Tag Archives: Wokasch

rubikscube

ObamaCare Choices not so Straight Forward

I have spent way to much time trying to stay informed and understand the implications of ObamaCare  (The Affordable Care Act).  This started with actually reading the legislation, listening to hours of Congressional hearings, and most recently working through the challenges of Healthcare.gov.  I figured, if nothing else, it would help me make a better decision for my spouse and myself when it came time to purchase healthcare insurance.  I’m not an Affordable Care Act certified “Navigator” or counselor but here are some simplistic and hopefully useful observations from the perspective of a person without employer provided insurance. 

Aside from the state and county you live in, the amount you ultimately pay in premiums depends on your income, choice of insurance company, and level of coverage you decide to carry.   Seems straight forward until you start to work through the details. 

First, where you live (state, county, and city) matters in terms of which insurance plans you have to choose from, how much you will pay to which providers (physicians and hospitals) are included in your plan,  and more importantly, which physicians and hospitals you’ll be able to use.  More on this later.

Second, the subsidy calculator (provided through the Kaiser Family Foundation website) is useful but only gives you an estimate about what your subsidy might be. You won’t find out for sure until you actually enroll and get a premium confirmed from the insurance company.   The subsidy calculator is very income sensitive.  For example, an annual income of $62,000 could mean a potential subsidy of over $7000 per year while there is no subsidy at an income of $63,000.  This is important when you start looking at what might be affordable for you.  If you assume or use a calculator-derived higher subsidy than you ultimately might qualify for, you may have chosen the wrong plan for you and your family.  As in the example, a few thousand dollars difference in your estimated and actual income for 2014 could mean a devastatingly unexpected tax bill at year-end. 

Next, because the plan options are categorized into levels of coverage (Bronze, Silver, Gold or Platinum) you might at first think insurers have standardized their plan offerings making a selection straightforward.  Choose a level that fits your needs and then just choose the insurer you want.  The reality is that within each level of coverage there are multiple levels of coverage with variability in premiums, deductibles, maximum out-of-pockets, co-insurance, and co-pays.

Your first impression might be pleasant surprise at all the options for healthcare insurance available to you now.  You might also be thinking premiums must be really competitive.  At the same time, you might be thinking there are just too many choices to systematically and intelligently evaluate.  There might be as many as five or six insurance providers vying for your business, each with a seemingly endless variety of plan options.  Sorting through the variables can be confusing and a bit overwhelming.  There are the obvious differences in premium prices and levels of deductibles, maximum out of pockets, co-insurance, and co-pays.  Then there are choices for PPO plans (Preferred Provider Organizations) versus HMO plans (Health Maintenance Organization). But, unless you have some idea about what you have paid in the past (your actual out-of- pocket expenses) for healthcare, there is no way to rationally determine which plan is best for you. Your general health may give you a clue as to how much healthcare you might use next year but it is incredibly difficult, if not impossible, to quantitatively assess plan choices.   

The complexity of comparison gets even more interesting when you go to the specific plan details available at the insurer’s website.  When you want to compare plans from three different insurers, for example, you go to each of their individual websites only to find the plan details formatted in a way that makes direct comparisons difficult. You now have the choice of printing off plans or bouncing back and forth between websites. Worse yet, you still don’t know the cost of individual components or if they differ between plans (e.g., a physician office visit for illness or emergency room visit). You just know generally, what the plan will cover as a co-insurance percentage or co-pay.

At this point, you will have spent a considerable amount of time trying to understand your options and might be about to give up but there are two  very important considerations to assess before choosing a plan. These are not readily apparent on Healthcare.gov or  in the plan summary documents at the insurer sites. 

Just because an insurance plan is offered in your area, does not mean you have easy access to the physicians and hospitals near you.   This is especially true in rural communities where local physicians or the nearby hospital may not be “in network” (covered by) of the plan you are considering.  That means you may have to go to another town or city to find “in-network” providers, insurer-approved physicians and hospitals. 

Physician and hospital information are not available on Healthcare.gov.  You have to go to the individual insurer sites and see which physicians and hospitals are in the plans you might be interested in purchasing.  Not always an easy task.  You might even have to do a preliminary application on the insurer site to access this information.  This is a critical evaluation step, especially if you have a physician and hospital near you that you want to use.  Even if the physicians are covered by the plan, they may not be taking new patients and you may not know this until you call to try to make an appointment.  If you choose the wrong insurance plan, based on low cost for example, the physicians and hospital of your choice may not be covered or accessible. 

