Hey – We Found Where All That Retail Spending Disappeared To

❝ Retail is in trouble. Sales declined for the second month in a row in the U.S. in March, and there’s talk that perhaps traditional retail has passed a tipping point, with lots of store closings, layoffs and bankruptcies to come.

❝ One obvious reason for retailers’ difficulties is the rise of Amazon.com Inc. and other establishments that the Census Bureau classifies as “nonstore retailers.”…

There have been even bigger shifts over the decades, though, in what we spend our money on, according to the personal consumption expenditures database maintained by the Bureau of Economic Analysis. Increasingly, it’s not tangible stuff that you buy in a store or order online, but services…

❝ Health care is by far the biggest contributor to this move from goods to services — spending on health care services has gone from 3 percent of personal consumption expenditures in 1929 to 17.2 percent last year. Spending on pharmaceuticals made up another 3.8 percent of personal consumption in 2015…

These huge spending gains can be chalked up partly to medical advances, an aging population and rising expectations for health care. But they also can lead a person to wonder to whether there isn’t something terribly inefficient about how the U.S. delivers medical care.

What are we spending less on? The two biggest decliners by far have been groceries and clothing, although the share of spending going to cars and to furniture and home appliances has fallen a lot since the 1950s as well…

❝ Then, once again, there’s all that money going to health care and financial services — $3.1 trillion in 2016. Surely some of that could have been spent on shopping instead.

Validating, once again, US consumers spend more on the whole cost of healthcare for less in return than any other developed industrial nation. The details on insurance company ripoffs are easy. Just compare them to Social Security and Medicare charges. Poisonally, I think most of the rest is simple collusion between major healthcare providers, pharma and those folks in the insurance industry – again. They agree on absurd charges for procedures and prescriptions knowing they get rolled into the insurance bill.

Insurance companies drive physicians crazy – nearly half now prefer upgrading Obamacare to single-payer

❝ There are many reasons people put off going to the doctor. One of the big reasons is cost — a huge arc in the current debate about whether and how to repeal and replace Obamacare, which sought to increase the number of Americans with quality health insurance. Another is access, or finding a doctor who takes your insurance and has appointment openings. But whatever the reasons, the disconnect means that many people choose to become patients only in extreme circumstances and are then at the mercy of the system.

❝ “It really debases and demeans and takes away your dignity to be shuffled around when you know you have something wrong with you,” said Dr. Paredes, an obstetrician-gynecologist in Lakeland, Fla., who practiced in a variety of healthcare settings before retiring two and a half years ago. “I think healthcare is something that should be available to everyone from cradle to grave.”

That’s one of the main reasons nearly half of the 500 doctors who responded to a February LinkedIn survey said they would support a single-payer healthcare system, or Medicare-like coverage for everyone, not just the elderly, instead of the current patchwork model of insurance coverage.

Aside from the crap lies offered by Congressional Republicans…

❝ …For many physicians, the issue comes down to efficiency. In their responses, they cited the administrative hassle of working with multiple insurance companies, each with its own rules and billing procedures. And they pointed to some of the less visible costs, like patients who bounce from one healthcare provider to another as their health plans change.

A total of 48% of physicians said they would be in favor of single-payer healthcare, while 32% were opposed and 21% said they didn’t know.

❝ And even though doctors acknowledged that they might take a financial hit under a single-payer system, many respondents said it would be more than mitigated by getting out of the collection business. In other words, even if they earned less, there would be more patient care and less of the aggravation that comes with negotiating with and tracking down payment from multiple insurance companies.

RTFA for pretty middle-of-the-road analysis. For me, the truth has always been cost. Social Security and Medicare each are national insurance programs with premiums paid by the insured and, generally.their employers. There’s an artificial cap allowing high earners to stop paying the SSA tax at just over $100K income. Still, both of these systems are run with administrative costs less than 3%. And they work well. Helluva lot better than the motley arrangement Obamacare relies on.

