Weekend Update / Miscellany

• House Federal Workforce Subcommittee Chairman Stephen Lynch announced last week that on June 24 at 10 am, his subcommittee will hold a hearing on the cost of specialty drugs in the FEHB Program. The GAO recently issued a report on this topic. Specialty drugs are typically injected biologics rather than chemicals in pill form.

  The Pharmacy Times reported on February 1, 2009, that

  Looking ahead, the introduction of [generic versions of specialty drugs or]biogenerics could result in even more substantial savings for patients, with estimates ranging from $14 billion to as much as $67 billion within the first decade of competition. Given these estimates, it is clear that competition from biogenerics will create savings that dwarf those generated by traditional generic pharmaceuticals for both patients and government since 1984.

  However, Congress first should pass a law creating an FDA regulatory pathway for biogenerics. Earlier this month, Congressman Henry Waxman, for whom the 1984 chemical drug generic law is named, asked the President this month to have the FDA investigate ways to create this pathway without legislation according the Fierce Biotech.com. "Waxman also reminded Obama of his pledge to bring down the cost of biologics, which has helped fuel healthcare costs."

• Speaking of drug costs, the pharmaceutical manufacturers trade association Phrma announced a deal with Senate Finance Committee Max Baucus to work cooperatively to reduce the so-call donut hole in Medicare drug coverage. This reminds me of the savings that retail stores were able to create for everyone by charging a few dollars for generic drugs.
  

• The Hill reports that

  Health policy analyst Alec Vachon on Saturday said, "The real question is -- how is this 'deal' [between Sen. Baucus and Phrma] a positive for the pharmaceutical industry? Given the sketchy facts, two speculations: First, the deal may allow industry to dodge new drug rebates that the Finance Committee had proposed, which are profit transfers to government. Even better, given that many seniors aren't filling prescriptions in the 'donut hole,' new 'donut hole' sales are likely very profitable -- even at discount prices because of the low marginal cost of drug manufacturing."

• The Hill further reports that

  Cost issues continue to dog Democrats on healthcare reform. Obama has repeatedly vowed to enact a healthcare reform bill that is completely paid for. That would mean that the $634 billion he has called for healthcare reform would be paid for by tax increases or cuts to healthcare providers.
  
  Covering even most of the uninsured, however, will cost well over $1 trillion and finding the offsets to completely pay for the bill are nearly politically impossible.
  
  The CBO numbers released last week suggest Democrats have two choices: 1. Scale back their massive plans to cover most of the 47 million uninsured and seek coverage in incremental steps; or 2. backtrack on promises to pass a healthcare reform bill that will not add to the federal deficit.

  Similarly the AP reports this afternoon that

  A Republican senator seeking a bipartisan health deal spoke Sunday of "dialing down" expectations while one of President Barack Obama's Democratic allies questioned whether the White House had the votes necessary for a such a costly and comprehensive plan during a recession.

• Finally, last week, New York Attorney General Andrew Cuomo announced a usual reasonable and customary ("UCR") database with HealthNet.

  With Health Net signing on today [June 18], we have reached our goal of covering every single insured New Yorker with our reform efforts,” said Attorney General Cuomo. “I’m also pleased to have partnered with Governor Paterson and Insurance Superintendent Dinallo and created this new regulation to codify the reforms that the entire health insurance industry has now embraced. It will eliminate the conflicts of interest that infected the industry in the past, and ensure that New York healthcare consumers are never subjected to these kind of abuses again.

  Cuomo still must name the qualified university that will run the conflict free database. I understand that Ingenix will stop offering its UCR databases sixty days after the conflict free database is operationsl.