During the last month of 2015, The American Journal of Managed Care asked readers to choose what they thought was the top healthcare story from the year. Options included overall themes from the year and specific events.
During the last month of 2015, The American Journal of Managed Care (AJMC) asked readers to choose what they thought was the top healthcare story from the year. Options included overall themes from the year (eg rising drug costs) and specific events (eg CMS’ proposal to pay for end-of-life care).
As we start a new year, here is a look back at the top 5 healthcare stories of 2015.
5. (tie) FDA Approves PCSK9 Inhibitors to Treat High Cholesterol
In July 2015, FDA approved the first in a new class of anti-cholesterol drugs, the PCSK9 inhibitor alirocumab (Praluent). Although Sanofi and Regeneron’s therapy was the first to be approved, its competitor, Amgen’s evolocumab (Repatha) was approved just a month later.
These PCSK9 inhibitors had been highly anticipated as studies found the drugs dramatically lowered “bad” cholesterol. However, these therapies come at a price: more than $14,000 a year. And with between 3.5 and 15 million Americans potentially eligible for the PCSK9 inhibitors, the cost to the US healthcare system could be astronomical.
After Repatha was approved, Express Scripts and CVS Health both announced they would generally not cover the drugs until they cleared their pharmacy and therapeutics committees.
Ultimately, Express Scripts announced in October that it would cover both PCSK9 inhibitors. While it declined to disclose the discount levels it had negotiated, the pharmacy benefit manager did reveal that it expected to spend $750 million on the 2 drugs in 2016.
Meanwhile, CVS Health announced in November that it would give preferred position to Repatha and UnitedHealth announced in December that it was listing Praluent as the preferred PCSK9 on its formularies.
5. (tie) CMS Will Pay for End-of-Life Discussions
Not too long ago, discussions of end-of-life care were compared to “death panels.” However, the United States has come a long way since then. In July 2015, CMS announced a proposal to pay for end-of-life care discussions between Medicare beneficiaries and their providers.
The provision cited recommendations from the American Medical Association (AMA) and other stakeholders and would establish a payment for advance care planning. Earlier in the year, the Institute of Medicine had released a report, Dying in America: Improving Quality and Honoring Individual Preferences Near the End of Life, which highlighted that advance care planning was essential to improve quality of end-of-life care.
Around the same time of CMS’ proposal, JAMA Oncology published research that showed few cancer patients address end-of-life issues in a timely way. Multiple articles in the issue reported that advanced care planning was underused, often inadequate, and sometimes not followed by the physician.
The Kaiser Family Foundation released poll results in September that revealed strong public support for doctors being able to have end-of-life conversations with patients. According to the results, 89% of the public believes physicians should discuss end-of-life issues with patients and more than 80% support compensating physicians for this conversations through either Medicare or commercial insurers.
4. CMS Announces Timeline and Goals to Move to Value-Based Payment
HHS kicked off 2015 in January by announcing goals and a timeline to move Medicare toward a quality-based payment system and away from the current fee-for-service structure. The timeline calls for 30% of traditional Medicare payment to be tied to quality or value by the end of 2016 through payment models such as accountable care organizations (ACOs) or bundled payment arrangements. By the end of 2018, 50% of payments should be tied to those alternative payment models.
Along with announcing the new timeline and goals, HHS also announced the creation of a Health Care Payment Learning and Action Network to make the goals scalable beyond Medicare.
In March, CMS announced a new ACO model, the Next Generation ACO Model, which takes on greater performance risk but could potentially mean greater rewards. HHS Secretary Sylvia M. Burwell explained that the model was created as part of the agency’s larger effort to move the Medicare program, and the healthcare system in general, toward value-based payments.
In an interview with AJMC, Joseph Gifford, MD, chief executive officer of the Providence-Swedish Health Alliance, explained the importance of CMS’ announcement of the move away from fee-for-service. He called it a “nail in the coffin” for the group of skeptics who thought the movement for value-based care would pass.
“This is the federal government here, and this is not going to pass,” Dr Gifford said. “This value-based, ACO-based, shared savings contracting isn’t going to pass away any time soon.”
3. Healthcare Mega-Mergers (eg Aetna-Humana, Anthem-Cigna)
This year was a banner one for healthcare mergers and acquisitions and everything got kicked off in March when UnitedHealth announced it would buy Catamaran for about $12.8 billion in an effort to boost its pharmacy benefit business and better compete with Express Scripts.
However, the purchasing frenzy reached a peak in July when Aetna and Humana reached a deal for $37 billion at the beginning of the month and Anthem and Cigna closed out the month with a $54.2 billion deal.
These 2 health insurer mergers further consolidate the market as the big 5 insurers shrinks down to just 3. These deals are still subject to regulatory scrutiny and some industry stakeholders have spoken out about the dangers of such consolidation. The AMA released 2 analyses on the potential mergers and found that they would reduce competition in nearly half the country (23 states), likely resulting in higher-than-competitive premiums and unfair terms for physicians.
