Big Pharma Wins if Senate Remains Controlled by Republicans

By George W. Chapman

A Democratic president will have minimal to no impact on any attempt to reign in drug prices if Republicans retain control of the Senate. The bill authorizing Medicare to negotiate just a couple dozen drug prices will probably continue to languish on Senate leader Mitch McConnell’s desk and not be brought up for a vote. The Big Pharma lobby, via hundreds of millions in contributions to political campaigns, will retain its grip on Congress. The industry continues its mantra that the power to set prices is paramount to innovation and the viability of the industry. Physicians and hospitals may establish prices, but Medicare determines what they are actually paid. Commercial carriers tend to mimic Medicare. Insured consumers rarely end up paying the price charged by hospitals and physicians. Congress has denied providers the power to set their prices to maintain their innovation and viability. Congress (Medicare) does not seem overly concerned about the viability of our providers.

COVID-19 Vaccine

Pfizer, without federal funding, has broken ahead of the competition with a vaccine that is 90% effective. It will be available for distribution by the end of this year. Any approved vaccine will be critical to defeating the coronavirus; but as with any other vaccine like the flu vaccine, not everyone will choose to take it. What remains to be seen is how long the pandemic will be prolonged if millions of us refuse the COVID-19 vaccine and then what will be the related death rate among those who refuse the vaccine. If you look at the seasonal flu, there isn’t a lot of reliable data on how many unvaccinated adults die of the annual flu. It is not a reportable death. But there is data on how many unvaccinated kids die of the flu because it is a reportable death. The CDC reports 90% of children under 18 who die of the flu were not vaccinated. In a typical year, 50% of kids go unvaccinated. To keep perspective, between 100 and 200 children die from the seasonal flu each year and, as with COVID-19, about half had complicating conditions. The point is, many of those deaths could have been prevented.

Hospital Price Transparency

By executive order, hospitals must indicate their prices and charges for a mandated list of procedures established by CMS by Jan. 1, 2021 or face a fine of $300 a day. The executive order does not constitute a national healthcare plan nor will it save consumers millions as recently touted by the New York Post. This ill- advised executive order will only create more confusion and consternation among consumers shopping for the best deals. In a well-intentioned effort to help consumers make informed decisions and to create real price competition among hospitals, Medicare requires hospitals to post their “standard charges” which include: gross charges, discounted cash prices, payer specific negotiated rates, de-identified  minimum negotiated charges and de-identified maximum negotiated charges. Hospitals are also required to post their charges and payer specific negotiated rates for 300 “shoppable services.” (Did you get all that?) Besides fueling consumer confusion and suspicion about healthcare costs, this rule will be a nightmare for hospitals to comply. Shopping prices in healthcare sounds good, but it will be a wasted effort if your physician does not have admitting privileges at your selected hospital or your health plan considers your selected hospital out of network. Also, prices do not reflect outcome. Since most hospital admissions are elective, your physician, for a lot of reasons that have nothing to do with price, will have strong preferences for a particular hospital for your particular procedure.

Biden Assembles Pandemic All- star Team

His transition team is virtually stacked with several healthcare heavy weights. Former US Surgeon General Vivek Murthy, M.D., and former FDA Commissioner David Kessler captain the team. Several highly qualified, respected and renown physicians round out the team. (It should be noted, none are radiologists.) Rick Bright, M.D., an expert in virology and immunology, who recently resigned in protest from Trump’s undermanned pandemic team, has been reappointed by Biden. Luciana Borio. M.D., is the former director of the FDA’s office of counter terrorism and emerging threats. Ezekiel Emanuel, M.D., is vice provost of medical ethics and health policy at the University of Pennsylvania. Also on the team is author Atul Gawande, M.D., who teaches health policy and management at Harvard. We need an all-star team to defeat the heretofore unchallenged opponent once and for all. We are at nearly 200,000 new cases a day (as of Nov. 13) and approaching 250,000 deaths.

ACA Back in Court

For the third time in eight years the Affordable Care Act returns to the Supreme Court. The case, California v. Texas, is brought by a cadre of Republican governors arguing that since the individual mandate (you pay a tax for not having health insurance) has been declared unconstitutional, the entire law should be scrapped. The timing couldn’t be worse as over 20 million Americans depend on the ACA in the midst of a pandemic. At stake is: discounted commercial premiums to eligible indigent recipients; the inclusion of pre-existing conditions in all policies; expanded Medicaid eligibility; caps on commercial insurance profits with excess profits being rebated to employers or individuals; standardization of benefits to make comparison shopping simpler; a platform from which improvements can be made. Neither the Republican governors nor the current administration has an alternative plan. At the time of this writing, the Supreme Court is hearing oral arguments from both sides. So far, conservative judges Roberts and Kavanaugh have questioned the logic of tossing the entire law. (And speaking of rebates, it looks like commercial carriers will owe members over $2.5 billion after this year is finalized. About 11 million of the commercially insured will receive an average $219 rebate.)

George W. Chapman is a healthcare business consultant who works exclusively with physicians, hospitals and healthcare organizations. He operates GW Chapman Consulting based in Syracuse. Email him at