FEHBlog

Congress remains out of town for another week.  The FEHBlog is in New York City for another two days. The weather in NYC has been spectacular particularly for late August.

In any event, OPM announced that “Rob Leahy will serve as OPM’s Acting Chief Information Officer (CIO), following the departure of David DeVries on September 2, 2017. Mr. Leahy currently serves as OPM’s Deputy CIO. In addition, OPM Chief Information Security Officer (CISO) Cord Chase will transition into the role of Acting Deputy CIO. It’s surprising that the President has not nominated a new candidate for OPM Director.

While the FEHBlog has noticed that the ACA regulators have provided regulatory relief to health care providers and insurers in the individual market, the FEHBlog does not recall any efforts to provide regulatory relief to group health plans and insurers. It would not take a federal law or regulation. It would just involve repealing some burdensome ACA FAQs. That’s involves as much administrative procedure as tossing a piece of paper into a trash can.

The FEHBlog noticed an odd op-ed in the Wall Street Journal last week.  The op-ed asserts that insurers are continuing to apply pre-existing condition limitations. The ACA like the FEHBP prohibits health plans from limiting coverage at the first time of eligibility. The laws do not limit the use of reasonable medical management techniques like pre-authorization and pre-certification which have in around in the FEHBP and the entire insurance market for decades. Yet the op-ed seeks to redefine those measures as pre-existing condition limitations which is non-sense. The Morning Consult reports that AHIP has come to industry’s defense on this point as well.  Health plans will be unable to play their role in controlling healthcare costs if they are deprived of their tools.

The FEHBlog is in Manhattan with Mrs. FEHBlog caring for their grandson while his parents are out of town. It’s a lovely late summer afternoon in NYC.

The actuarial consulting firm, Aon, reported that

Total budgeted health care costs per employee (including employer premium, employee premium and employee out-of-pocket) are projected to top $15,000 in 2018, up from $14,266 in 2017.

After plan design changes and vendor negotiations, the average health care rate increase for mid-size and large companies was 3.9% in 2017. Aon is projecting that average health care cost increases for mid-size and large companies will be 4.5% after plan design changes and vendor negotiations in 2018.

The Hill reports that the Federal Bureau of Investigation “has arrested a Chinese national in the United States in connection with malware used in the 2015 breach of the Office of Personnel Management (OPM).”

Healthcare Dive tells us about the steps that health plans and providers are taking to improve the accuracy of health plan provider network directories.  Why not require the doctor to inform his or her patients about the networks in which he or she participates. It strikes the FEHBlog that this step would push the ball forward.

Health Day discusses a recent JAMA study of “the price of anti-cholesterol drugs — called PCSK9 inhibitors” which concludes that the current price “would have to be slashed by a whopping 71 percent to be deemed cost-effective.”

Dr. Kim Allan Williams, who was not involved in the study, is past president of the American College of Cardiology. He said some doctors have a difficult time with such studies because they compare patients’ lives and “events” — such as heart attack and stroke — versus dollars spent on these medicines.
The new study doesn’t change his view of the value of the PCSK9 inhibitor class.
“No one’s giving those drugs unless the patient is incapable of getting to the target [level of LDL cholesterol],” said Williams, who is chief of cardiology at Rush University Medical Center in Chicago. “You’re only going to use it for a situation where you have no choice.”
Because the study is based on list prices, not what patients actually pay, it’s also “difficult to analyze the cost-effectiveness when [you] don’t know exactly what the cost is,” Williams added.

OPM should be wrapping up 2018 benefit and rate negotiations with carriers by now. The Washington Post reminds us that the 2018 Federal Benefits Open Season is set to occur from November 13 to December 11, 2017. The Post notes that “Premiums typically are announced earlier, in September. Increases have averaged about 7 percent the past several years — but remember, those are averages, and a given plan’s numbers can be much higher or lower.” The government contribution toward FEHBP coverage is 72% of the enrollment weighted average premium capped at 75% of the selected plan’s premium.  As a general rule of thumb, if your selected plan is under that cap, then the lion’s share of that year’s rate changes usually are shielded from the enrollee.  If your plan is over that cap, premium increases and decreases are quite visible. As the FEHBlog has noted, the wild card affecting this year’s premiums is whether Congress will continue to suspend or repeal the onerous and really senseless health insurer tax.