Our adorable insurance companies declare their administrative costs run 14-25% and jack up all their rates accordingly. Couple that with a Congress that refuses civilians the same right the military has to negotiate fixed prices for prescriptive drugs – and we get screwed twice by the existing system. That’s the system Republicans and Blue Dog Democrats want to make more expensive and less safe for the insured.

Humbug!

Thanks, Barry Ritholtz


Live in the US? Rejoice! You’re free to pay too much for prescription drugs

Why does the US pay more for prescription drugs than any other country? Monopolies and a government that can’t negotiate, scientists said in a paper that may provide ammunition for lawmakers aiming to lower drug costs.

Researchers from Harvard Medical School dug through medical and health policy papers published in the last 10 years to figure out why people in the US spent almost twice as much on prescription drugs in 2013 compared to 19 other industrialized nations — and why prices are still going up. They found that FDA regulations and patents protect drug companies from competition, and federal law prevents Medicare from negotiating drug prices. All of which work together to allow drug companies to set their own prices…

Aaron Kesselheim and his colleagues propose a number of solutions. Those include giving Medicare the power to negotiate prices, as well as removing some of the regulations that keep generics from speedily entering the market. The authors also suggest educating payers, providers, and patients about how effective competing treatments are, and having pharmacies automatically substitute cheaper generic drugs for pricey brand name prescriptions…

But Kesselheim thinks allowing Medicare to negotiate is small potatoes compared to making sure there’s competition in the pharmaceutical marketplace.

The JAMA paper describes two forms of legal protection that give brand name pharmaceuticals an effective monopoly. The first is exclusivity granted by the FDA that gives new small molecule drugs and biologics windows of five to seven years and 12 years, respectively, before generic versions can be sold. And patents can protect the active ingredient and chemical structure of a drug — as well as less fundamental aspects like its formulation and coating — for 20 years or more. Generic manufacturers can sue to challenge these patents, but in a practice called pay for delay, big name pharma companies settle the suits and pay generics manufacturers to wait it out until the patent expires…

Along those lines, Amy Klobuchar — the senator who called for an investigation into EpiPen price hikes — is co-sponsoring several bills that could, if they passed, help increase competition in the pharmaceutical marketplace by enabling Medicare price negotiation, allowing patients to import pharmaceuticals from Canada, and preventing pharmaceutical companies from blocking generics entering the marketplace.

And as the final healthcare professional interviewed for the article noted – all these remedies can and should be applied to the whole range of price-gouging we face as captive consumers in a nation where our politicians are owned by lobbyists.

OK. I added that last phrase.

If you need a hint why Big Pharma opposes legal marijuana


Click to enlarge

There’s a body of research showing that painkiller abuse and overdose are lower in states with medical marijuana laws. These studies have generally assumed that when medical marijuana is available, pain patients are increasingly choosing pot over powerful and deadly prescription narcotics. But that’s always been just an assumption.

Now a new study, released in the journal Health Affairs, validates these findings by providing clear evidence of a missing link in the causal chain running from medical marijuana to falling overdoses. Ashley and W. David Bradford, a daughter-father pair of researchers at the University of Georgia, scoured the database of all prescription drugs paid for under Medicare Part D from 2010 to 2013.

They found that, in the 17 states with a medical-marijuana law in place by 2013, prescriptions for painkillers and other classes of drugs fell sharply compared with states that did not have a medical-marijuana law. The drops were quite significant: In medical-marijuana states, the average doctor prescribed 265 fewer doses of antidepressants each year, 486 fewer doses of seizure medication, 541 fewer anti-nausea doses and 562 fewer doses of anti-anxiety medication.

But most strikingly, the typical physician in a medical-marijuana state prescribed 1,826 fewer doses of painkillers in a given year.

The hypocritical oath of our pharmaceutical industry is “Do nothing without being assured a profit!”

The opioid painkiller and heroin epidemic – in one map/gif

The opioid painkiller and heroin epidemic led to a new record in drug overdose deaths in 2014 — more than 47,000 overdose deaths that year alone, and nearly two-thirds of them were linked to opioids and heroin.

