Tag Archives: Health care costs

Well being system pays $575 million to settle anti-trust lawsuit

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Considered one of Northern California’s largest well being techniques is paying $575 million to settle claims that it used anti-competitive practices to bump up prices for sufferers

SACRAMENTO, Calif. —
Considered one of Northern California’s largest well being techniques pays $575 million to settle claims that it used anti-competitive practices to bump up prices for sufferers, the state’s legal professional normal mentioned Friday, although that falls wanting damages sought in a associated personal lawsuit that would have exceeded $1 billion.

California Legal professional Normal Xavier Becerra had sought an injunction to cease the alleged anti-trust practices by Sutter Well being, however no financial damages. The settlement imposes a brand new court-approved monitor on the well being system for 10 years to make sure it’s not utilizing anti-competitive practices with insurance coverage corporations to extend sufferers’ prices.

Becerra known as it “one of many largest actions in opposition to anti-competitive conduct within the well being care market throughout the nation, with unprecedented ranges of injunctive reduction to revive competitors available in the market.” It’s bigger than latest comparable settlements with different suppliers in North Carolina and Washington state, his workplace mentioned.

The settlement instantly set off a debate between hospitals and client advocates over whether or not it can restrict or enhance well being care prices.

About 1,400 self-funded employers individually obtained the $575 million in damages from Sutter and can have claims paid by means of an impartial administrator, minus attorneys charges. It is not clear if customers will get a share of the settlement, Becerra mentioned, however he mentioned sufferers ought to profit from elevated competitors.

Below earlier market situations a typical inpatient process may cost a little $90,000 extra in Northern California than within the southern a part of the state, he mentioned citing a college examine. The state had mentioned Sutter was largely guilty.

The Sacramento-based nonprofit didn’t admit wrongdoing and denied the allegations, arguing that there’s loads of competitors and that insurance coverage corporations had been those boosting prices.

“There have been no claims that Sutter’s contracting practices with insurance coverage corporations affected affected person care or high quality,” Sutter Well being Senior Vice President and Normal Counsel Flo Di Benedetto mentioned in a press release hailing the settlement.

Sutter and Becerra introduced in October that that they had settled the class-action lawsuit simply in time to keep away from a trial. However they didn’t present particulars till Friday, after it was submitted to a San Francisco Superior Court docket choose for approval. The swimsuit was first filed by employers and unions in 2014, however Becerra filed the same lawsuit final 12 months after a six-year investigation.

Amongst different issues, the settlement limits what Sutter can cost for out-of-network procedures and will increase pricing transparency.

It bars Sutter from blocking insurance coverage corporations from utilizing incentives to direct sufferers to cheaper well being care suppliers, a observe that critics mentioned made it more durable for sufferers to make use of Sutter’s lower-priced rivals. And it prohibits what Becerra known as Sutter’s “all or nothing” strategy with insurance coverage corporations, which required insurers to incorporate all the corporate’s hospitals of their supplier networks even when it did not make monetary sense.

American Hospital Affiliation normal counsel Melinda Hatton mentioned industrial medical health insurance corporations will profit most as a result of it can allow them to “cherry-pick” hospitals and remove incentives for them to work with hospitals to offer decrease price care. She predicted it can enhance well being care prices, warning that sufferers in rural or weak communities could possibly be harmed most by the settlement.

Anthony Wright, government director of the well being care client advocacy coalition Well being Entry California, countered that Sutter’s pricing is one cause that sufferers in Northern California sometimes pay $3,000 extra in medical health insurance premiums than in Southern California.

“We wish hospitals to compete on decrease prices and better high quality, and never on whether or not they can get bundled in with larger and larger hospital techniques,” he mentioned. ”This settlement takes a primary step to altering the incentives to the market and competitors we would like. That advantages customers.”

Wright was hopeful the settlement would set a nationwide precedent and reignite stalled proposals in Congress and California to restrict “shock medical payments” for out of community procedures.

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Trump promises order aimed at lower prescription drug prices

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President Donald Trump is promising an executive order that he says is intended to enable the U.S. government to pay lower prices for prescription drugs.

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Trump says his administration soon would announce a “favored-nations clause,” where the amount paid by the government for a particular drug would not exceed the lowest amount paid by other nations or companies.

Prices in other countries are often lower because governments directly negotiate with manufacturers.

Trump mentioned his proposal when speaking with reporters before departing the White House for New Jersey, but he provided no other details.