In a bit of good news, Senator Charles Grassley (R Iowa) announced that

The Over-the-Counter Hearing Aid Act became law as part of the Food and Drug Administration (FDA) Reauthorization Act.  The bicameral measure requires the FDA to write regulations ensuring that the new category of over-the-counter hearing aids meets the same high standards for safety, consumer labeling and manufacturing protections as all medical devices, providing consumers the option of an FDA-regulated device at lower cost.

This new category once implemented will bring down the cost of hearing aids for consumers.

In other good news, Healthcare Dive reports that the large Blues-licensed health insurer Anthem announced that

It reached its goal of reducing filled opioid prescriptions by 30% earlier than it initially planned. 

The company had originally set the goal among its affiliated health plans with a target of achieving it by 2019. The idea was to limit the quantity of opioid prescriptions in order to prevent accidental addiction and opioid use disorder. 

Anthem had already taken steps such as limiting coverage for newly prescribed short-acting opioids to seven days. That policy, rolled out in October 2016, applied to all individual, employer-sponsored and Medicaid plan members—with the exception of those receiving palliative care or who have sickle cell anemia or cancer. 

It also implemented a prior authorization policy for long-acting opioids starting in September 2016, and has set up a system that alerts providers about members who may be at risk for an opioid use disorder.

In other news,

• Healthcare Dive also tells us that healthcare provider groups generally were pleased by CMS’s proposed Medicare Part B / MACRA payments to doctor rule. Hopefully, CMS’s efforts to relieve regulatory pressure on providers will encourage doctors to stay in or even rejoin Medicare Part B.
• Also on the Medicare front, the Chicago Sun Times reports that nearly 575,000 Medicare beneficiaries used the new end of life counselling benefit in 2016.

Nearly 23,000 providers submitted about $93 million in charges, including more than $43 million covered by the federal program for seniors and the disabled.

Use was much higher than expected, nearly double the 300,000 people the American Medical Association projected would receive the service in the first year.

That’s good news to proponents of the sessions, which focus on understanding and documenting treatment preferences for people nearing the end of their lives. Patients and, often, their families discuss with a doctor or other provider what kind of care they want if they’re unable to make decisions themselves.

• One of the few provisions in the ACA that expressly references the FEHBP permits employers to raise premiums by up to 30% for non-compliance with wellness programs and up to 50% for non-compliance with smoking cessation programs.  The Equal Employment Opportunity Committee (EEOC) issued rules implementing this provision.  Fierce Healthcare reports that a federal district judge in DC ruled earlier this week that 

The EEOC has “failed to provide a reasoned explanation” for its decision to adopt the 30% incentive levels in the two rules. “Neither the final rules nor the administrative record contain any concrete data, studies or analysis that would support any particular incentive level as the threshold past which an incentive becomes involuntary in violation of the ADA and GINA,” he added.  

But because vacating the rules would “have significant disruptive consequences” for employers that have already adopted wellness programs that offer participation incentives, Bates ordered the rules remanded to the EEOC for reconsideration.

OPM believes that the government contribution calculation rule in the FEHBA (5 USC Sec. 8909) effectively preempts the agency from allowing carriers to use these brickbat incentives. 

Congress is out of town for two more weeks. The President returns from his working vacation today.

The FEHBlog noticed on Friday or Saturday that Modern Healthcare had issued its annual list of top 100 healthcare influencers. For several years running, the President has been the number one influencer. This year, however, the new President is ranked seventh just after the House Speaker and the top three, as the FEHBlog expected because Modern Healthcare is vocally pro-ACA, are the Republican Senators with their fingers in the dike to block the repeal and replace effort. The list is interesting but a mish mosh at the end.

FedSmith.com features an article about temporary continuation of coverage under FEHBP.