But what does that death toll really look like? These maps, published by Socrata, contextualize how far and wide the opioid epidemic has spread, showing the rate of drug overdose deaths by county in 2004 and 2014…

As the maps show, it’s not just that overdose deaths rose as a result of the opioid crisis; these deaths also spread to all parts of the country. The deaths are, truly, an epidemic.

How did this happen? The short answer is that doctors believed what Pharmaceutical companies told them.

Big Pharma lied. RTFA.

Big pharma got people hooked on opioids — made tons of money while people died

How did America get to a point where legal opioid painkillers, marketed as medicine, killed nearly 19,000 people in 2014?

One alarming explanation is that the drug companies behind these opioids wanted more people to buy their product, so they led a misleading campaign to get doctors to prescribe their drugs.

The result: Drug companies profited as more and more people got addicted and died of overdoses. This chart, from a 2015 study published in the Annual Review of Public Health, tells the story:

…The opioid epidemic began in the 1990s when doctors prescribed a tremendous amount of opioid painkillers to help treat pain — a serious problem, given that chronic pain alone afflicts about 100 million Americans.

But one reason doctors were so willing to prescribe these painkillers, despite the clear risks of addiction and overdose, is heavy marketing from the pharmaceutical industry.

Andrew Kolodny and other public health experts…detailed Purdue Pharma’s involvement after it put OxyContin on the market in the 1990s…

Between 1996 and 2002, Purdue Pharma funded more than 20,000 pain-related educational programs through direct sponsorship or financial grants and launched a multifaceted campaign to encourage long-term use of opioid painkillers for chronic non-cancer pain. As part of this campaign, Purdue provided financial support to the American Pain Society, the American Academy of Pain Medicine, the Federation of State Medical Boards, the Joint Commission, pain patient groups, and other organizations. In turn, these groups all advocated for more aggressive identification and treatment of pain, especially use of opioid painkillers.

Often, these campaigns propagated highly misleading claims — including assertions that OxyContin and other new opioid painkillers were safer than other medications on the market.

The claims were so misleading, in fact, that Purdue Pharma eventually paid hundreds of millions of dollars in fines for them…

Purdue learned from focus groups with physicians in 1995 that doctors were worried about the abuse potential of OxyContin. The company then gave false information to its sales representatives that the drug had less potential for addiction and abuse than other painkillers, the U.S. attorney said.

But in the midst of the misinformation campaigns, doctors prescribed hundreds of millions of prescriptions for opioids — in 2012, enough to give a bottle of pills to every adult in the country. And as people became addicted to opioid painkillers, they also began turning to a cheaper, more potent opioid — heroin — to satiate their cravings.

The result: In 2014, there were a record 47,000 drug overdose deaths in the US, nearly two-thirds of which were opioid-related, according to federal data. And all along the way, drug companies made a lot of money.

Purdue Pharma and company officials were ordered to pay fines totaling over $600 Million in 2007 for false advertising. A lawsuit by the state of Kentucky could have resulted in another $1 billion added to payment for their crimes. The Republican attorney general settled for $24 million. Perhaps the fact of his law firm representing Purdue had something to do with that.

No officials have ever been charged with crimes. They’ve only killed thousands. Barely up to the level of many of our presidents.

Shadow pricing, highway robbery, and the price of medication

It’s often difficult to pinpoint the moment a revolution starts, but when it comes to the issue of drug pricing, it’s quite possible that we’ll look back at Dec. 6, 2013, as the day that everything changed.

That was the day that Gilead’s Sovaldi was approved for sale by the FDA. Sovaldi’s launch — and its $84,000 price tag — set off a tsunami of media attention on the issue of medication costs. Never mind that Sovaldi has an incredible cure rate, all of the attention fell squarely on its $84,000 price tag.

Since then pharmaceutical drug pricing has been a regular media hot topic. There was coverage of a recent study that found older drugs were being priced higher in an apparent attempt to keep their prices in parity with newer alternative treatments. That was followed by a report in the Wall Street Journal about how pharmaceutical companies buy the rights to drugs from other manufacturers and then dramatically increase prices:

“On Feb. 10, Valeant Pharmaceuticals International Inc. bought the rights to a pair of life-saving heart drugs. The same day, their list prices rose by 525% and 212%.