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TV pitches for prescription drugs will have to include price

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TV pitches for prescription drugs will soon include the price, giving consumers more information upfront as they make medication choices at a time when new drugs can carry anxiety-inducing prices.

Health and Human Services Secretary Alex Azar said Wednesday the Trump administration has finalized regulations requiring drug companies to disclose list prices of medications costing more than $35 for a month’s supply.

“What I say to the companies is if you think the cost of your drug will scare people from buying your drugs, then lower your prices,” Azar said. “Transparency for American patients is here.”

In a tweet, President Donald Trump celebrated the announcement, saying: “Historic transparency for American patients is here. If drug companies are ashamed of those prices—lower them!”

Drug companies responded that adding prices to their commercials could unintentionally harm patients.

“We are concerned that the administration’s rule requiring list prices in direct-to-consumer television advertising could be confusing for patients and may discourage them from seeking needed medical care,” said the Pharmaceutical Research and Manufacturers of America, the main trade group.

But one major firm — Johnson & Johnson, based in New Brunswick, New Jersey — has already started disclosing the cost of its blood thinner Xarelto in TV advertising. And polls indicate many patients are not taking their medications as prescribed because of cost.

Drug pricing details are expected to appear in text toward the end of commercials, when potential side effects are disclosed. TV viewers should notice the change later this year, perhaps as early as the summer.

The government is hoping that patients armed with prices will start discussing affordability with their doctors, and gradually that will put pressure on drugmakers to keep costs of brand-name drugs in check.

Pricing disclosure was part of a multilevel blueprint President Donald Trump announced last year to try to lower prescription drug costs .

Democrats say it still won’t force drugmakers to lower what they charge, and they want Medicare to negotiate on behalf of consumers.

Leigh Purvis, a pharma expert with AARP’s research division, said disclosure will help dispel a “cloak of darkness” around prices and encourage more informed discussions between patients and their doctors. But she cautioned against expecting too much.

“The overall idea of reducing drug prices is something for which there is no silver bullet,” said Purvis. “This is just one step, one tool in what will have to be a very big arsenal.”

Other ideas from the Trump administration include regulations affecting Medicare and legislative proposals in Congress. With the cost of medicines a top concern for voters, Trump and lawmakers of both major political parties want accomplishments they can point to before the 2020 elections.

Drugmakers also complained that the price reveal will infringe on their First Amendment free speech rights by forcing them to disclose prices. It’s unclear if that will prompt a court challenge, but Azar points out that the government has for decades required carmakers to post their sticker prices on vehicles.

“Prices of automobiles are vastly less important to your health and affordability than drugs,” he said.

According to the latest government figures, the 10 most commonly advertised drugs have prices ranging from $488 to $16,938 per month or for a usual course of therapy.

The disclosure requirement will not apply to print or radio ads for the foreseeable future. It encompasses all brand name drugs covered by Medicare and Medicaid, which is nearly all.

In a twist, enforcement of the rule will rely on drug companies suing each other over violations under a longstanding federal law that governs unfair trade practices.

“There are very large legal practices built on pharma companies suing each other,” Azar said, calling it a “quite effective mechanism.”

Most people count on lower-cost generic drugs to manage their health problems, but the advent of highly effective and extremely expensive medications for once-fatal or intractable diseases has put consumers on edge. Some genetic and cellular-based treatments can cost hundreds of thousands of dollars a year, straining on the budgets of insurers and government programs.

A recent poll from the nonpartisan Kaiser Family Foundation found that 1 in 3 Americans said they haven’t taken medications as prescribed because of costs. People who take four or more medications, those who spend $100 a month or more on meds, patients in fair to poor health and middle-aged adults are more likely to report affordability problems.

Although most patients do not pay the full list prices that will be included in ads, experts say those are still important. Patient copays are often based on list prices. And many people who have high-deductible insurance plans pay list prices because their insurance doesn’t start covering until patients spend several thousand dollars of their own money.

In other economically advanced countries, governments negotiate drug prices to keep medications more affordable for patients. But the U.S. has held back from government-set prices.

Azar, who is leading Trump’s efforts on prescription drugs, is a former drug company executive. He held senior posts with Indianapolis-based insulin maker Eli Lilly and Co. after an earlier stint in government service during the George W. Bush administration.

The regulations will take effect 60 days after they’re published in the Federal Register.

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