TIM MULLANEY – How Gilead ‘broke’ Obamacare

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As someone who is decidedly apolitical, it is always a solace to follow that “confirmation bias”.

 

Opinion: How Gilead ‘broke’ Obamacare

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The cost surge in the exchanges is about a few drugs — and it’s fixable

The news that Aetna, UnitedHealthcare and Humana are pulling back on commitments to sell insurance on Healthcare.gov was greeted with utterly predictable reactions: Republicans yelling that they told us Obamacare wouldn’t work, while Democrats say the GOP has cried wolf about the Affordable Care Act for years.

But no one is listening to what Aetna AET, -0.69% and United UNH, -0.11% actually said: The problem’s not really Obamacare. Their biggest challenge in individual insurance is the cost of super-expensive new drugs, especially to fight hepatitis C and HIV — both markets dominated by erstwhile Wall Street darling Gilead Sciences GILD, -1.28% .

The fight over the exchanges is everything wrong with Washington in a nutshell, because it’s clear that a large percentage of the problem is something specific and fixable, but no one is listening because the answer doesn’t fit ideological preconceptions.

The two biggest insurers leaving the exchanges say the No. 1 problem is specialty-drug costs. That problem is fairly narrow and already beginning to go away. And the comprehensive solution Obamacare needs can begin when Washington reads five whole earnings reports for insurers, including Anthem ANTM, -0.43% and Cigna CGN, -10.83% , who aren’t cutting their exchange sales.

Which Washington, collectively, won’t do.

Let’s run numbers first. UnitedHealthcare Aetna and Humana HUM, -0.61% will lose $1.5 billion to $2 billion on federal and state insurance exchanges this year — a pittance next to the $3 trillion health-care system, or even the companies’ nearly $300 billion in yearly revenue. Those three companies beat second-quarter profit estimates by an average of seven cents a share. Threatened they’re not.

Here’s what they say about why they’re losing money. Cause, outside D.C., facts matter.

“The severity of chronic conditions inside the population actually increased year-over-year,” UnitedHealthcare Chief Operating Officer Daniel Schumacher said. “If you look at the prevalence of chronic disease, things like HIV and hepatitis C, diabetes, [chronic obstructive pulmonary disease], those are things that the prevalence was high to begin with in 2015, and that has increased into 2016.”

Aetna said its losses were driven by “specialty pharmacy,’’ a segment revolutionized by the arrival of super-expensive HCV drugs (up to $94,500 per patient) beginning in 2013. Its fix is far from ditching insurance for the roughly 25 million people Obamacare now covers: It just wants the feds to include drug expenses in ACA formulas letting insurers share risks of the highest-cost patients, as they share hospital costs now. Cost-sharing makes the law’s ban on discrimination against sick people possible.

“There is no way to fix this unless we include pharmacy… and we find a way to cover these individuals,” Aetna CEO Mark Bertolini said. “These people need this care, and it’s appropriate that they get it.’’

This is where we get to Gilead, the world’s largest maker of both HIV and hep C drugs. (About two-thirds of Gilead’s sales come from hep C drugs, and its HIV medicines aren’t cheap either). And to where official Washington might learn something from watching the markets.

The market is suppressing Gilead’s stock because the surge of hep C drug sales will be temporary, not the “death spiral” cable-news pundits see. As Gilead’s chart shows, shares surged after 2011, when it bought a startup that developed its HCV portfolio. But then Gilead crested and turned down, for a few reasons.

First, competing drugs arrived, pressuring Gilead’s prices. (Gilead spokesman Mark Snyder says “most payers receive substantial discounts,” with the biggest for Medicaid and the Veterans Administration). Second, because Gilead, Merck MRK, +0.01% and AbbVie ABBV, -0.33% are rapidly curing the estimated 2.4 million to 3.5 million HCV carriers — most of whom don’t know they have it — which causes 20,000 annual U.S. deaths. About 650,000 Americans have been cured since modern treatments arrived.

And only 30,000 new cases occur each year, according to the Centers for Disease Control — because blood-donor screenings have eliminated the main cause of transmission. Most of those people got HCV from pre-1992 transfusions. I was one. So demand is already shrinking outside the exchanges.

