After being approved by a key committee last week, a bill that would have required drug companies to justify treatment costs and price hikes was pulled by its author on Wednesday.
California state Sen. Ed Hernandez (D-West Covina) said that he introduced the bill “with the intention of shedding light on the reasons precipitating skyrocketing drug prices.” But amendments by an Assembly committee last week make it difficult to accomplish this goal, he said in a statement.
“The goal was transparency, making sure drug companies played by the same rules as everyone else in the health care industry,” he said.
The original bill required that drug manufacturers notify state agencies and health insurers within 60 days of federal approval of a new drug with a price tag of $10,000 or more per year or for one course of treatment and provide information justifying those prices. It also required these companies to provide notice before they increased the price of a drug by more than 10 percent. It was approved by the Senate in June.
But amendments by the Assembly Appropriations committee raised the reporting threshold for drug price increases to more than 25 percent. The amendments also removed the requirement for drug companies to provide justification for the price increases and delayed by a year when these notifications would have to go into effect.
“I would have preferred to see the Legislature tackle the need for pharmaceutical pricing transparency this year, but I respect Senator Hernández’s decision,” said Assemblywoman Lorena Gonzalez (D-San Diego), chair of the Assembly Appropriations committee. “I believe the amended version of SB 1010 [the bill] would have provided a first-in-the-nation framework this year that could have been built upon in the future.”
Hernandez said he will continue to work closely with health advocates and community organizations until they “get it right.”
“This is an issue that will not go away and the public demands answers,” he added.
The bill had gathered support from patient, labor, education and business groups and was opposed primarily by the pharmaceutical industry. The opponents have said the bill places the responsibility solely on drug companies, ignoring that other organizations also affect drug prices, including wholesalers, distributors, health plans and other purchasers.
Some groups representing seniors and patients with chronic diseases had also expressed concerns about the legislation.
“The voters are with us and will be even more so in the future,” said Anthony Wright, executive director of Health Access California, a Sacramento-based health care advocacy group. “Every new high-priced drug or unjustified price spike increases public attention and anger, not to mention contributes to rising health premiums.”
Supporters referred to the bill as a solution to battling rising health care costs. Allowing insurers and state purchasers to know the cost of drugs at least 30 days in advance would enable them to better negotiate prices, supporters had said.
Key state drug purchasers include the California Public Employees’ Retirement System and Medi-Cal, the state’s version of the Medicaid program for low-income people.
Researchers have said that while drug price transparency measures alone, such as Hernandez’s bill, would not bring health care costs down, they could help prevent drug companies from raising prices without explanation.
Similar proposals in other states have included requiring drug companies to report closely held research and development costs to government agencies. California joins other states where efforts have been stalled this year.
Hernandez’s bill is separate from a ballot initiative on drug prices also garnering publicity this summer. That initiative, Proposition 61, would prohibit the state from paying more for prescription drugs than the lowest prices negotiated by the U.S. Department of Veterans Affairs.
For consumers, the idea of getting a genetic test to determine risks for hereditary diseases is becoming an increasingly common proposition, but new research suggests that sometimes the accuracy of those results may depend on what ethnicity you are.
Take, for instance, hypertrophic cardiomyopathy, one of the most common hereditary heart diseases. It is also a silent disorder that has caused countless young athletes to suffer sudden collapse or cardiac arrest during team practices or sporting events.
African Americans have traditionally been considered at higher risk for the disorder. But a study out Wednesday in the New England Journal of Medicine concluded that common ways to determine that level of risk may be skewed because studies have traditionally had low numbers of black participants. It turns out that genetic characteristics based on ethnic differences caused some people to be diagnosed with a predilection for the disease — even though those markers were actually benign.
The researchers suggest these findings indicate a need for diversity in genomic research in interpreting these differences.