If you depart from Federal Service, you could be eligible for Temporary Continuation of Coverage (TCC) for up to 18 months under the Federal Employee Health Benefits (FEHB). Temporary Continuation of Coverage exists as a feature of the FEHB Program. It lets certain former employees temporarily continue their FEHB coverage after regular coverage ends. However, they must exhaust TCC eligibility as one condition for guaranteed access to individual health coverage. This is according to the Health Insurance Portability and Accountability Act of 1996 (HIPAA). 

Temporary Continuation of Coverage enrollees are required to pay the full premium for any plan they select. In other words, a former employee will have to pay both the employee and the government shares of the premium. In addition, they must pay a 2% administrative charge.

The article omits an important fact. If you lose your FEHB coverage, you can bypass TCC pick up coverage in the ACA healthcare marketplace. Indeed particularly if you are not high earner, it’s in your best interest to find out whether you can get a better deal than TCC in the ACA marketplace — healthcare.gov. The catch is that FEHB coverage typically ends 31 days after the date on which coverage otherwise would terminate (except in the case of a cancellation).  TCC coverage can begin on that date.  ACA marketplace coverage begins on the first day of the following month if you select a plan in the first 15 days of the month; if you make your selection in the second half of the month then your ACA coverage begins on the first day of the next following month.

What’s more with TCC you don’t have to stay with your last FEHB plan as an employee, you can switch to a lower premium plan if you like because you have the rights of an FEHB enrollee.

The article was valuable to the FEHBlog because it includes a list of folks who are not eligible for TCC, which is somewhat narrower in scope than it’s private sector analog, COBRA. Those people are eligible for ACA marketplace coverage. For more details on TCC, check out this OPM website.

Federal News Radio reports that Senator Ron Johnson (R Wisc), who chairs the Senate’s Homeland Security and Governmental Affairs Committee, “has renewed his effort to find out from the Office of Personnel Management why members of Congress and their staff continue to receive an employer contribution toward their health coverage.”  Back in 2013, the FEHBlog was quoted in the New York Times as doubting that OPM had the authority to do what it wound up doing — issuing “an agency rule that has let members of Congress and their staff buy health insurance on the Small Business Health Options Plan (SHOP) exchange since 2014” with the FEHBP government contribution. In the FEHBlog’s view in 2013 and now, the straightforward approach would be for Congress to appropriate funding for the required coverage. The ACA is a whacky law.

In the no good deed goes unpunished department, the American Medical Association is criticizing the prescription benefit manager Express Scripts for putting tighter controls on dispensing opioids, according to the Washington Examiner.

Under the new [Express Scripts] plan, first-time opioid users will not be able to receive more than seven days of prescription painkillers, even if the doctor requests a longer prescription. Snezana Mahon, Express Script’s vice president of clinical product development, told the Associated Press that a study the company conducted showed opioid prescriptions are written for an average of 22 days.
Most doctors also prescribe long-acting opioids, but the new plan will limit prescriptions to short-acting drugs and limit the dosage. Express Scripts plans to monitor prescribing data to see if patients are “pill shopping,” meaning going to different doctors’ offices to stock up on the same medication.
The program is similar to one by its competitor CVS Caremark, which limits opioids to a 10-day supply and restricts the dosage.

Makes sense to me but the FEHBlog is a JD, not an MD.

The Boston Globe’s STAT reports on a federal government settlement with Mylan over an Epipen pricing issue. The key point is that it’s a Medicaid settlement which does not directly benefit the FEHBP.

