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Five things to know about the new drug pricing negotiations

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The Biden administration has picked the first 10 high-priced prescription drugs subject to federal price negotiations, taking a swipe at the powerful pharmaceutical industry. It marks a major turning point in a long-fought battle to control ever-rising drug prices for seniors and, eventually, other Americans.

Under the 2022 Inflation Reduction Act, Congress gave the federal government the power to negotiate prices for certain high-cost drugs under Medicare. The list of drugs selected by the Centers for Medicare & Medicaid Services will grow over time.

The first eligible drugs treat diabetes, blood clots, blood cancers, arthritis, and heart disease — and accounted for about $50 billion in spending from June 2022 to May 2023.

The United States is clearly an outlier on drug costs, with drugmakers charging Americans many times more than residents of other countries “simply because they could,” Biden said Tuesday at the White House. “I think it’s outrageous. That’s why these negotiations matter.”

He added, “We’re going to keep standing up to Big Pharma and we’re not going to back down.”

Democratic lawmakers cheered the announcement, and the pharmaceutical industry, which has filed a raft of lawsuits against the law, condemned it.

The companies have until Oct. 2 to present data on their drugs to CMS, which will make initial price offers in February, setting off negotiations set to end next August. The prices would go into effect in January 2026.

Here are five things to know about the impact:

1. How important is this step?

Medicare has long been in control of the prices for its services, setting physician payments and hospital payments for about 65 million Medicare beneficiaries. But it was previously prohibited from involvement in pricing prescription drugs, which it started covering in 2006.

Until now the drug industry has successfully fought off price negotiations with Washington, although in most of the rest of the world governments set prices for medicines. While the first 10 drugs selected for negotiations are used by a minority of patients — 9 million — CMS plans by 2029 to have negotiated prices for 50 drugs on the market.

“There’s a symbolic impact, but also Medicare spent $50 billion on these 10 drugs in a 12-month period. That’s a lot of money,” said Juliette Cubanski, deputy director of KFF’s analysis of Medicare policy.

The long-term consequences of the new policy are unknown, said Alice Chen, vice dean for research at University of Southern California’s Sol Price School of Public Policy. The drug industry says the negotiations are essentially price controls that will stifle drug development, but the Congressional Budget Office estimated only a few drugs would not be developed each year as a result of the policy.

Biden administration officials say reining in drug prices is key to slowing the skyrocketing costs of U.S. health care.

2. How will the negotiations affect Medicare patients?

In some cases, patients may save a lot of money, but the main thrust of Medicare price negotiation policy is to provide savings to the Medicare program — and taxpayers — by lowering its overall costs.

The drugs selected by CMS range from specialized, hyper-expensive drugs like the cancer pill Imbruvica (used by about 26,000 patients in 2021 at an annual price of $121,000 per patient) to extremely common medications such as Eliquis (a blood thinner for which Medicare paid about $4,000 each for 3.1 million patients).

While the negotiations could help patients whose Medicare drug plans require them to make large copayments for drugs, the relief for patients will come from another segment of the Inflation Reduction Act that caps drug spending by Medicare recipients at $2,000 per year starting in 2025.

3. What do the Medicare price negotiations mean for those not on Medicare?

One theory is that reducing the prices drug companies can charge in Medicare will lead them to increase prices for the privately insured.

But that would be true only if companies aren’t already pricing their drugs as high as the private market will bear, said Tricia Neuman, executive director of KFF’s program on Medicare policy.

Another theory is that Medicare price negotiations will equip private health plans to drive a harder bargain. David Mitchell, president of the advocacy group Patients for Affordable Drugs, predicted that disclosure of negotiated Medicare prices “will embolden and arm private sector negotiators to seek that lower price for those they cover.”

Stacie B. Dusetzina, a professor of health policy at Vanderbilt University, said the effect on pricing outside Medicare isn’t clear.

“I’d hedge my bet that it doesn’t change,” she said.

Nonetheless, Dusetzina described one way it could: Because the government will be selecting drugs for Medicare negotiations based partly on the listed gross prices for the drugs — distinct from the net cost after rebates are taken into account — the process could give drug companies an incentive to lower the list prices and narrow the gap between gross and net. That could benefit people outside Medicare whose out-of-pocket payments are pegged to the list prices, she said.

4. What are drug companies doing to stop this?

Even though negotiated prices won’t take effect until 2026, drug companies haven’t wasted time turning to the courts to try to stop the new program in its tracks.

At least six drug companies have filed lawsuits to halt the Medicare drug negotiation program, as have the U.S. Chamber of Commerce and the Pharmaceutical Research and Manufacturers of America, known as PhRMA.

The lawsuits include a variety of legal arguments. Merck & Co., Johnson & Johnson, and Bristol Myers Squibb are among the companies arguing their First Amendment rights are being violated because the program would force them to make statements on negotiated prices they believe are untrue. Lawsuits also say the program unconstitutionally coerces drugmakers into selling their products at inadequate prices.