Indeed, weekly prescriptions for Gilead’s HCV drugs are down 30% in the last year, according to Barclays. Overall sales of $12.4 billion last year, and $8.5 billion this year, will drop to $3.3 billion by 2020, analyst Geoff Meacham says. Similarly, new U.S. HIV infections are down 19% in the last decade.

This is why Washington shouldn’t panic — not about HCV, and not about Obamacare. It’s why headlines like “Obamacare’s Economic Assumptions Collapse” are as silly as claims that inflation is skyrocketing and America is heading for a Greek-style fiscal crisis. That these claims are made by the same people is no coincidence. And it’s why “broke” is in quotes in the headline.

There’s a reason insurers don’t want Obamacare ended. They want cost-cutting mergers like Aetna’s proposed Humana deal, which regulators are blocking, and drug-cost sharing. (Congress will also have to add money to lower subsidized premiums and add moderate-income young people to the risk pool).

The law’s Medicaid expansion helped United’s $30 billion Medicaid-insurance business grow 15% in the second quarter — almost five times United’s losses on Healthcare.gov. They can handle growing pains.

Fixing Obamacare isn’t that hard. It just begins with the hardest Washington task of all: Shutting up, for one minute, to listen.

Videos

  1. Gilead’s Earnings: Diving Deeper Into The Numbers With $84,000 Sovaldi Drug
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Treating Tasla ( by KAREN DE SÁ – San Jose Mercury News)

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A heartbroken story of family or lack thereof.

 

Story

Story by KAREN DE SÁ
Photographs and video by DAI SUGANO 
PUBLICATION: AUGUST 8, 2016

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Pulled from a neglectful home, Tasia Wright remembers the terrifying loneliness of growing up in foster care in Southern California.

There were frequent visits with psychiatrists, and when she met with Dr. Eliot Moon, she remembers getting a sweet, a prescription and being sent on her way.

“I just went to his office, took my piece of candy and let him tell me what medication I’d be on,” recalled Tasia, who said the doctor would tell her the treatment was for “bad behavior.”

“He didn’t ask us why we did what we did, or anything like that.” She felt like “it was set in stone. He has to put you on a med.”

Now 27, Tasia is sharing the story of her emotionally fragile childhood under the care of one of California’s highest prescribers of antipsychotic medications to foster children — the latest installment of the Bay Area News Group’s ongoing investigative series “Drugging Our Kids.”

A new investigation of the prescribing habits of 1,280 doctors and nurse practitioners, published Sunday, showed Moon was among a select group: 120 psychiatrists who were responsible about 50 percent of the time when a foster child received antipsychotics. The powerful psychiatric drugs often come with debilitating side effects for children.

Tasia was 6 when social workers wrested her from a single mother with drug problems. The little girl arrived at the Hillsides residential group home in Pasadena, with a nurse noting in her files that Tasia “appears bright, answers questions, smiles. … Says she has no aches, pains or problems.”

She left the group home 13 years later, morbidly obese, with Type 2 diabetes and medication-induced tremors.

Ties to drug companies

Moon saw Tasia in her teenage years, from 2004 to 2009. In the ensuing years, Moon stood out among psychiatrists who treated California foster youth from July 2009 to July 2014, according to a database of state Medi-Cal benefit claims obtained through a public records request by this news organization. He ranked among the highest prescribers of multiple antipsychotic medications, drugs approved mostly for adults with schizophrenia and other serious mental disorders.

 

The 46 foster children for whom Moon prescribed two or more antipsychotics for two months or longer accounted for a startling 6 percent of the youth who received a similar treatment statewide over the five years the news organization examined. The drugs, especially in combination, place youth at high risk for obesity, diabetes, extreme lethargy and irreversible tremors.

And Moon was among a handful of the state’s highest prescribers who played a role in helping drug manufacturers research antipsychotics and other psychiatric drugs. From a remote region in the Riverside County city of Wildomar, Moon runs Elite Clinical Trials, a firm sponsored by 13 pharmaceutical companies.

Despite a reporter’s visit to that office, along with months of repeated calls, emails and a certified letter, Moon did not respond to questions about his dual roles as high prescriber and drug industry researcher, or his treatment of Tasia.

His firm received $1.2 million in research funding in 2013-2015, according  to the government’s website of drug company disclosures. Elite Clinical Trials is listed on another federal government website as a study location for 25 industry-sponsored trials on mental-health drugs, including 19 that involve children and adolescents.