“Historically we’ve had less African American representation in these studies,” said Arjun Manrai, lead author of the study and research fellow at the Harvard Medical School. “Our paper highlights ethnicity as a key way to get a handle on classification of genetic variants.” Genetic variants are differences in DNA structure that determine human features and are unique to every person.
Manrai first looked at the data from the National Heart, Lung, and Blood Institute Exome Sequencing Project, which includes genomic data from 4,300 white Americans and 2,204 African Americans. He expected to find that 1 out of 500 individuals would have the genetic variants that cause the disease — that’s the rate at which the disorder occurs in the general population. But instead, he found that 1 out of 4 individuals had those mutations and those individuals were disproportionately African Americans.
“This was the initial shocking revelation,” he said.
His team decided to figure out if those mutations were misclassified as harmful. They first looked at the initial studies that identified these genetic variants as disease-causing, focusing on five specific abnormalities that appear most frequently in the NHLBI population. They found that these studies had small sample sizes and none had representative samples of African Americans in their control groups.
They then compared genetic sequences of African Americans and whites through the 1000 Genomes Project, which has genome data from 14 populations worldwide, confirming the five variants they identified occurred most commonly among African Americans.
At the same time, they examined data from the Laboratory for Molecular Medicine operated by Partners HealthCare Personalized Medicine, a clinical lab that diagnoses and performs genetic testing for patients. By using the lab’s classification system that includes data regarding the frequency of genetic variants in control populations, they determined that these five variants were actually benign. Four had been classified by the Human Gene Mutation Database in the most pathogenic category.
In the Partners’ clinic records for the past decade, the authors found seven patients of African or unspecified ancestry between 2005 and 2007 who were told they had the disease-causing genes based on these misclassified variants. According to their calculations, inclusion of even a small number of African Americans in study control groups could have prevented the misclassifications.
In regard to hypertrophic cardiomyopathy, the misdiagnoses of risk may have resulted in unnecessary hardships for the patients and the families. But the lack of diversity in scientific studies and control groups can have other significant implications. Esteban Burchard, a professor at the University of California San Francisco, has studied how genetic differences can lead to higher rates of asthma among African Americans, but the drugs designed to treat diseases, he wrote, often work better in people of European origins.
Burchard published a study last year that showed less than 5 percent of lung disease studies funded by the National Institutes of Health in the last two decades have statistically meaningful number of participants from ethnic minorities.
“It’s like basing your whole world … on one opinion or one biologic resource,” Burchard said. “And that’s a problem because we miss the variation in genetics that is present worldwide.”
Genomic data from diverse populations is needed to find mutations specific to different ethnicities that indicate disease or in some cases, demonstrate responsiveness to treatments, he said.
Manrai points toward relatively new projects, such as the NHLBI Exome Sequencing Project and the 1,000 Genomes that now have genomic sequences from diverse populations, although there is still a need for data from Native Americans and Asian Americans.
“There is now an opportunity to use those resources to study hypertrophic cardiomyopathy and other diseases as well as reassess a lot of studies that support the genetic studies that might be decades old,” Manrai said. “Since studies in the past do not have perfect mixes and they shape the current literature, it’s important to evaluate those studies with current data.”
The 2010 health law was meant to expand insurance coverage so that Americans could get medical care they would otherwise go without — and not spend a fortune doing so. Though it’s still early, new evidence suggests this scenario is playing out.
Research published online by Health Affairs Wednesday examines what happened when people got insurance through the law — either with a private plan purchased via the online marketplaces or through Medicaid, the state-federal program for low-income people. The study specifically focuses on how many medical prescriptions they filled.
The researchers analyzed data from more than 6.7 million people who filled prescriptions in January 2012 and followed their patterns of medication use and out-of-pocket spending through December 2014. One third of those people had no health insurance before the Obamacare coverage took effect in January 2014. It tracked how people’s insurance status changed, compared how many prescriptions they filled after the switch and tracked how consumers’ out-of-pocket costs were affected.
