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Selected news articles which highlight important policy issues.

News: Weekly Archives

News for the week of 04-18-2007

Covering the uninsured, but only up to $25,000
Wall Street Journal, 4-18-07

Editor's Notes:

The Journal examines Tennessee's latest effort to insure the low-income uninsured through access to so called "minimedical" plans that offer limited health benefits in return for very low premiums (around $50-$100 per month).

In late 2005, Dot Smith gave up offering health insurance to her employees at Pepper Patch Inc., which makes jellies and cakes in this middle Tennessee town. At $400 a month per employee, the premiums were just too high.

Now, five people who work at Pepper Patch have insurance again, thanks to a new state program that kicked off this month. It costs Ms. Smith only around $50 a month per employee. "It gives me a sense of security knowing I have this [insurance] card in my purse," says 23-year-old Ashley Robinson, who's still paying off a $3,000 bill for an emergency-room visit she made when she was uninsured.

The program, engineered by Tennessee Gov. Phil Bredesen, has won national attention as states try to develop plans for universal health care. President Bush, during a recent speech in Chattanooga, commended the governor, a Democrat, for being "on the leading edge" of health-care reform.

There's just one catch. Ms. Robinson and others in the program only get coverage up to $25,000 for health expenses annually, and only $15,000 of that can go to hospital bills. If she becomes seriously ill or has a major accident, she'll be just as vulnerable as she was before. She'll have to either pay the bills herself or ask the hospital for charity care.

The limits put Tennessee in sharp contrast with Massachusetts and California, two other states that are part of the U.S. trend toward reconsidering universal coverage. Plans in the two states envision people paying more of their own medical bills at first, in exchange for protection against catastrophic costs.

Gov. Bredesen isn't the only one casting an eye toward limited-benefit or "minimedical" plans. Employers such as Avon Products Inc., International Business Machines Corp., and Sears Holdings Corp. offer them, typically to part-time or entry-level workers. IBM says temporary workers at the company up to a year are eligible. Insurers say more than a million people are in such plans.

Aetna Inc. and Cigna Corp. have acquired two of the biggest players in the minimedical business. Insurers see the plans as low-risk and good for squeezing revenue from an untapped market. The industry faces pressure to find new customers because the proportion of U.S. firms offering health-insurance coverage dropped to 60% last year, from 69% in 2000.

Alan Sager, a professor of health policy at Boston University, calls the Tennessee plan "flimsy insurance" that will merely "provide cover for employers to save money." Adds University of Tennessee medical-school professor David Mirvis, "It may be better than nothing, but it's not real insurance."

In an interview, Gov. Bredesen says he listened to focus groups and queried blue-collar folks, such as a waitress at a waffle restaurant, to devise his plan. "They weren't interested in buying insurance for catastrophic events. They wanted access to the emergency room next month, access to the pharmacy next month," he says. "Let's give people what they want instead of what some advocate says they want."

The governor says the working poor can't afford $2,000 deductibles, and he questions whether Massachusetts and California can pay for their more-ambitious plans.

Tennessee should be commended for trying to find ways to create low cost insurance options for the uninsured. But a better approach would be to deregulate the insurance market and allow residents to buy health insurance from out of state. This would offer residents insurance at a wider range of prices and coverage. President Bush has also proposed a standardized tax deduction for health insurance, which would offer families a $15,000 deduction for health insurance (and individuals $7,500). If this was combined with a refundable tax credit for low-income Americans who don't pay taxes, it would help millions more Americans afford private health insurance. In addition, the Heritage Institute thinks there are valuable lessons that state policymakers can take away from Massachusetts's ongoing experiment in universal, mandated coverage.

America's health care crisis won't be solved in one fell swoop—but states like Massachusetts, Tennessee, and Florida are breaking new ground with policy experiments that we all can learn from.

[permanent link]

Wal-Mart to open 400 in-store clinics
Reuters News, 4-24-07

Editor's Notes:

While Washington dithers on health care reform, the market is finding new ways to make health care more accessible and affordable for every day consumers. In addition to launching a ground breaking program of $4 generic prescriptions, Wal–Mart announced this week that it is adding hundreds more low–cost convenient care clinics to its stores.

Wal–Mart Stores Inc. said on Tuesday that it will contract with local hospitals and other organizations to open as many as 400 in–store health clinics in the next two to three years.

Should current market forces continue, the world's largest retailer said up to 2,000 clinics could be in Wal–Mart stores over the next five to seven years.

Wal–Mart said the effort marks an expansion of a pilot program it started in 2005, when it leased space within its stores to medical clinics. Currently, it said 76 clinics are operating inside Wal–Mart stores in 12 states.

It has said the clinics are expected to boost the health of its shoppers and should also help sales by drawing consumers into its stores.

"We think the clinics will be a great opportunity for our business. But most importantly, they are going to provide something our customers and communities desperately need—affordable access at the local level to quality health care," said Wal–Mart Chief Executive Officer Lee Scott in a statement.

[permanent link]

Anemia drug trial's tardiness at issue
Los Angeles Times, 4-24-07

Editor's Notes:

As questions swirl around the safety of Amgen's anemia drug, Aranesp, in some patient sub–populations, observers are asking a bigger question: Why aren't some of these safety signals being caught sooner?

