Pharmaceutical & Life Sciences News

Capsule: Dirty Devices, Tobacco Naysayers & Privacy Issues

April 19, 2019, 10:30 AM

Welcome to Capsule—your weekly dose of health-care news, where we give you a recap of this week’s highs and lows for key players in the industry. You can expect us every Friday morning as a bookend for your week.

This week the deadline came due for pharmaceutical companies to include some kind of cost information in their television ads. The voluntary new policy is the industry’s effort to be more transparent, but an impending rule under White House review would require very specific information in ads that drug companies don’t want to publicize: their list prices. Keep your eyes open for our coverage in this area, and in the meantime let’s break down this week’s health news.

Here’s who ended the week on a high note:

States Battle High Prices

  • It’s easy to get caught up in what drug price initiatives are happening in Washington, but it’s states that usually are on the cutting edge of pricing legislation.
  • That’s why we’re keeping an eye on a pending case challenging an Arkansas law governing pharmacy benefit managers. The U.S. Supreme Court signaled its interest in deciding the viability of state laws regulating how companies like Express Scripts and CVS Health reimburse pharmacies for prescription drugs, Jacklyn Wille and Shira Stein write.
  • The City of Angels has its own price efforts in the works, too. Health officials in Los Angeles said this week the city will be negotiating prices alongside the state for drugs used at its four hospitals, its correctional facilities, and its clinics, Laura Mahoney reports.
  • Of course, drug companies won’t go down without a fight. The largest drug lobbying group is challenging the L.A. plan as well as legislative efforts underway in other states, including Maryland.

Tobacco Naysayers

  • Support to raise the minimum age for purchasing tobacco products is mounting.
  • House Energy and Commerce Chairman Frank Pallone Jr. (D-N.J.) and Rep. Donna Shalala (D-Fla.) introduced legislation this week requiring people to be 21 if they want to buy tobacco products, including e-cigarettes.
  • Senate Majority Leader Mitch McConnell tacked on his support for the idea, saying he wants Congress to raise the minimum age to 21 as well, Laura Litvan and Anna Edney from Bloomberg News report.
  • The bipartisan push comes after the Food and Drug Administration, surgeon general, and Centers for Disease Control and Prevention have highlighted growing nicotine use among teens, thanks largely to the prevalence of e-cigarettes.

Johnson and Johnson

  • Johnson and Johnson is faring better than it expected, Bloomberg News’ Riley Griffith reports. Three months ago, it predicted an ugly 2019 as the health-care giant faces thousands of consumer lawsuits and pressure from Washington on drug prices. Its earnings report released this week shows a healthy first quarter, however.
  • It’s the first of the major U.S. drug and medical device makers to report earnings results each quarter, and investors look to it for signs of how broad trends like drug pricing, consumer demand, and currency will affect the rest of the industry’s results over the coming weeks.
  • While the company is facing a set of legal and business challenges, the drug unit’s results are likely to give some comfort to investors that the worst-case scenario may not come to pass.

It was a bleak week for others. Here’s whose Thursday closed on a downswing:

Clean Medical Products

  • A shortage in pediatric breathing tubes is just the beginning of problems for hospitals and patients after two major medical device sterilizing companies face closure over environmental scrutiny, Ayanna Alexander reports.
  • Hospitals around the country and medical device companies like MedGyn Products Inc. are sounding alarms about shortages of all kinds of devices, such as aspiration kits and intrauterine pressure catheters, because of the sterilization problem.
  • More than half of all medical supplies, including the breathing tubes, are disinfected with ethylene oxide, a colorless, odorless gas that the Environmental Protection Agency has labeled a carcinogen. Companies using the gas are shutting their doors, which means hospitals will have to scramble to find a solution.

Patients Seeking Privacy

  • In the digital age, privacy is growing ever-more elusive. A recent court case Lydia Wheeler digs into shows privacy, even in the hospital, can be touch and go.
  • The women suing a California hospital for recording their private medical procedures, including hysterectomies and surgeries after miscarriages, say they never agreed to be filmed when they were admitted to the hospital. But they didn’t read the fine print of their admission paperwork.
  • There in black and white it says the hospital could film for security purposes. It opens up a Pandora’s box of privacy concerns. But the main privacy law protecting patients’ health secrets doesn’t outright prohibit surveillance, attorneys tell Wheeler.

Medicare’s Clout

  • Traditional Medicare is losing enrollees and political support to a programmatic frenemy: the private health plans that cover a third of Medicare participants, Tony Pugh reports.
  • These Medicare Advantage plans receive a fixed amount per enrollee to provide benefits rather than a per-service payment rate. That means the plans have more incentive than physicians in traditional Medicare to provide efficient, cost-saving treatment.
  • But longstanding cost and quality questions about Medicare Advantage plans raise concerns about federal efforts to expand their role in a restructured Medicare program focused on value-based medicine.

Thanks for joining us this week and have a great weekend. I’m all ears when it comes to your 2 cents, tips, critiques, or coordinating exclusive interviews. Send them my way at jlee1@bloomberglaw.com.

To contact the reporter on this story: Jacquie Lee in Washington at jlee1@bloomberglaw.com

To contact the editors responsible for this story: Fawn Johnson at fjohnson@bloomberglaw.com; Randy Kubetin at rkubetin@bloomberglaw.com

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