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AMA goes after Big Pharma

The American Medical Association went after Big Pharma at its annual meeting in Chicago:

It urged the federal government to:

  • Let Medicare and Medicaid negotiate prices with drug companies
  • Compel companies  to disclose retail prices in consumer drug ads.
  • Require drug makers to explain why they are increasing the price of any drug by 10 percent or more “each year or per course of treatment,” and making them tell the public before price increases.
  • Allow  the Feds “to take legal action to address price gouging by pharmaceutical manufacturers and increase access to affordable drugs”
  • Speed “review of generic drug applications and prioritize review of such applications when there is a drug shortage, no available comparable generic drug, or a {nongeneric-drug} price increase of 10 percent or more.”

To read more, please hit this link.

Big Pharma, hospitals get into finger-pointing on rising healthcare costs


Spokespeople for the pharmaceutical industry blame hospitals for the continued big increases in healthcare costs; the hospital industry has fired back.

Kirsten Axelsen, vice president of worldwide policy for Pfizer, told  FiercePharma that hospital costs are generally higher than drug costs, but that patients can more easily have have a negative view of Big Pharma because patients can see drug prices  much more clearly than usually very opaque hospital fees because of how insurance plans are designed.

And, of course, there’s politics involved, noted former California Congressman David Dreier:  Almost every member of Congress has a hospital in his or her district but only few have  drug manufacturers.

In 2016, the United States spent $3.4 trillion on healthcare, including $1.1 trillion in hospital costs, $683 billion in physician and clinical expenditures and $348 billion on prescription drugs.

But Tom Nickels, executive vice president for government relations and public policy for the American Hospital Association, told FiercePharma that Big Pharma’s argument is “laughable”

“Just because you are a bigger part of something doesn’t mean that you should be the focus in terms of cost reductions.” Mr. Nickels said, adding that some drug companies have implemented “predatory pricing” practices.

To read more, please hit this link.

Healthcare is drowning in administrative glut


Marion Mass, M.D., wrote a piece  for The Philadelphia Inquirer headlined “A doctor’s perspective: Who stands for patients in the healthcare debate?” Among her observations:

“Take a look at the top lobbyist groups in America. Four are health-care related: Big insurance, Big Pharma, the American Hospital Association and the American Medical Association.

“The result of this lobbying is a phenomenon that can be summed up in two words: administrative glut.

“Since 1970, the number of physicians practicing in America has grown by roughly 200 percent. By contrast, the percentage growth of administrators in the same time period is over 3,000 percent. Healthcare spending per capita has grown by 2,300 percent over the same time period. ”

“The American people are the victims of a {healthcare} system so complex that even many practicing physicians have a hard time unraveling it. But they are certain that their patients’ needs are suffering. Your physician, the one delivering or caring for your children, the one who guides you through your twilight years, has little voice and less confidence in this establishment, mirroring the feelings of frustrated Americans

“There is hope.

“Dozens of grassroots physician groups are working for real reform. We are aligned together and actively collaborating, to find real solutions to heal our sick system.  United, we have a stronger voice to advocate for our patients. We see your suffering. It’s personal for us, because medicine is personal. You learn that the first time you interview a patient and lay your hands on them for examination.

“We believe reducing administrative glut and creating more choices of coverage are the two main components to increase quality access to care and reduce cost for all. The Health Rosetta Principles, formulated as a collaborative effort among entrepreneurs and visionaries in the healthcare space, covers the basic tenants of our proposed changes. A  specific, patient-centric representative plan has been developed by  the Docs4Patient Care Foundation.”

To read her entire essay, please hit this link.


3 big areas for new, profitable healthcare investment


Kapila Ratnam,  a partner at NewSpring Capital and NewSpring Healthcare, identifies and discusses  in MedCity News three areas of healthcare with big investment potential:

Behavioral Health

“According to the National Institute of Mental Health, approximately 10 million people experience a serious mental illness in a given year that substantially interferes with or limits one or more major life activities – evidence that behavioral health services are becoming increasingly necessary. While financing options for these services continue to improve,…the lack of available behavioral health service options is creating a growing demand. In fact, many people today with mental health issues are not receiving the proper treatment they require.”

“The  space has continued to see a number of growing opportunities since the introduction of legislative moves…. Additionally, regardless of this year’s election outcome, many aspects of the behavioral health market won’t change, making it appealing for prime investments in the near future.”

Home Health

“To combat the high cost of healthcare, we are starting to see a much-needed shift from a fee-for-service to a, which focuses on the quality of care that patients receive, rather than the number of services billed. Therefore, many providers are now being rewarded for keeping patients out of the hospital, which is the most expensive point of medical intervention, whereas the home is the cheapest. As this shift takes effect, providers are now incurring more risk, so it’s critical to establish home health networks that are efficient, safe, and convenient for patients out of treatment.”

“As investors, we are interested in the most cost-effective and care-effective home health services. Specifically, connected health technologies such as mobile apps, sensors and wearables that help patients proactively manage their health, offer tremendous investment opportunities.”

Big Pharma Outsourcing

“The pharmaceutical industry is currently battling a mounting number of issues, including shrinking profit margins, heavy competition, a cost-heavy structure, increased regulatory pressure, growing expenses, and more. Faced with these challenges, Big Pharma has shifted their business models. More specifically, they have embraced outsourcing as a way to drive economies of scale without hindering their operations. ”

As private equity investors, {we find that} the explosion of outsourcing over the last 10 years has created promising opportunities. We find the most value in companies that focus on cost saving initiatives for big pharma companies, provide a niche service — such as software — that either allows sponsors to access real-time data on clinical trials, or better manages patients or data or both. ”

To read the full article, please hit this link.

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