Happy 4th of July Weekend

The FEHBlog is certainly glad that he vacationed on the Outer Banks last week and not this week. Here’s the hurricane that is now looming over that coast.

In response to the FEHBlog’s recent report that OPM has given FEHB plans its approval to cover gender reassignment surgery, a reader inquired when federal and postal employees and annuitants will learn which plans will be offering that coverage for 2015. FEHB plans typically disclose their benefit packages in mid to late September when OPM announces the next year’s government contribution amount.  The FEHBlog expects that LGBT publications will gather that information for their readers.

In furtherance of the FEHBlog’s point that the ACA’s mandate to provide “free” preventive care has raised costs for everyone, the WSJ’s Pharmalot blog reports that the ACA mandate has given a boost to vaccine prices.

One example is Prevnar 13, which prevents diseases caused by pneumococcal bacteria, and requires multiple shots priced at $136 each, with every child in the U.S. required to get four doses before entering school. The Prevnar line generated $4 billion in revenue last year. Michael Haydock of the Datamonitor Healthcare consulting firm, tells the [New York] Times “it’s expensive in part because it’s a very effective vaccine and also because they’re exploiting their monopoly.”

Although the vaccine has not changed, the cost has risen an average of 6 percent each year since its 2010 FDA approval, the Times writes. “You have to make back your investment and pay your shareholders, but at what point do you say, ‘Look, you’ve had your steak, gravy and potatoes and this is enough?’” Steven Black, a vaccine expert at Cincinnati’s Children Hospital, tells the paper. He was on the government panel that recommended children get an earlier Prevnar 7 version.

That blog also reports that several prescription benefit managers, in particular Express Scripts, have begun excluding an assortment of ointments, creams, and powders that compounding pharmacies use to make topical treatments.

For instance, the average cost for each prescription rose to $1,100 from $90, and for about a dozen such medications, the actual cost jumped by more than 1,000%. Consequently, the amount spent by its clients for compounded drugs increased to roughly $171 million in this year’s first quarter, up from $28 million during the comparable period in 2012.

“It’s an issue of waste,” says Glen Stettin, senior vice president for clinical, research and new solutions. “For nearly all of these products, there’s already a commercial preparation already available – a generic or brand-name product approved by FDA. And there is no evidence to support their use at all.”


It’s nice to read other publications supporting your point of view. The RxObserver joins the FEHBlog on the bandwagon demanding that the Food and Drug Administration finally create a regulatory pathway for biosimilar drugs.

The European Union first established a clear biosimilars pathway in 2004.   Biosimilars are available in 27 industrialized nations – including Japan, Germany, the United Kingdom, France, and Canada – but have been effectively denied to American patients through a combination of bad policy and brand pharma-initiated roadblocks.  Express Scripts, a large pharmacy benefit manager, recently projected that biosimilars could yield $250 billion in savings by 2024 alone if the top 11 biosimilars candidates came to market.

And the Hill is reporting that at a recent conference a  Cal Berkeley economics professor James Robinson endorsed reference pricing.

Finally Becker’s Hospital Review provides a list of the top 50 non-profit hospitals ranked based on gross revenues. The winner is the University of Pittsburgh Medical Center with over $12 billion in revenue. The Pittsburgh Post Gazette reports that on settlement of a long standing dispute between UPMC and the local Blue Cross carrier Highmark.

Have a great weekend.