The takeaway: People who got insurance through the health law were significantly more likely to get prescription medications than they were before. And when they did, they typically ended up spending less of their own money for those drugs.
“People who gain coverage filled more prescriptions and spent a lot less out of pocket. It speaks to the potential health benefits from gaining coverage,” said Andrew Mulcahy, the study’s lead author and a health policy researcher at the RAND Corp., a non-profit think tank based in California. “It speaks to the barriers to getting care when you don’t have insurance.”
That said, those gains aren’t uniform: Lower-income people were far more likely to benefit. Specifically, people who went from being uninsured to enrolling in Medicaid filled 13.3 more prescriptions on average. They also spent 58 percent less out of pocket for those drugs. Those who got private insurance, by comparison, filled four more prescriptions on average and spent 29 percent less out of pocket.
The idea, Mulcahy said, is that those who now qualify for Medicaid are more likely to go without health care if money is an obstacle. They are also more likely to have health conditions that require prescription drugs.
“Paying cash for your prescriptions is a barrier to your care. It’s more of a barrier for people who are low-income,” he said.
The findings help illuminate the law’s effectiveness, especially in terms of improving access to medication, said Jonathan Kolstad, an assistant professor of economic analysis and policy at the University of California, Berkeley. But it’s important to note that it only looks at a select group: people who were willing and able to buy at least some drugs before 2014, even if they had no insurance and had to pay the full costs themselves. That suggests they might need the drugs more, or be more motivated to manage their health — a quality that possibly guides their ability to select an appropriate health plan and then use it.
“If you have people who have such a strong demand for health care service … that’s a group we’re intrinsically interested in from a policy perspective,” said Kolstad, who wasn’t involved with the Health Affairs study but has researched how people navigate and use health insurance. “It’s not representative. But it’s a piece in the broader puzzle.”
There’s also the question of what prescriptions are necessary — whether, for instance, people are getting vital care they previously couldn’t afford, or if they are now buying drugs they don’t need because they don’t see the costs.
That remains open, Mulcahy said. But there are clues. Here, for instance, the researchers looked at people with chronic illnesses: diabetes, breast cancer, depression, asthma and high cholesterol. Those people saw a similar proportional increase in prescriptions filled and probably do need the medication.
“If you have diabetes or one of these other conditions, there’s a pretty compelling argument that you should be on some kind of treatment,” he said.
And, importantly, the growth in prescriptions can be used as a proxy to answer other questions, Mulcahy said, such as if people who get health insurance then use it to get medical care. After all, filling a prescription means the patient also visited at least one doctor. From that vantage, he said, the results are promising.
“These people are more than getting coverage,” he said. “They’re using coverage to get care.”
But getting care isn’t the same as getting healthier. Though the researchers found people were more likely to get drugs, Kolstad noted, the research doesn’t have enough evidence in it to figure out long term outcomes. For instance, are these newly insured people being compliant with their medications? And are the drugs helping them manage their conditions and improve their wellbeing? Or are they having unintended side effects that could later be damaging?
And there’s the sampling issue, which the authors note as a limitation on their study. Because the people surveyed here were already getting prescriptions — even when it posed a greater financial hardship — they could have, for instance, been more likely to seek out a doctor than the average consumer.
Previous research, for instance, has suggested getting insurance means people are more likely to see a doctor. But there’s no proof they’ll do other things that might matter, such as eating healthier, exercising or quitting smoking. Other experts have suggested more time is necessary to understand how expanding health care coverage could actually improve health and lead to system-wide cost savings.
As more data becomes available, researchers can tackle those questions, Mulcahy said. But the findings underscore a meaningful growth.
“If the goal of the coverage expansion was to reduce the financial burden of being insured, this is direct evidence of that happening. If the goal was to improve health, we’re one step short of that,” he said. “But the signs align. We have some direct evidence it’s offering financial benefits. And there are signs it’s helping on the health side.”
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