Ok.  Let’s assume you have found a plan that fits your needs in terms of what you can afford, the level of coverage you feel you need, and the physicians and hospital are within reasonable proximity of your home.  What about the drugs you take?  Most plans have formularies (lists of drugs they cover) and tiered pricing with different levels of co-pay for generic drugs (usually no or small co-pay) up to more expensive brand name drugs (usually much higher co-pay).  The tiers are important, especially if you take single source brand name drugs with no or few alternatives.  So, not only do you need to know what you will be paying in co-pay for your drugs, you also need to know if your drugs are even available on their formulary.  This is especially true for very expensive specialty drugs that are often not covered the same as other drugs.  Fortunately, many plans publish their drug lists (formularies) on their website.  Just note that covered drugs and tiers may be different for Affordable Care Act participants, employer provided coverage, and individually purchased plans. 

Given this process, the research required, and the need for interpretation, analysis and evaluation, I find it hard to believe many people have the time, the patience, the resources, or the necessary information to make rational educated choices about which plan and insurer are best for them.  The variables are complex and difficult to match against individual affordability and healthcare needs.  Unfortunately, the plan with the lowest premium may drive selection, which may or may not be a good choice.

mike@PharmaReform.com

healthcare.gov

Why didn’t President Obama just read PharmaReform?

If  President Obama really wanted to know if Healthcare.gov was ready to go live on October 1 he should have read my last two blog posts ( September 11 and 12).  Having now listened to most of the Congressional hearings on the failed launch, it is clear to me that CMS was not being honest about the disastrous state of the website in the months leading up to the launch on October 1.

Again, even if the President had read PharmaReform, I’m certain CMS would have blown it off,  just as they have obviously ignored all the internal clues, information, and data demonstrating poor and functionally inoperable system performance of the site.  My assessment is that Healthcare.gov was doomed from the beginning.  Here are just a few of the issues that compromised the development and successful launch of Healthcare.gov.

  • Outdated IT procurement requirements limiting contractor selection, possibly precluding more capable and competent providers of IT services from participating in the bidding process (apparently the list of qualified vendors was compiled in 2007 … over 5 years ago and more than 2 years before the start of the project).
  • CMS blindly entrusted contractors depending on money (a virtually unlimited budget with hundreds of millions of dollars) and hiring lots of people rather than enlisting, securing, and deploying expertise to help build the site
  • Total incompetence at CMS in managing the project
  • Ignoring, suppressing, dismissing, or rationalizing bad news concerning the functional status of Healthcare.gov during development  
  • Total lack of coordination across the functional components of the project
  • The politically driven deadline (October 1)  wasn’t taken seriously by CMS leadership, contractors, project managers, and development teams until the final months leading up to the launch.
  • Poor, deceptive, if not outright dishonest communication about the status of Healthcare.gov, by contractors and HHS/CMS leadership to the Obama Administration and Congress

One of the most disappointing and frustrating take-aways from listening to the hearings is that this whole Healthcare.gov debacle could have been avoided had HHS and CMS management done their jobs.

mike@pharmareform.com

longwait

How not to Build Trust and Confidence in ObamaCare

I subscribed to the CMS (Centers for Medicare & Medicaid Services) e-mail newsletters to stay up to date on what is going on and to make sure I get the information I need when it comes time to figure out what to do come October 1, 2013.

Well, a couple days ago I get an e-mail informing me of the “10 Healthcare Benefits Covered in the Health Insurance Marketplace” linked to a post at HealthCare.gov.  In a headline at the bottom of the page they encourage me to “Create an Account” so “When open enrollment starts on October 1, 2013, you’ll be able to apply, compare plans, and enroll in the Marketplace.”

OK, so after six or more tries (I didn’t think I’d have to count) I’m finally signed up.  It isn’t that tough and it is only three pages of simple questions with easy things to fill out, like your name, state, email address, username and password, and three security questions.   I can understand when I had to change my user name because it wasn’t long enough but to have to start completely over to make that one change was a little frustrating.

I am certain the average person doing this isn’t going to try as many times as I did, especially if you have to fill out the entire thing (not just correct the mistake) every time it rejects you. Worst is when everything is ok and you keep getting a “Try Again Later” message.  Remember, to “Try Again Later” you have to start all over.  At that point, I was doing this just to see how many times it would take to get an account created.  Most people would probably have given up after the second time they got rejected and had to redo their info.

So besides the frustration this creates and the potential to lose the people who just give up, it diminishes trust and confidence.  If you can’t even get a simple account set up for me, what is it going to be like to actually apply for insurance, and how in the world am I going to be sure you can get me healthcare when I need it?  What other hassles do you have in store for me?  mike@PharmaReform.com

Important Update:  Thank goodness, I got my account because a day after writing this they closed The Health Insurance Marketplace website for “upgrades” until October 1, 2013.  Even though I have an account in the old version, I’ll probably have to start over in the “Upgraded” version.  What do you think?

snake oil

A Warning Letter to CMS for Obamacare “Misleading Advertising”

I subscribed to the CMS (Centers for Medicare & Medicaid Services) e-mail newsletters to stay up to date on what is going on and to make sure I get the information I need when it comes time to figure out what to do come October 1, 2013.