Prof. Tim Jost’s ACA blog on Health Affairs tell us the latest on the federal court lawsuit over the ACA’s non-discrimination rule, PHSA Sec. 1557:

On August 16, 2017, Judge Reed O’Connor entered an order in the Franciscan Alliance case requiring the government to file a status report on or before October 16, 2017 and every 60 days thereafter. The Franciscan Alliance and several other plaintiffs, including several states, have sued challenging a HHS regulation promulgated under section 1557 of the Affordable Care Act prohibiting discrimination on the basis of gender identity or termination of pregnancy.
Late in 2016, Judge O’Connor, a federal district court judge in Texas, entered a preliminary injunction against the enforcement of the rule. On July 10, 2017, Judge O’Connor remanded the issue to HHS to reconsider its rule. HHS stated in an August 4 status report that it has submitted a draft proposed rule amendment to the Justice Department for review. Following that review, the rule will be submitted to the Office of Management and Budget for interagency clearance, after which it will be published for comment as a proposed rule. Until then, HHS will continue to comply with the injunction against enforcement of the challenged provisions of the rule. The court will continue to monitor the rulemaking process.

Finally, the Wall Street Journal’s Numbers columnist weighs in on the government’s new computer password guidance, which the FEHBlog noted a few weeks ago.

The new guidelines issued in June by the National Institute of Standards and Technology suggest that a string of random words—warning: song lyrics and the like aren’t random—will be harder to guess than “princess” and easier to remember than “fKB%397x^tyM0dc.”

“The advantage to a passphrase is it’s longer,” said Matt Bishop, co-director of the Computer Security Laboratory at the University of California, Davis, who advised thinking of a passphrase, then sprinkling it with special characters, as in “correct=horse+battery&staple!”

“That’s by no means unguessable,” he said, “but it increases the number of guesses an attacker would have to make.” To make it even harder to guess (but also harder to remember) he said he might misspell or alter the words.

Interesting article.

For the past couple of days, the FEHBlog has been visiting St. Michael’s MD on the Eastern Shore. Lovely place. The town’s website recounts

During the War of 1812, St. Michaels gained its name as “the town that fooled the British”. The residents of St. Michaels, having been forewarned that British barges were positioned on the waters to attack with cannon fire, hoisted lanterns into the trees above the city. This first successful “blackout” fooled the British into overshooting the town’s houses and shipyards. Only one house, forever since known as Cannonball House, was struck. 

Ah, American ingenuity. But time marches on.

Yesterday, the Centers for Medicare and Medicaid Services announced, no doubt to the relief of hospitals and doctors, that it is proposing to roll back the Obama Administration’s mandatory joint reduction payment pilot and cancelling two other pilots scheduled to begin next year — the Episode Payment Models (EPMs) and the Cardiac Rehabilitation (CR) incentive payment model.  The CMS press release explains

Changing the scope of these models allows CMS to test and evaluate improvements in care processes that will improve quality, reduce costs, and ease burdens on hospitals,” said CMS Administrator Seema Verma. “Stakeholders have asked for more input on the design of these models. These changes make this possible and give CMS maximum flexibility to test other episode-based models that will bring about innovation and provide better care for Medicare beneficiaries.”
Moving forward, CMS expects to increase opportunities for providers to participate in voluntary initiatives rather than large mandatory episode payment model efforts. The changes in the proposed rule would allow the agency to engage providers in future voluntary efforts, including additional voluntary episode-based payment models.  

Today CMS announced the launch of its Hospice Compare website.  “The Hospice Compare site allows patients, family members, caregivers, and healthcare providers to compare hospice providers based on important quality metrics, such as the percentage of patients that were screened for pain or difficult or uncomfortable breathing, or whether patients’ preferences are being met. Currently, the data on Hospice Compare is based on information submitted by approximately 3,876 hospices.”

Finally, the Minneapolis Star Tribune reports that earlier today United Healthcare announced that its CEO, Stephen Hemsley, “is leaving the job next month and will be succeeded by Dave Wichmann, the company’s president.”

During Hemsley’s tenure, [which began in 2006] UnitedHealth’s workforce grew from 58,000 to more than 260,000, including 17,000 in Minnesota. Revenue grew from $71.5 billion to an estimated $200 billion this year. At the end of June, more than 49 million people had health insurance coverage from UnitedHealth Group.
Before taking the top job, Hemsley was chief operating officer and guided the company’s reorganization into the two key businesses it operates today — the legacy health insurance business called UnitedHealthcare and the fast-growing health services business called Optum.

Impressive.