“It is akin to the Government taking your car on terms that you would never voluntarily accept and threatening to also take your house if you do not ‘agree’ that the taking was ‘fair,’” Janssen, part of Johnson & Johnson, wrote in its lawsuit.

Nicholas Bagley, a law professor at the University of Michigan, predicted the lawsuits would fail because Medicare is a voluntary program for drug companies, and those wishing to participate must abide by its rules.

5. What if a drug suddenly gets cheaper by 2026?

In theory, it could happen. Under guidelines CMS issued this year, the agency will cancel or adjourn negotiations on any drug on its list if a cheaper copycat version enters the market and finds substantial buyers.

According to company statements this year, two biosimilar versions of Stelara, a Johnson & Johnson drug on the list, are prepared to launch in early 2025. If they succeed, it would presumably scotch CMS’ plan to demand a lower price for Stelara.

Other drugs on the list have managed to maintain exclusive rights for decades. For example, Enbrel, which the FDA first approved in 1998 and cost Medicare $1.5 billion in 2021, will not face competition until 2029 at the earliest.

KFF Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF—an independent source of health policy research, polling, and journalism. Learn more about KFF.

This article first appeared on Mississippi Today and is republished here under a Creative Commons license.

Mississippi Today

On this day in 1972

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mississippitoday.org – Jerry Mitchell – 2024-11-16 07:00:00

Nov. 16, 1972

Credit: Courtesy: LSU Manship School News Service

A law enforcement officer shot and killed two students at Southern University in Baton Rouge after weeks of protests over inadequate services. 

When the students marched on University President Leon Netterville’s office, Louisiana Gov. Edwin Edwards sent scores of police officers in to break up the demonstrations. A still-unidentified officer shot and killed two 20-year-old students, Leonard Brown and Denver Smith, who weren’t among the protesters. No one was ever prosecuted in their slayings. 

They have since been awarded posthumous degrees, and the university’s Smith-Brown Memorial Union bears their names. Stanley Nelson’s documentary, “Tell Them We Are Rising: The Story of Black Colleges and Universities,” featured a 10-minute segment on the killings. 

“They were exercising their constitutional rights. And they get killed for it,” former student Michael Cato said. “Nobody sent their child to school to die.” 

In 2022, Louisiana State University Cold Case Project reporters, utilizing nearly 2,700 pages of previously undisclosed documents, recreated the day of the shootings and showed how the FBI narrowed its search to several sheriff’s deputies but could not prove which one fired the fatal shot. The four-part series prompted Louisiana Gov. John Bel Edwards to apologize to the families of the victims on behalf of the state.

This article first appeared on Mississippi Today and is republished here under a Creative Commons license.

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Gloster residents protest Drax’s new permit request

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mississippitoday.org – Alex Rozier – 2024-11-15 13:33:00

GLOSTER — Drax, the United Kingdom-based wood pellet producer that’s violated air pollution limits in Mississippi multiple times, is asking the state to raise the amount of emissions it’s allowed to release from its facility in Gloster.

In September, the state fined Drax $225,000 for releasing 50% over the permitted limit of HAPs, or Hazardous Air Pollutants, from its facility Amite BioEnergy. In a pending permit application that it submitted to the Mississippi Department of Environmental Quality in 2022, the company is seeking to transition from a “minor source” of HAPs to a “major source.”

A “major source” permit would remove the limit over the facility’s total HAP emissions, but it would apply a new limit over the rate at which Drax could release the pollutants.

This year’s fine was its second penalty for violating Mississippi law around air pollution limits. In 2020, the state fined the company $2.5 million for releasing over three times the legal threshold of Volatile Organic Compounds, or VOCs, one of the largest such fines in state history. Drax underestimated its VOC releases since the facility opened in 2016, but didn’t realize it until 2018. The facility didn’t come into compliance until 2021.

The Environmental Protection Agency lists a variety of potential health impacts from exposure to HAPs, including damage to the immune system and respiratory issues. VOCs can also cause breathing problems, as well as eye, nose and throat irritation, according to the American Lung Association.

About sixty people packed into a Gloster public library for MDEQ’s public hearing over Drax’s permit application on Nov. 14, 2024.

For years since Drax’s violations became public, nearby residents have attributed health issues to living near the facility. During a public hearing on Drax’s permit request Thursday in Gloster, attendees reiterated those concerns.

“We all experience headaches every day,” resident Christie Harvey said about her and her grandchildren. Harvey said she has asthma too, and her doctor was “baffled” by her symptoms. “Each week I have to take (my grandchildren) to the clinic for upper respiratory issues … It’s not fair that we have to go through this. Drax needs to lower the pollution as much as possible.”

Part of the public outcry is the proximity of people’s homes to the plant, which is within a mile of Gloster’s downtown.

A screenshot of Google Maps showing the location of Drax’s Amite BioEnergy facility relative to the rest of Gloster. The facility is within a mile of the downtown area.