According to medical records she shared with this news organization, Tasia was prescribed 23 different psychiatric drugs by three psychiatrists, including Moon, while she lived at Hillsides. Moon and Elite Clinical Trials accepted payments from the manufacturers of five of the seven psychotropic drugs he prescribed her: Clozaril, Topamax, Neurontin, Ativan and Zyprexa.

Hillsides CEO Joseph Costa declined to discuss Moon, one of his center’s five treating psychiatrists. But in a written statement that did not address any specifics, Costa described Hillsides’ “medication support” as just one part of an integrated treatment approach, which he said is based on evidence of effectiveness, proven research and measurable outcomes.

“Children are also informed of the medication, which is administered at the lowest effective dose possible,” he said, “and advised that they have a right to refuse medication without fear of consequence.”

‘All she wanted was to be adopted’

Overwhelming sadness compounded Tasia’s deteriorating physical health at Hillsides. As she watched her siblings find adoptive homes one by one, Tasia would get dressed up in donated clothes and wait for visits from her birth mother. But her mom often failed to show. Grief and frustration would turn to anger, at times unleashed on the group home staff. Tasia was often sent to the padded timeout room.

When she was 14 and on three psychiatric drugs, psychiatrist Dr. Elliot Tressan noted how she “had an extremely difficult weekend, violent, unpredictable. Looks sleepy at times but becomes very angry quickly. Dangerously out of control.” He discontinued one drug but added Depakote and the antipsychotic Risperdal.

“She thought if she was bad enough they’d send her back to her mother, but she didn’t know that ‘bad enough’ would turn her into ‘unadoptable’,” said Tonya Beaudet, who adopted Tasia’s sister and spent years taking Tasia home on weekends. “It was just sad, it was so sad — all she wanted was to be adopted.”

Tasia was cheerful at Beaudet’s home, she said, helping in the kitchen and cuddling with her sister. But Tasia would arrive for visits with a zip-lock bag full of pills. Beaudet said she quickly learned which ones not to give her “so she wouldn’t sleep all weekend.”

Tasia was treated by two psychiatrists before she became Moon’s patient. In her first year in the group home, 10 psychiatric drugs were tried — so many that by age 8, a physician’s notes describe Tasia as so sedated she “fell over ‘like a tree’ on way to school.”

Tasia Wright shared more than 13 years of medical records with the Bay Area News Group from her youth growing up in foster care at Hillsides, a residential group home in Pasadena. Documenting a tumultuous childhood, the records provide a glimpse into how psychiatric drugs played a central role in the treatment plan of a girl who arrived at 6 and “appears bright, answers questions, smiles … no aches, pains or problems.” More than a decade later, she left foster care morbidly obese, with Type 2 diabetes and medication-induced tremors.

As a young teen, Tasia Wright was once on as many as five psychiatric drugs. Dr. Eliot Moon eventually tapered her off most of the medications but introduced Clozaril, an antipsychotic designed for treatment-resistant schizophrenics that is rarely used in children younger than 16. From 2004 to 2008, her records show, the doctor increased Tasia’s Clozaril dosages 11 times.

Questionable diagnosis, treatment

In 2002, when she was 12, Tasia was diagnosed as bipolar, although her medical records show little sign of manic episodes or psychosis. Recent studies have found bipolar disorder is misdiagnosed in children at least half of the time.

Moon took over Tasia’s treatment in 2004, shortly after Dr. Tressan died. She was 14 and had gained 45 pounds in four months. She often refused the humiliation of being weighed, because — at 5 feet 4 inches and 250 pounds — “I knew I was fat,” she said. “That’s all I needed to know.”

Notes from Moon’s predecessor described the young girl as “Markedly Zomboid in manner and function.”

And although there are no studies supporting the use of three or more psychotropic medications at once in children, Tasia was on five, including two antipsychotics. Yet her medical records showed little improvement — and no sign of anyone questioning whether another approach might be needed.

Within a month of taking over her care, Moon did depart from the approach of Tasia’s earlier psychiatrists. He questioned her bipolar diagnosis, and added the phrase “NOS,” or not otherwise specified — a term used when patients don’t quite fit diagnostic criteria.