Congress remains out of town this week. Yesterday, the President signed into law a bipartisan bill which according to the Washington Examiner

provides funding for veterans who seek treatment from a private doctor in certain cases. It also allows the Veterans Affairs department to lease 28 new facilities around the country, in an attempt to expand access to government-provided care. That makes it a compromise in the larger debate between conservative and liberal proponents of VA reform.

Speaking of bipartisan legislation, Avik Roy shares his observations here on what Congress should do to stabilize the ACA health insurance marketplace.

With the failure of Republicans’ health care effort, some Senate moderates are looking to prop Obamacare up with additional taxpayer funds. There’s a case to be made for a short-term bailout of Obamacare—but only if it’s accompanied by serious reforms that liberate consumers from the law’s rising health insurance premiums.

The FEHBlog heartily agrees. It’s a good piece.

Meanwhile, medical groups are complaining about rising regulatory burdens (amen to that).

• Modern Healthcare reports that “The benefits coming from the CMS’ [punitive] Hospital Readmissions Reduction Program [created by the ACA] have slowed enough that some industry experts and hospital leaders say it may be time to retire the program.  Also, “[a] major complaint about the program has been that readmissions rates aren’t easy for a hospital to control.” That’s just common sense.
• Healthcare Data Management reports that “The vast majority of physician practices are finding it difficult to comply with the [Medicare’s new but Obama era] Merit-Based Incentive Payment System and are facing several other critical health information technology challenges that are making it difficult to provide timely, quality patient care.  That’s the main finding of a new survey by the Medical Group Management Association, which found that 82 percent of practices see MIPS as very or extremely burdensome, 74 percent view the lack of national electronic attachment standards as similarly detrimental, while 68 percent likewise perceive the lack of EHR interoperability as debilitating.”  CMS has been struggling to create a HIPAA electronic attachment standard for over a decade. For a handy update on HIPAA implementation, check out this May 1, 2017, NCVHS annual report to Congress. HHS and Congress messed up by not providing for electronic health record interoperability when Congress funded $32 billion to provide hospitals and doctors with those systems. 

Finally, Kaiser Health News discusses the relationship between obesity and depression. It’s an important issue because many people are faced with both health problems. According to the article 43% of people with depression are obese.

While on the surface the two conditions appear very different, they share important similarities. Both are chronic diseases that are tricky to treat, requiring long-term physical and mental health interventions.
In cases in which depression and obesity coincide, those interventions can be even more complex, with research often showing the best results when care involves not only doctors and nurses but also other health professionals such as dietitians, behavioral health specialists and physical therapists.
“We need to find synergistic therapies — or it’s going to be the same kind of messy system in which we spend a lot of money and don’t get any return,” said William Dietz, the director of George Washington University’s Sumner M. Redstone Global Center for Prevention and Wellness, who researches obesity interventions.

The Hill reports that President Trump plans to declare the opioid crisis a national emergency, which will open up additional sources of funding. “So far, six states [including the FEHBAR’s state Maryland] have declared statewide emergencies for the opioid epidemic and used the declaration to help increase access to the opioid overdose reversal medication, naloxone.” More details on the federal declaration should become public next week.

On the ACA front, the American Journal of Managed Care warns that “With ACA Repeal on Hold, Return of Health Insurance Tax Worries Business Groups.” Well, it worries the FEHBlog too because this ACA tax, which Congress held in abeyance for 2017 only, slams the FEHBP. “The new report by Oliver Wyman estimates that the tax will increase premiums by 2.6% in 2018, and between 2.5% and 2.7% in later years when amounts collected are tied by law to premium trends.”  While this tax is one of the whackiest aspect of the ACA, the skinny repeal and replace bill which got shot down did not repeal it. The only ACA tax which that bill would have eliminated was the medical device tax, which even Sen. Elizabeth Warren opposes. In contrast the House bill would have eliminate or delayed all of the ACA’s multitude of taxes.  The Health Affairs blog posted the suggestions of two American Enterprise Institute scholars for a bi-partisan resolution of the health care mess.

