Type 2 diagnoses propel diabetes epidemic
WASHINGTON —Diabetes quickly has grown into one of the top disease epidemics in the United States, with the American Diabetes Association estimating it to affect close to 24 million Americans. Growth mostly has occurred among those with Type 2 diabetes.
A report by the Agency for Healthcare Research and Quality helped show what the epidemic looks like on the ground. According to the report, released last month, there were more than 7.7 million hospital stays for patients with diabetes in 2008, resulting in $83 billion in hospital costs, or 23% of total hospital costs.
Class and geography had a lot to do with hospitalization rates, according to the report. When broken down by ZIP code, rates were higher in low-income areas than in high-income areas, with 3,232 hospitalizations per 100,000 people in the lowest-income areas, compared with 1,762 per 100,000 people in those areas with the highest incomes.
Among U.S. regions, the South had the highest rates, with 2,829 per 100,000 people hospitalized, while the West had the lowest, with 1,866 per 100,000 hospitalized. Not surprisingly, according to the Centers for Disease Control and Prevention, the South and West also have the highest and lowest rates of obesity, respectively, a major factor in the rise of Type 2 diabetes. Eight-of-the-9 states with obesity rates more than 30% as of 2009 are in the South, while 9-of-the-17 states with rates less than 25% are in the West, including Colorado, the only state in which fewer than 20% of residents are obese.
Top 10 most common principal reasons for hospitalization among patients with diabetes in 2008
|RANK||PRINCIPAL DIAGNOSIS||#OF HOSPITAL STAYS AMONG PATIENTS WITH DIABETES*||%OF HOSPITAL STAYS WITH DIABETES AS A COEXISTING CONDITION†|
|2||Congestive heart failure (nonhypertensive)||424,147 (5.5%)||41.6%|
|3||Coronary atherosclerosis (hardening of the arteries)||346,054 (4.5%)||37.7|
|6||Acute myocardial infarction (heart attack)||220,760 (2.9%)||34.2|
|7||Chronic obstructive pulmonary disease and bronchiectasis||219,743 (2.8%)||30.7|
|8||Nonspecific chest pain||212,706 (2.8%)||29.3|
|9||Cardiac dysrhythmias||196,293 (2.5%)||24.6|
|10||Complication of device, implant or graft||194,516 (2.5%)||28.4|
Sorry, FTC: ‘Pay-for-delay’ isn’t going away
WHAT IT MEANS AND WHY IT’S IMPORTANT This week’s decision by the U.S. Second Circuit Court of Appeals could make political efforts to ban generic-branded patent settlements a lot more difficult.
(THE NEWS: Appeals court upholds decision to OK ‘pay-for-delay’ deals. For the full story, click here)
The Federal Trade Commission in particular, not to mention some members of Congress like Sen. Herb Kohl, D-Wis., has fought hard against so-called “pay-for-delay” settlements between branded and generic drug companies, contending that they delay patients’ access to generic drugs and cost consumers billions of dollars every year.
The concerns of opponents are understandable. Because generic and branded drug makers are supposed to be competitors, what seem on the surface like sweetheart deals must look positively Faustian to many people. But the judges in the appeals court affirmed that whatever their appearance, patent settlements don’t violate antitrust laws.
And the facts seem to support that decision. According to a report released in January by RBC Capital Markets, generic drug companies prevailed in 76% of cases that included settlements, but only in 48% of cases that went to trial. Meanwhile, according to a report released the same month by securities and investment banking firm Jefferies & Co., on average, patent settlements result in generic launch three years before patent expiration. Legally, a generic drug company must launch its version of a drug before or at the time of patent expiration.
While patent settlements often involve some type of monetary transaction, in many cases, the “pay” is in the form of a promise by the branded drug company not to launch an authorized generic, which is the branded drug sold under its generic name at a lower price. Under the Hatch-Waxman Act, the first generic drug maker to launch a knockoff of a branded drug is entitled to six months in which to compete directly with the branded version, but the authorized generic allows the branded drug maker to undercut the generic drug maker by marketing a supposedly “generic” version of its own.
Authorized generics have seen a bit of a pickup as well, and more activity on that front can be expected. On Tuesday, Greenstone, the generics arm of Pfizer, announced that it would create a new business called the Authorized Generics Alliance in order to market authorized generics under the Greenstone label.
Medicaid plans to end onerous AMP rules
WHAT IT MEANS AND WHY IT’S IMPORTANT It’s about time.
(THE NEWS: NACDS, NCPA in joint statement praise CMS’ move to withdraw provisions of AMP rule currently blocked by injunction. For the full story, click here)
The White House, or more specifically the Centers for Medicare and Medicaid Services’ division of Health and Human Services, announced in recent days that it plans at last to scrap its controversial and burdensome pricing policies for generic drugs bought by retail pharmacies to dispense to Medicaid patients. If CMS’ newly proposed rule goes through, it will mean the end of the current, much-disputed provisions that define the average manufacturer price of Medicaid me-too medicines.
The proposed rule, to quote the National Association of Chain Drug Stores, calls for “the withdrawal of existing provisions that define AMP, that determine the calculation of federal upper limits [FULs], and that define ‘multiple source drug.’”
As currently defined, Medicaid’s payment model for reimbursing pharmacists to dispense generics is based on a flawed formula for determining what retail pharmacies pay for those medicines, as determined by a set of controversial market metrics.
The current AMP policy almost is a guarantee that retail pharmacies would lose money on nearly every Medicaid generic prescription they dispense. It’s only a temporary court injunction that has thus far kept that new formula from being imposed.
Thus, CMS’ turnabout marks a real victory for the chain and independent pharmacy lobby, which has bitterly contested the AMP reimbursement formula since it was made policy by the Bush administration more than three years ago. But the plan to withdraw the current AMP model doesn’t end the long battle by pharmacy for a fair payment policy for dispensing generic drugs to Medicaid beneficiaries.
What the pharmacy industry –– and the U.S. healthcare system itself, for that matter –– need is a permanent solution to the Medicaid reimbursement mess. And that solution can only be achieved by congressional action and enactment of a new law governing Medicaid.
The 2010 health-reform law goes part way toward that solution, by holding the line on pharmacy cuts and setting the FULs on Medicaid prescription payments at no less than 175% of cost. It also includes what NACDS president and CEO Steve Anderson calls “a much-improved definition and calculation method for AMP” that will “better approximate pharmacies’ costs for purchasing generic drugs.”
Anderson said the injunction lawsuit filed in 2007 by NACDS and its independent pharmacy counterpart, the National Community Pharmacists Association, has saved pharmacy more than $5.3 billion in cuts since a federal court blocked the imposition of the new AMP formula in January 2008. It also may have prevented the closing of more than 11,000 community pharmacies that otherwise would have been forced to dispense Medicaid scripts at a loss or stop serving lower-income patients.
“When we filed the lawsuit in 2007, we knew that patient care was at stake,” Anderson asserted.
The bottom line is that the White House and Congress need to establish a federal payment system that rewards –– rather than penalizes –– pharmacies for dispensing lower-cost generics that provide the same safety and efficacy profiles as higher-cost pioneer medicines. Such a permanent fix would be a win both for the pharmacy industry and the American taxpayer, by saving tens or even hundreds of billions of dollars over the long term in federal health costs.