Mid-week update

The FEHBlog regrets the one day delay in the mid-week update but he was on medical leave yesterday.

The 2015 government contribution for FEHBP coverage will be announced next month. Yesterday the actuarial consulting firm Towers Watson reported that U.S employers expect heath care costs to rise 4% in 2015. Bear in mind that most large employer coverage in the U.S. is self funded by the employer and therefore not subject to the ACA’s onerous health insurer fee. That fee does apply to FEHBP plans that are carried by insurance companies or HMOs and will jack the premium up a couple of extra points. Cost curve up.

In a bit of good news AIS reports that  

Although the FDA has yet to approve a product through the 351(k) biosimilar pathway, multiple follow-on drugs are working their way through the pipeline, noted Kate Keeping, senior director of biosimilars research for BioTrends Research Group at a June 30 webinar sponsored by the company.
“The United States is the only developed market to have no biosimilars, but development is ramping up,” Keeping said. As of June, 23 biosimilar products were in U.S. clinical trials, and as of April, 42 biosimilars were in development-phase meetings. According to Keeping, “Several Phase III biosimilar trials started this quarter,” including two for Herceptin (trastuzumab) biosimilars for early breast cancer, two for Humira (adalimumab) biosimilars for rheumatoid arthritis and one for Enbrel (etanercept) for RA and psoriasis.

Interestingly, the Wall Street Journal opinion page (with which the FEHBlog generally agrees) objects on free market grounds to AHIP’s and other’s criticism of Gilead Science’s $84,000 per treatment pricing decision for its biologic drug Sovaldi that cures most cases of Hepatitis C. The FEHBlog applauds this innovation. He does think that the price, which sits on top of another require drug priced at $55,000 per treatment, is just too damn high. What’s more health care is not a free market because there are government price controls to benefit DoD, the VA, Medicaid, etc. and health insurance including the FEHBP acts a a price support. Gilead never could charge $84,000 without the availability of health insurance. So it shouldn’t require more government price controls to force Gilead to haul down the pirate flag. A conscience / desire to avoid killing the golden goose would suffice. 
An interesting ACA trend has been the development of narrow networks for the ACA exchange or market place plans. The FEHBlog thought these narrow networks would never fly with people who were used to having health insurance but could work for the people without insurance for whom the exchanges were created.. Plus the narrow networks would help control costs. However, the consumer groups have hammered on the exchange plans with narrow networks. The FEHBlog noticed this LA Times article about a California lawsuit brought against Anthem over its use of narrow networks in the California exchange.  No good deed goes unpunished.