Take, for example, the case of Amgen Inc. The Thousand Oaks biotech giant Thursday released the results of a highly anticipated safety study of the company's popular anemia drug Aranesp, which along with similar anemia medications is taken by more than a million people in the U.S. each year.

The Amgen–sponsored trial found that Aranesp showed no increased risk of death compared with a placebo in a subset of lung cancer patients, sending Amgen's shares up nearly 4%.

Industry analysts had called results of the study crucial to the future of Amgen's anemia products, which have been dogged by questions about their safety when used in some patients and dosages. The drug and its shorter-acting predecessor, Epogen, account for about half of Amgen's sales.

"These results contribute to the growing body of evidence on [the drug's] safety, reinforcing the neutral impact [of the drug] on survival in cancer patients suffering from chemotherapy–induced anemia," Roger M. Perlmutter, Amgen's executive vice president of research and development, said in a statement.

Yet there is one question that Thursday's announcement didn't answer: What took so long for the research to happen in the first place?

Although the study's results are reassuring, some wonder whether such questions should have been explored sooner.

"We prescribe this drug to a million people a year and only now are we seriously examining if how we are treating them is harmful?" said Dr. Ajay K. Singh, professor of medicine at Harvard Medical School. "That's very disconcerting."

There are a couple of important points to be made here. The first is that America's legal liability system can actually deter companies from pursuing rare safety signals related to their medicines. No matter what they find, no matter how responsible their behavior, they are likely to be sued.

Second, no drug is ever "safe" and there is no way to make them completely safe for all patients at all times. The best we can do is to gather more information on side effects, and help doctors and patients to better balance the risks and benefits of individual medications.

Still, there does need to be significantly more postmarket surveillance of prescription drugs, both by the FDA and industry. This can be accomplished in a number of ways, including offering tort protection to companies in return for post market surveillance, and substantially expanding the FDA's resources for its own surveillance.

[permanent link]

Thai Showdown Spotlights Threat to Drug Patents
Wall Street Journal, 4-24-07

Editor's Notes:

Ever since Thailand announced that it was breaking the patent on Abbott's AIDS drug Kaletra, the company has struggled to defend its intellectual property rights and win the battle of public opinion. It appears to be losing on both fronts.

Abbott brought on a storm of bad publicity by revoking plans to bring new drugs to Thailand, including its latest version of Kaletra. Activists called that the "nuclear option" and said it was unprecedented for a drug company to withhold medicines from a country over a commercial dispute.

Now Abbott is partly backing down. The company said over the weekend it is willing to sell the new version of Kaletra in Thailand at a deeply discounted price that it offers some other countries, so long as the government respects its patent. It's unclear whether the Thai government will accept the offer.

Global drug makers are increasingly looking to emerging markets to compensate for slowing growth in the U.S., Europe and Japan. Abbott's troubles in Thailand suggest that cracking the new markets can be tough because governments are driving a hard bargain on price. They are using the threat of breaking patents to get good deals. Thailand has won the support of nonprofit groups and world organizations while meeting little resistance from the U.S. government.

"We've been talking with the drug companies for four years about reducing the price of treatment, but with no result," says Thailand's health minister, Mongkol na Songkhla. "Now we have no choice." Thailand has already brought in its first shipment of copies of efavirenz, a Merck & Co. AIDS drug whose patent it broke.

After being slow to lower prices for AIDS medicines in the poorest nations in the 1990s, the industry has done much more to make its medicines affordable and accessible in places like sub–Saharan Africa. Thailand does not, however, fall into that category.

By demanding the lowest price from drug manufacturers and breaking patents, Thailand is setting a precedent that will reduce incentives for companies to develop and market new medicines in developing nations.

[permanent link]

Free NHS a mirage, say doctors
Telegraph, 4-25-07

Editor's Notes:

A new physician–sponsored study in the United Kingdom finds many patients there paying extra for supplemental health care services provided by private insurance. This insurance, called "top–up" coverage, is meant to make up for shortfalls and long waiting times in the UK's "free" (Read: tax-payer financed) National Health Service.

Faced with long waiting lists and postcode lotteries, the doctors say that patients are increasingly paying extra private payments to upgrade the treatment they receive.

Despite the Government pouring billions of pounds into the NHS to improve the quality of care, they claim that top—up payments will increase in major areas of the health service such as cancer care and heart disease.

The report shatters the NHS's founding principle that health care should be free for all at the point of delivery.

Patient groups said the study highlighted Britain's "two—tier health system", where people with money had access to a range of treatments and those without did not.

...

Published by Doctors for Reform, which represents 1,000 doctors working in the NHS, it accuses the Government of being in denial about the role of the private sector in the NHS.

"It is commonly said that health care in the UK is free at the point of delivery; in fact this mantra is now a political mirage rather than a day-to-day reality," it says.

One of the studies' authors, Karol Sikora, writes in an accompanying op-ed that "In Britain we have become used to two parallel options for healthcare: the National Health Service, which we all pay for through our taxes, and private healthcare that is paid for separately, usually through insurance."

This is, in fact, the reality of single–payer health care programs in Canada and Europe—although ostensibly free, patients with serious illness often find themselves paying out of pocket for "extra" care—or else going without.

[permanent link]



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