Advantage has protected patients from high out-of-pocket costs, maintained quality care, and kept consumer satisfaction levels high.  These individual successes, and the others like them, need to be kept in mind by policymakers when they debate future support for the Medicare Advantage program.  The best practices and outcomes achieved by these pioneers in healthcare should be shared and encouraged so they can be replicated across the country.