Why a $2 Million Drug Could Be a Bargain

Plus, what voters want on health care

Why the New $2 Million Drug Could Be a Bargain

We told you last week about a new gene therapy from Novartis, just approved by the Food and Drug Administration, that will treat a rare and fatal childhood disease called spinal muscular atrophy — and will cost $2.1 million.

The eye-popping price for the one-dose treatment has sparked a national debate, but STAT’s Damian Garde writes that, for parents of children affected by the disease, the cost is well worth it — and could actually save them money as a one-time treatment compared with expensive hospitalizations or an alternative drug on the market that costs $375,000 a year.

“Novartis has argued that its therapy, approved last month as Zolgensma, is cost-effective even at $2.1 million,” Garde writes. “SMA is a progressive disease that gradually erodes muscular function. Patients often need wheelchairs and at-home care, and many suffer from lung infections that require hospitalization, all of which can add up to far more than the cost of Zolgensma.”

On the other hand, some experts worry that “if drug companies continue to price each new therapy at a premium to the last, the system might buckle beneath the cost,” Garde says. If gene therapies for more common diseases are priced like Novartis’s drug, “the aggregate cost, passed down through insurers and across the health care system, could become untenable.”

Read the full piece at STAT.

Numbers of the Day

76%: A new study published by the JAMA Network finds that 49 top-selling brand-name drugs saw a median price increase of 76% from January 2012 through December 2017. All but one of those 49 drugs saw regular annual or biannual price increases, with no evidence that time on market or the availability of generic competitors affected prices. Of the 36 drugs in the study that were on the market since 2012, 28 saw prices rise by more than 50%, and 16 more than doubled in price. “With so few exceptions to this norm, costs will likely continue to rise unless bold actions are taken,” the researchers conclude.

$4.6 billion: Doctor burnout is costing the U.S. health care system about $4.6 billion a year, according to a study published last week in the Annals of Internal Medicine. The study claims that’s a conservative estimate, based only on physician turnover and reduced work hours. It works out to about $7,600 per employed doctor each year. "We hope that people will think about these numbers and say: 'If I invested half that amount of money in systems that improve work efficiency, or ways to build better teams to offload some of the workload from the physician, not only is it the right thing to do, but it's also going to improve my quality and safety, and save me some dollars in the end,'" a co-author of the study told NPR.

Voters Want Health Care Fixed, but Are Very Hazy on the Details

Medicare for All and other health care proposals have been the subject of months of heated debate and sniping among politicians, both Democrat and Republican. But with the 2020 election still more than 500 days away, voters aren’t paying much attention to the nitty gritty of the policy debate, according to Drew Altman, president and CEO of the Kaiser Family Foundation, a non-profit focused on health care.

Writing at Axios Monday, Altman said that most voters are “only dimly aware” of the details of the various health proposals that are being discussed in Washington — and that there’s a huge gap between the ideas being discussed by politicians and policy experts on the one hand and the daily struggles with the health care system experienced by ordinary Americans on the other. Political activists may be skirmishing over plans for single-payer health care or changes to Obamacare, but most voters aren’t following along.

Conducting focus groups in Texas, Florida and Pennsylvania, Altman found that most participants didn’t see the policy debates as relevant to their concerns about health care. While the voters said that health care would be an important issue for them in the 2020 presidential election, many had never heard of Medicare for All, Medicaid buy-in or Affordable Care Act state block grants. When those and other proposals were described to them, participants said they sounded complicated and worried about the potential effects on their existing health care coverage.

Overall, Altman said, “Most voters in these groups don’t seem to see the current health reform proposals on either side of the aisle as solutions to their top problems: paying for care or navigating the health insurance system and red tape.”

Voters just want a fix: The Wall Street Journal’s Stephanie Armour reports that more voters in a recent WSJ/NBC poll cited health care as the top priority for the government than any other issue, including immigration and national security. About half of voters would pay more in taxes to pay for universal health care, Armour said. At the same time, about 80% of Americans say they currently have good health care, which could make it hard to win support for sweeping changes to the system.

“The American people are saying we still need this fixed,” Lara Brown of George Washington University told Armour. The problem is, there’s little agreement on how to go about solving the problem.

Trump Says Top Economist Hassett Will Leave Soon

Kevin Hassett, chairman of the White House Council of Economic Advisers, will be leaving the administration "shortly," President Trump tweeted Sunday night.

Hassett, who was an economist at the conservative American Enterprise Institute before joining the administration, has been a staunch proponent of Trump economic policies, including the 2017 tax cuts.

“He provided relentlessly positive economic analysis, served as a booster for the president’s trade policies and was well liked at the White House,” Bloomberg’s Justin Sink writes. “Hassett’s tenure was also marred by occasional factual miscues and the decision to quibble with traditional statistics that didn’t support Trump’s claims of historic economic growth. His office has regularly promoted alternative measures to data produced by the Congressional Budget Office, the Bureau of Labor Statistics and the Census Bureau on key issues including wages, inflation, poverty and deficits, while complaining about outside analyses that showed the president’s trade conflicts hurting the economy.”

Hassett told CNN that no one asked him to leave, adding that it is normal for CEA chairmen to step down after two years. Hassett has been in his position since September 2017. He told CNBC that his departure is not related to the president’s tariff threats against China and Mexico. “It’s normal, circle of life kind of stuff.”

Trump said in his tweet that he would name a “very talented replacement” for Hassett once he returns from his overseas trip.

Quote of the Day

“I’m still at 3% for the year, but the point is the uncertainty about the forecast is much higher than the last time we talked."

– Hassett, in an interview on CNN Monday, saying that the chances of hitting President Trump’s economic growth target for this year are increasingly uncertain given the administration’s trade war and a growing budget deficit. Hassett added that, to boost growth, the U.S. should consider cutting government spending: “If the president wants to go from 3% to 4% in his second term, then fiscal consolidation should be on the table, absolutely,” he said.

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