“The wood pellet plant in Lucedale is situated in an industrial park outside of town,” Andrew Whitehurst of Healthy Gulf, an environmental group dedicated to protecting the Gulf of Mexico’s natural resources, said at the meeting. “The wood pellet plant that (Enviva is) trying to put in Bond will be situated north and west of the downtown area. Not like this when it’s right smack in the middle (of the city). It’s totally inappropriate. People can’t take it, they don’t deserve it.”

In a statement to Mississippi Today, Drax said it prioritizes the public health and environment in Gloster, adding that the permit modification is a part of standard business practice.

“When we first began operations, some of our original permits were not fit for purpose,” spokesperson Michelli Martin said via e-mail. “We are now working to acquire the appropriate permits for our operating output and to improve our compliance. Within these permits the requirements may change based on engineering data and industry standards. This permit modification is part of our ongoing plan to provide MDEQ with the most accurate data. Drax fully supports the resolution of our permitting request and looks forward to working with MDEQ to finalize the details.”

While researchers, including from Brown University, are studying the health symptoms of residents near the wood pellet plant, there is no proven connection between the facility’s emissions and those symptoms.

Erica Walker, a Jackson native who teaches epidemiology at Brown and who’s leading the study, spoke to Mississippi Today earlier this year. Regardless of the cause and effect, she said, the decision to put the plant near disadvantaged communities with poor health outcomes is concerning.

“We want to make sure we aren’t additionally burdening already burdened communities,” Walker said.

Operations resume at Drax in Gloster, Miss., on Friday, Feb. 16, 2024. Some Gloster residents are concerned with the industrial pollution caused by the company that produces wood pellets in the town. Credit: Eric J. Shelton/Mississippi Today

About 1,300 people live in the city, according to Census data, and 39% live below the poverty line.

Moreover, Gloster residents often have to travel hours, to cities such as McComb and Baton Rouge, to find the nearest medical specialist. Amite County, where Gloster is, has a higher rate of uninsured residents than the rest of the state, according to County Health Rankings, and the ratio of residents to primary care physicians is over three times greater in the county than Mississippi as a whole.

As part of its application, Drax is seeking a Title V permit under the Clean Air Act, which the EPA requires for major sources of air pollutants. This gives the EPA the opportunity to review Drax’s application and public comments submitted with it. The public can submit comments on the application until Nov. 26, and can do so through MDEQ’s website.

The Mississippi Environmental Quality Permit Board, which is made up of officials from several state agencies, will then decide whether or not to grant the new permits. A full overview of the process and Drax’s application is available online.

This article first appeared on Mississippi Today and is republished here under a Creative Commons license.

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Mississippi receives ‘F’ rating on preterm birth rate

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mississippitoday.org – Sophia Paffenroth – 2024-11-15 10:11:00

Mississippi received an F grade for its rate of preterm births in 2023 – those occurring before 37 weeks gestation – from the 2024 March of Dimes report card

Mississippi’s preterm birth rate was 15%, the worst in the country. Any state with a rate greater than 11.5% also received an F. The U.S. average was 10.4%. 

Preterm births in Mississippi have risen steadily over the last decade, increasingly nearly 2% since 2013. In Jackson, the state capital, nearly one in five babies are born preterm, according to the report. 

“As a clinician, I know the profound impact that comprehensive prenatal care has on pregnancy outcomes for both mom and baby,” Dr. Amanda P. Williams, interim chief medical officer at March of Dimes, said in a press release. “Yet, too many families, especially those from our most vulnerable communities, are not receiving the support they need to ensure healthy pregnancies and births. The health of mom and baby are intricately intertwined. If we can address chronic health conditions and help ensure all moms have access to quality prenatal care, we can help every family get the best possible start.” 

In addition to inadequate prenatal care, factors such as smoking, hypertension, diabetes and unhealthy weight can cause people to be more likely to have a preterm birth.

The report highlighted several other metrics, including infant mortality – in which Mississippi continues to lead the nation. 

In 2022, 316 babies in the state died before their first birthday. Among babies born to Black mothers, the infant mortality rate is 1.3 times higher. 

The state’s maternal mortality rate of 39.1 per 100,000 live births is nearly double the national average of 23.2.

Mississippi has yet to expand Medicaid – one of only 10 states not to do so – and tens of thousands of working Mississippians remain without health insurance. It also has not implemented paid family leave, doula reimbursement by Medicaid, or supportive midwifery policies – all of which March of Dimes says are critical to improving and sustaining infant and maternal health care.

The Legislature passed a law last session that would make timely prenatal care easier for expectant mothers, but more than four months after the law was supposed to go into effect, pregnant women still can’t access the temporary coverage.

“March of Dimes is committed to advocating for policies that make healthcare more accessible like Medicaid expansion, addressing the root causes of disparities, and increasing awareness of impactful solutions like our Low Dose, Big Benefits campaign, which supports families and communities to take proactive steps toward healthy pregnancies,” Cindy Rahman, March of Dimes interim president and CEO, said in a press release.

This article first appeared on Mississippi Today and is republished here under a Creative Commons license.

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