DAILY TRIFECTA: Healthcare Is A Racket

Profit motives, means and opportunities

TITLE: Insurers Are Gaming Medicare — To The Tune Of $140 Billion

EXCERPT: The federal government is losing as much as $140 billion per year by subsidizing private Medicare Advantage plans, according to a bombshell new report. In the groundbreaking investigation, health care researchers identified the four major ways that private insurers systematically exploit the taxpayer-funded national health insurance program while denying care to the nation’s most vulnerable patients.

The researchers additionally found that seniors could save over $1,800 in annual fees taken from their Social Security checks if the government redirected what it spends subsidizing Medicare Advantage plans to instead reduce premium costs. Under the current arrangement, “traditional” Medicare pays about $12,000 a year to private Medicare Advantage insurers for every patient whose care they “manage.” 

Medicare Advantage insurers — which include UnitedHealth Group, Humana, Cigna, and Blue Cross Blue Shield — are profiting at the expense of ordinary seniors, 40 percent of whom are completely dependent on their Social Security benefits, which average about $1,600 per month after Medicare premiums are taken out. 

“Insurers are quietly plundering the Medicare trust fund for their own profits and compromising the health of senior citizens and [people with] disabilities,” said Ed Weisbart, a family medicine physician who is the secretary of Physicians for a National Healthcare Program (PNHP), a single-payer advocacy group that produced the report. 

Medicare, the public health insurance for seniors and people with disabilities, is one of the most popular and effective social programs in the country. The program is funded by taxpayer money and keeps costs low by setting fixed prices with health care providers.

TITLE: All in: Drugmakers say yes, they'll negotiate with Medicare on price, so reluctantly

EXCERPT: It's been more than a month since the Biden administration announced the first ten drugs up for Medicare price negotiation, which a provision in the Inflation Reduction Act. The drugs included blockbuster blood thinners Xarelto and Eliquis, as well as drugs for arthritis, cancer, diabetes and heart failure.

Although more than a third of the companies that make drugs on the list have sued the federal government, all the companies have signed agreements saying they will negotiate.

The agreements were due Oct. 1.

"They're taking steps to participate in the negotiating program so we can give seniors the best possible deal," President Biden declared from the Oval Office in a video posted to X.com, formally known as Twitter.

Many of the drugmakers told NPR they had no choice. They could either agree to negotiate, pay steep fines or withdraw all their products from the Medicare and Medicaid markets.

"While we disagree on both legal and policy grounds with the IRA's new program, withdrawing all of the company's products from Medicare and Medicaid would have devastating consequences for the millions of Americans who rely on our innovative medicines, and it is not tenable for any manufacturer to abandon nearly half of the U.S. prescription drug market," a Merck spokesperson wrote in an email to NPR.

Merck makes Januvia, a drug that treats diabetes and was selected for price negotiation. The company has also brought one of the many lawsuits against the government to keep negotiation from happening.

Overall, the industry has argued that negotiating drug prices would stifle innovation.

"In light of the statutory deadline, we have signed the manufacturer agreement for the [Medicare] price setting program," an Amgen spokesperson wrote in an email to NPR. "We continue to believe the price setting scheme is unlawful and will impede medical progress for needed life-saving and life-enhancing therapies."

TITLE: How a Big Pharma Company Stalled a Potentially Lifesaving Vaccine in Pursuit of Bigger Profits

EXCERPT: Ever since he was a medical student, Dr. Neil Martinson has confronted the horrors of tuberculosis, the world’s oldest and deadliest pandemic. For more than 30 years, patients have streamed into the South African clinics where he has worked — migrant workers, malnourished children and pregnant women with HIV — coughing up blood. Some were so emaciated, he could see their ribs. They’d breathed in the contagious bacteria from a cough on a crowded bus or in the homes of loved ones who didn’t know they had TB. Once infected, their best option was to spend months swallowing pills that often carried terrible side effects. Many died.

So, when Martinson joined a call in April 2018, he was anxious for the verdict about a tuberculosis vaccine he’d helped test on hundreds of people.

The results blew him away: The shot prevented over half of those infected from getting sick; it was the biggest TB vaccine breakthrough in a century. He hung up, excited, and waited for the next step, a trial that would determine whether the shot was safe and effective enough to sell.

Weeks passed. Then months.

More than five years after the call, he’s still waiting, because the company that owns the vaccine decided to prioritize far more lucrative business.

Pharmaceutical giant GSK pulled back on its global public health work and leaned into serving the world’s most-profitable market, the United States, which CEO Emma Walmsley recently called its “top priority.” As the London-based company turned away from its vaccine for TB, a disease that kills 1.6 million mostly poor people each year, it went all in on a vaccine against shingles, a viral infection that comes with a painful rash. It afflicts mostly older people who, in the U.S., are largely covered by government insurance.

Importantly, the shingles vaccine shared a key ingredient with the TB shot, a component that enhanced the effectiveness of both but was in limited supply.

From a business standpoint, GSK’s decision made sense. Shingrix would become what the company calls a “crown jewel,” raking in more than $14 billion since 2018.

But the ability of a corporation to allow a potentially lifesaving vaccine to languish lays bare the distressing reality of public health vaccine creation. With limited resources, governments have long seen no other option but to team with Big Pharma to develop vaccines for global scourges. But after the governments pump taxpayer money and resources into the efforts, the companies get control of the products, locking up ownership and prioritizing their own gain.

That’s what GSK did with the TB vaccine. Decades ago, the U.S. Army brought in GSK to work on a malaria vaccine and helped develop the ingredient that would prove game-changing for the company. It was an adjuvant, a substance that primed the body’s immune system to successfully respond to a vaccine for malaria — and, the company would come to learn, a variety of other ailments.

GSK patented the adjuvant and took control of the supply of the ingredients in it. It accepted government and nonprofit funding to develop a TB vaccine using the adjuvant. But even though it isn’t carrying the vaccine to the finish line, it isn’t letting go of it entirely either, keeping a tight grip on that valuable ingredient.

As TB continued to rage around the globe, it took nearly two years for GSK to finalize an agreement with the nonprofit Bill & Melinda Gates Medical Research Institute, or Gates MRI, to continue to develop the vaccine. While the Gates organization agreed to pay to keep up the research, GSK reserved the right to sell the shot in wealthy countries.