The Wall Street Journal reports today that

Since the start of the [21st] century, it has become more dangerous to have a baby in rural America. Pregnancy-related complications are rising across the U.S., and many require specialized care. For some women, the time and distance from hospitals with the resources and specialists to handle an obstetric emergency can be fatal. The rate at which women died of pregnancy-related complications was 64% higher in rural areas than in large U.S. cities in 2015. That is a switch from 2000, when the rate in the cities was higher, according to Centers for Disease Control and Prevention data analyzed by The Wall Street Journal.

The reasons reflect shrinking resources, worsening health and social ills. Most rural hospitals don’t have high-risk pregnancy specialists who can treat sudden complications. Many don’t have cardiologists or anesthesiologists on staff. Making matters worse, rates of obesity, a major risk factor for pregnancy complications, are higher in rural than urban areas.

Many rural hospitals have eliminated labor and delivery services, creating maternity deserts where women must travel, sometimes hours, for prenatal care and to give birth.
The number of rural hospitals that offered such services fell by 15% from 2004 to 2014, the Journal found in an analysis of Centers for Medicare and Medicaid Services data. That compared with a 5% decline among urban and suburban hospitals. Driving the changes are factors including closing of medical facilities, a decline in birthrates and the difficulties of getting malpractice insurance.

There are reported cases of pregnancy-related deaths that might have been avoided if the women were closer to hospitals with a higher level of care, said William Callaghan, chief of the maternal and infant health branch at the CDC.

The maternal death rate is 2.02 per 100,000 in small towns and rural areas vs. 1.23 deaths per 100,000 in urban and suburban areas.

On the bright side, Health Care Dive tells us that

• During its second-quarter earnings call on Tuesday, CVS Health said it plans to expand its MinuteClinic program to help people with chronic diseases.
• CVS is extending a test program that targets diabetes patients to help them monitor glucose levels, medication adherence and lifestyle habits.
• The company also wants to add programs to manage asthma, hypertension, high cholesterol and depression over the next two years.

The FEHBlog nearly launched out of his breakfast nook yesterday when he read in the Wall Street Journal that the government has changed the computer protection password rules in NIST Special Publication 800-63-3, issued June 22.  Of course, we are all familiar with the existing requirements — 8-20 characters, at least one capital letter, one number, one special character and revise it frequently. Under the new rules,

Long, easy-to-remember phrases now get the nod over crazy characters, and users should be forced to change passwords only if there is a sign they may have been stolen, says NIST, the federal agency that helps set industrial standards in the U.S.

Academics who have studied passwords say using a series of four words can be harder for hackers to crack than a shorter hodgepodge of strange characters—since having a large number of letters makes things harder than a smaller number of letters, characters and numbers. 

In a widely circulated piece, cartoonist Randall Munroe calculated it would take 550 years to crack the password “correct horse battery staple,” all written as one word. The password Tr0ub4dor&3—a typical example of a password using Mr. Burr’s old rules—could be cracked in three days, according to Mr. Munroe’s calculations, which have been verified by computer-security specialists.

Live and learn.

The International Foundation of Employee Benefit Plans reports that the IRS has posted for public comments draft Forms 1095B and C that are used to report employee compliance with the individual mandate and employer compliance with  the employer mandate on employers with 50 full time employees or more.  The FEHBlog thought that we would be done with this by now.

The National Business Group on Health yesterday released its annual survey of large employers on health care costs.  Those employers are expecting a 5% bump in costs in 2018.  The FEHBlog notice the following tidbit in the press release:

Telehealth utilization surging:  Virtually all employers (96%) will make telehealth services available in states where it is allowed next year. More than half (56%) plan to offer telehealth for behavioral health services, more than double the percentage this year. Telehealth utilization is on the rise, with nearly 20% of employers experiencing employee utilization rates of 8% or higher.

Employee utilization still seems low.

Med City News informs us that U.S. News and World Report has issued its annual hospital survey.   “Unsurprisingly, this year’s Honor Roll is practically a recycling of last year’s major players.”