In October, Walgreens agreed to buy Rite Aid for $17.2 billion, which would reduce the number of national retail drug chains from 3 to just 2 and create a new entity with 12,700 stores, far ahead of CVS, which has 7800.
One month later, Pfizer and Allergan announced an agreement for a $160 billion merger, the second-largest in the healthcare industry’s history. However, this deal had a slight twist—it would employ a controversial tax-saving strategy by combining under Allergan plc to retain Allergan’s legal and tax domicile in Ireland, but the company will be renamed Pfizer plc and the new company global operational headquarters will be based in New York.
And finally, the year was capped when Kaiser Permanente announced in December that it had made a deal to acquire Group Health Cooperative, based in Seattle, which will expand Kaiser’s reach by 509,000 members. The deal places 2 leading value-based health plans under 1 roof and extends Kaiser’s reach along the entire Pacific Coast.
2. Pharmaceutical Drug Price Hikes
Although unhappiness over rising drug costs is nothing new in the United States, the issue took a whole new light thanks to the actions of 1 man: Martin Shkreli. The saga the 62-year-old drug Darapram and its overnight 5000% price hike would become a catalyst and the leading example of greed in the pharmaceutical industry.
Shkreli’s Turing Pharmaceuticals purchased a 62-year-old drug used to treat toxoplasmosis and raised the price from $13.50 a table to $750 in mid-August. Following a report in The New York Times in September, Democratic presidential hopeful Senator Bernie Sanders (I-Vt) and Representative Elijah E. Cummings (D-Md) announced an investigation into the price increase. He released his own plan to combat rising prescription drug costs as did his presidential candidate opponent, Hilary Clinton.
Sanders has also gone after Valeant Pharmaceuticals International Inc, regarding the escalating prices that the company charges for Isuprel and Nitropress. The company purchased the heart medications from another company and then increased their prices by 525% and 212%, respectively.
Mylan also faced federal scrutiny over drug pricing when the Department of Justice subpoenaed the company in regards to the pricing and marketing of its generic doxycycline antibiotic products. And the Senate Special Committee on Aging has been investigating the new tactic of companies to purchase drugs already on the market and then raise the price. The committee also reprimanded Valeant, Turing, Retrophin Inc, and Rodelis Therapeutics.
1. King v Burwell Decision Upholds ACA Subsidies
The country watched with bated breath as the Supreme Court of the United States heard arguments on a case that could unravel the entirety of President Barack Obama’s signature healthcare legislation.
The story began in 2014 when the Supreme Court first passed on the Affordable Care Act (ACA) subsidy case and then decided to review the challenge to the healthcare law. The lawsuit challenged whether individuals on the federal exchange were eligible to receive subsidies to purchase health insurance on HealthCare.gov when the law specifically read “established by the state.” However, in the first challenge to the ACA, the Supreme Court ruled that the states did not have to set up their own exchange, but could instead choose to use the federally facilitated marketplace.
During the nearly 5 months between when oral arguments were held on March 4 and a ruling handed down on June 25, the question loomed: what would happen if the court struck down subsidies on the federal exchange?
Some believed that removing the subsidies would create a “death spiral” in the affected markets. David Blumenthal, MD, CEO of The Commonwealth Fund, explained to AJMC that a decision in favor of the plaintiffs would mean that wealthy states, like New York and California, which had set up their own exchanges, would continue to receive subsidies while less well-to-do states would no longer receive them. This reversal of the way subsidies typically work would exacerbate health disparities in the US.
Meanwhile, Avik Roy, senior fellow at the Manhattan Institute and a proponent of replacing the ACA, described ways Congress could potentially act if the ruling went against the Obama administration. He explained that while the fault rests with the Obama administration, Republicans, as the controlling party in Congress, would be responsible for coming up with a solution.
In addition, multiple studies outlined the ways premiums would increase if the plaintiffs won their challenge and how many enrollees would drop coverage, which would affect the risk pool. RAND estimated that the individual market would be reduced by more than 9.6 million with premiums increasing by 47%. The Urban Institute reported that a ruling in favor of the plaintiffs would result in $12 billion worth of uncompensated healthcare as people lose insurance they can no longer afford without the subsidies.
Finally, Arkansas, Delaware, and Pennsylvania all received tentative approval prior to the Supreme Court’s ruling to set up their own state-based insurance exchanges in order to protective their residents if needed.
However, ultimately, the worrying was for naught. On June 25, 2015, the most serious challenge to the ACA was overcome when the Supreme Court ruled 6-3 in favor of upholding the subsidies. Chief Justice John Roberts wrote the decision, concluding that the phrase in question meant state and federal exchanges were “equivalent.” Justices Antonin Scalia, Clarence Thomas, and Samuel Alito all dissented with Scalia calling the court’s opinion “interpretive jiggery-pokery.”