Neither of the drugs, Nitropress or Isuprel, was improved as a result of costly investment in lab work and human testing, Valeant said. Nor was manufacture of the medicines shifted to an expensive new plant. The big change: the drugs’ ownership…”

Many years ago, back before I got into the healthcare analytics space, I was an investment banker and subject to the rules and regulations laid down by the SEC and FINRA. In that business, we had to be aware of potential client red flags like market manipulation and insider trading. Maybe it’s the training that’s kicking in here, but when I see stories like those strung together above I can’t help but feel like someone’s getting one over on someone else. And while I’m a tried and true capitalist who believes in letting market demand dictate pricing, it’s evident that this pharma pricing strategy may have pushed too far…

What many healthcare professionals have come to realize is that these high prices actually have little to no bearing on the safety, efficacy, or comparative effectiveness of the drug…Talking as a whole, the media coverage on drug pricing is revealing how the system is starting to push back. Companies like Express Scripts are putting their foot down on basic drug pricing and are demanding more information and data regarding the overall cost and safety of drugs.

We also see an emerging trend among payer and provider clients that are now realizing the huge impact that the shadow costs from drug side effects have on their bottom line and patient outcomes, and they too are demanding more transparency in financial and safety drug data in order to make more effective and accurate drug purchasing decisions.

We expect the national debate around drug pricing to intensify and morph to include evaluating drug pricing based on their “fully loaded” costs. After all, it’s we as taxpayers who foot the bill for the bulk of these expenses through the Medicare and Medicaid systems. And we as patients who suffer because we simply can’t afford needed medications anymore.

Brian Overstreet is co-founder and president of AdverseEvents, a California-based healthcare informatics company that improves patient safety and reduces systemic healthcare costs through the comprehensive analysis of postmarketing drug side effect data. This post originally appeared on the company’s RxView blog.

The medical-industrial complex now owns more Congress-creeps than the military-industrial complex. To the same result. American taxpayers pay more and get less for their money than any other citizens in the industrialized West. Money for nothing or less. Subsidizing phony research – or no research – under the blanket description of advancing healthcare.

Ebola vaccine sat on the shelf ready to test for a decade

Almost a decade ago, scientists from Canada and the United States reported that they had created a vaccine that was 100 percent effective in protecting monkeys against the Ebola virus. The results were published in a respected journal, and health officials called them exciting. The researchers said tests in people might start within two years, and a product could potentially be ready for licensing by 2010 or 2011.

It never happened. The vaccine sat on a shelf. Only now is it undergoing the most basic safety tests in humans — with nearly 5,000 people dead from Ebola and an epidemic raging out of control in West Africa.

Its development stalled in part because Ebola is rare, and until now, outbreaks had infected only a few hundred people at a time. But experts also acknowledge that the absence of follow-up on such a promising candidate reflects a broader failure to produce medicines and vaccines for diseases that afflict poor countries. Most drug companies have resisted spending the enormous sums needed to develop products useful mostly to countries with little ability to pay…

The NY TIMES doesn’t need to waste space on defending the greed of corporate pharmaceutical giants. That’s what Congress is for.

Now, as the growing epidemic devastates West Africa and is seen as a potential threat to other regions as well, governments and aid groups have begun to open their wallets. A flurry of research to test drugs and vaccines is underway, with studies starting for several candidates, including the vaccine produced nearly a decade ago.

A federal official said in an interview on Thursday that two large studies involving thousands of patients were planned to begin soon in West Africa, and were expected to be described in detail on Friday by the World Health Organization.

With no vaccines or proven drugs available, the stepped-up efforts are a desperate measure to stop a disease that has defied traditional means of containing it.

Kind of like white folks noticing we don’t live in a post-racial society regardless of what Republicans say. The TIMES notices what anyone who cares about public health has always known. If it can make a bunch of money, any illness can receive study and attempts at a cure from the medical-industrial complex. The rest can waste their energy on hope.

Thanks, Mike