Beckers Hospital Review informs us about a Protenus survey of health care data breaches. Here are few tidbits from that survey:

• The two most common causes of breaches were hacking (53 percent) and insider wrongdoing or error (41 percent).
• Eighty percent of data breaches in the first and second quarters were reported by healthcare providers, as opposed to health plans (11 percent) or third-party vendors (6 percent).
• It took organizations an average of 325.6 days to discover a breach.

Finally, Highmark, a Pennsylvania based Blue Cross licensee, announced today that

Centerbridge Partners, L.P. (Centerbridge) and HVHC Inc. (HVHC), a wholly-owned subsidiary of Highmark Inc. (Highmark), today announced that they reached a definitive agreement, whereby Centerbridge will purchase Davis Vision, Inc. (Davis Vision), HVHC’s managed vision care subsidiary. As part of the agreement, Davis Vision will be combined with Centerbridge’s existing managed vision care portfolio company, Superior Vision, and Highmark will acquire a minority ownership interest in the combined Davis Vision-Superior Vision company.
In a separate transaction, Centerbridge will acquire a minority equity stake in Visionworks, HVHC’s optical retail subsidiary. Highmark will retain a controlling ownership interest in Visionworks.
The transactions are expected to close in the fourth quarter of 2017, subject to regulatory approval.

As previously noted, Congress is out of town until September 5.

Becker’s Hospital Review updates us on the five largest publicly traded health insurance carriers’ second quarter 2017 financial reports. Here’s a link to not-for-profit Kaiser Permanente’s report on its second quarter earnings.

Drug Channels tells us about the large prescription benefit managers recent announcements of their 2018 formulary changes.

The Wall Street Journal had three illuminating articles on the prescription drug market over the past couple of days:

• On Friday, the Journal reported that 

AbbVie announced Thursday [August 2] it has received Food and Drug Administration approval to sell its next generation hepatitis C drug, Mavyret.  AbbVie said in a statement that up to 95% of hepatitis C patients in the U.S. will be eligible to take Mavyret. The drug will cost $26,400 for a standard course of treatment before rebates and discounts. That’s well below the list price of older drugs from AbbVie, Merck & Co. and Gilead Sciences .   Most treatments currently on the market require 12 weeks of treatment, but AbbVie expects most patients will be able to finish treatment with Mavyret in eight weeks.

• Also on Friday, the Journal reported that 

U.S. generic-drug prices are falling at the fastest rate in years, eating into the profits of pharmaceutical wholesalers and manufacturers alike and erasing billions of dollars of their market value in recent days.
The three largest U.S. drug wholesalers, which warehouse and distribute some $400 billion of pharmaceuticals annually, have been competing aggressively to win business among independently owned pharmacies, largely by agreeing to cut prices on generics. In turn, the wholesalers are squeezing drugmakers for better prices.
The trend has been good for the employers and government programs that ultimately pay for drugs, and for independently owned pharmacies, the mom-and-pop operators that compete with national chains. But it is taking a hard toll on wholesalers and generic-drug makers.

•  Today, the Journal reported that the Epipen remains dominant in a now competitive market. 

[M]ore than seven months after the introduction of the generic, the more expensive brand-name EpiPen still accounts for more than one-quarter of the market, according to Bernstein Research, even though a brand-name drug’s sales usually shrink significantly after low-cost competition arrives.
One reason, according to multiple people familiar with the drug industry, is that a middleman can profit from the sale of pricier medicines, such as EpiPen. In the murky world of the U.S. drug-supply chain, higher prices can mean a bigger piece of the pie for middlemen such as pharmacy-benefit managers. There is no way to know exactly how much, however, because the amount a PBM makes is laid out in confidential contracts.

The articles illustrate that a competitive presciption drug market exists in the U.S.  Bear in mind that most prescriptions are for generic drugs and that OPM requires that the nationwide FEHB plans and other experience rated plans use fully transparent pricing — all of the rebates go back to the plan’s reserves held in the U.S. Treasury. So the Epipen problem does not impact the FEHBP by and large.