But while he eventually tapered her off almost all of the earlier medications, Moon introduced what psychiatrists reviewing redacted copies of her records for this news organization described as “the biggest gun” available: Clozaril, an antipsychotic designed for treatment-resistant schizophrenics that is rarely used in children younger than 16. A medication of last resort because of its risk of irreversible bone marrow suppression, Clozaril prescriptions cannot be filled without biweekly blood draws. Moon steadily increased Tasia’s Clozaril dosages 11 times from 2004 to 2008, her records show.

One night, for a matter of hours, he agreed to allow Tasia off her meds.

On June 12, 2008, after a 10-minute office visit, he noted in her medical records: “Client is attending grad night this evening and wishes to hold medication so she will not be sleepy. Hold both evening meds for tonight only. (resume both meds on 6/13/08).”

“That was the one time I know of that I stood up for myself and refused my medication,” she said. “I was not about to fall asleep at my prom — that’s embarrassing!

What’s best for the kids’

Hillsides’ main campus in Pasadena — where Moon still works — houses 50 children on a spacious 17 acres with stately cream-colored dormlike cottages, a swimming pool, playground and library. The group home, flanked by palms in an upscale residential neighborhood, is rated a “Level 12” — which means it is not designed to treat the state’s most seriously disturbed children.

Yet Rosa Martinez, who worked at Hillsides as a child care counselor from 2013 until February 2016, said many children took multiple drugs

Martinez said the flow of information that led to the high prescribing often concerned her: The staff would complain in meetings about kids acting out, and a therapist would take those complaints to Moon as prescription recommendations.

“I can understand there are those days where it’s really difficult and very challenging,” she said, “but they’re not thinking about the long-term benefit of the child. What I saw is everybody just trying to get through their shift, versus what’s best for the kids.”

Lorraine Triolo, a Hillsides volunteer and benefactor, had other concerns about prescribing at the group home. After learning of Moon’s ties to drug companies in this news organization’s 2014 investigative series “Drugging Our Kids,” Triolo — a professional photographer who grew close to Tasia throughout her teenage years — began asking critical questions about Moon. Last year, she sent a letter to Costa, the Hillsides CEO, threatening to rescind a five-year, five-figure funding commitment she had made for a new campus construction project.

“It appears to me that there is an ongoing conflict of interest between Dr. Moon, his pharmaceutical vendors and the children at Hillsides,” Triolo wrote Costa. “This conflict leaves children like Tasia vulnerable to inappropriate medication with profound, lifelong consequences. I strongly object to this practice and cannot continue to support or fund the organization until Dr. Moon is removed from your staff, and all future psychiatrists serving at Hillsides do not receive payments from pharmaceutical manufacturers of psychoactive drugs. I hope that you will see this as I do.”

Costa defended Moon and his approach to medication in his correspondence with Triolo, so she withdrew her pledged support.

Triolo insists she has never seen the violent behaviors from Tasia that the staff described, or the psychiatric conditions her doctors seemed to be treating. “In all that time, there was never a moment when I was concerned for my safety,” Triolo said. “She was always a sweet, sensitive kid.”

So, now, Triolo continues to try to help Tasia find a way through life. But it has not been easy.

A terrifying emancipation

In her final days at Hillsides, Tasia was terrified of leaving — weepy and unsure how to function on her own after 13 years in a group home. She also was left saddled with lifelong health problems from the medications she received. “She is a client that will require monitoring closely for many health risks,” a final note from her nurse predicted in 2009.

Since being discharged from the group home, Tasia has been homeless and in and out of jail for minor offenses, living meagerly on monthly $889 disability payments.

In his final visit with Tasia, Moon noted in her medical records she would need endocrinology follow-ups, given that she was barreling into a life with diabetes. She should try to lose weight, count her carbs and monitor her blood sugar, he wrote. Three months earlier, he described her anxious mood “associated with her upcoming emancipation” from foster care, adding: “Yesterday, she had an episode of tearfulness concerning this issue.”

Tasia’s send-off from Hillsides launched new struggles. “I go to counseling, but every time I go, it’s like where do I start? I have childhood trauma that has never been resolved, but now that I’m an adult, it’s like what do I do now?” she said. “I was treated like an adult when I was a child, but now that I’m an adult, I have a ticking time bomb inside me of all the pain that I buried away.”

Closing

Mondays off is usually a good thing.  And, I had the last 4 days off.

The best was spending the day with mum.