Well, yesterday I get an e-mail notice from CMS informing me of the “10 Healthcare Benefits Covered in the Health Insurance Marketplace.”  I’m redirected to a blog post on HealthCare.gov that has this wonderful list, especially for those who might need a lot of healthcare.  The list looks virtually “all-inclusive.”  The implication is that regardless of the plan or state I live in, once I pay the monthly premium, I get what’s on the list.  So, for example, item “# 6 – Your Prescription Drugs” are included.  The way it’s presented suggests that once I sign up for health insurance I will no longer have to pay for prescription drugs.  The same implication holds true for the rest of the list.  Choose my plan, pay my monthly premium and things on the list are paid for. Unfortunately, there is little detail and consequently this “advertisement” is very misleading, especially if you are not familiar with how the exchanges or insurance plans might work. No mention of cost variability, deductibles, or co-pays.

The blog clearly was designed to hype benefits while being intentionally vague about cost.   In fact, no mention of cost or cost variability is masterful copy-writing.   It creates an almost subliminal implication of “no additional costs” for “all inclusive coverage,” even for those of us who might sign up for the least expensive plan.   I may be wrong but I don’t think that will be reality and CMS knows that.

Maybe we should send CMS a warning letter for deceptive and misleading advertising.

mike@PharmaReform.com

The Five Types of Biotechnology Companies

Type One:  Big Biotech

Biotech companies with full product lines and significant revenues that rival those of Big Pharma.  They have sufficient cash from operations (profitable) to support healthy, well-funded research pipelines and to acquire technologies that fit their business strategy.

Type Two: One Trick Ponies

Companies with a single major marketed product and sufficient revenues to support some operations with or without profit.  These companies are often acquisition targets for Big Pharma.  With no follow-on products or pipeline, company executives and investors are counting on the company being acquired before they run out of money, lose investor interest, or their product becomes obsolete.  

Type Three:  Prolific Pipelines

Biotech companies with pipelines of high probability technologies.  Their compounds have a sound basic science premise supported by encouraging preclinical and perhaps even Phase II clinical data.  These biotechs focus on developing a strong regulatory package of clinically relevant “proof of concept” data to support optimism for FDA approval and commercial success.   Single product companies might be acquired outright while multiple product companies may sell individual compounds (or technologies) while leaving the discovery research and early clinical development infrastructure in place.  These companies have recently been the source of compounds for Big Pharma looking to replenish and bolster their depleted pipelines.

Type Four:  Too Little, Too Late

These companies have compounds that will probably work, deliver positive clinical results, and even achieve FDA approval.  Unfortunately, their product will provide no meaningful clinical benefit over currently marketed products (some of which might even be generic drugs).  The commercial potential for these products  is limited.   These companies, nevertheless, continue to persuade investors with slick presentations espousing large market size numbers and an insistence that with “a new treatment” even a small percentage of that large market will result in significant revenues for the company.

 Type Five:  “Promises, Promises”

Biotechs that are developing products based on extrapolation of flawed or misinterpreted laboratory-derived conclusions.  This is different from bonafide discovery research based on progressively revealing evidence of potential safety and efficacy.  Unfortunately, while their story may sound plausible, there is little or no evidence to support hope for clinical or commercial success.  These companies thrive on finding investors who are looking for lottery size payouts from picking a winner where nobody else seems to appreciate or understand the medical and scientific techno babble.  These companies require eloquent CEOs who can tell a story and preach the promise of a promising technology.  Unfortunately, the only winners for this type biotech company are the executive teams who continue to be paid Big Pharma salaries and bonuses for prolonging the unfulfillable promise.

So what’s the point?

There are probably in excess of 4000 companies (private or public) worldwide that consider themselves “biotech” companies. 

             Think about the large number of Type Four and Five companies masquerading as Type Three companies.

             Think about the venture capital, investment, and research grant money that Type Four and Five companies wastefully divert from Type One, Two, and Three Biotech companies.

             Think about investor confidence in Biotechnology when Type Four and Five companies fail to deliver.

 mike@pharmareform.com

drugs

Big Pharma R & D Failing

Research and development … innovative new drugs … “the life blood of the pharmaceutical industry.”

Tens of billions spent on research and what does Big Pharma have to show for their investment?  What do the multi-million dollar a year CEO’s and executive teams have to show for their brilliance in delivering the much needed new treatments they keep promising?   Not much, according to the FDA calendar for 2013 drug approval decisions chronicled in a recent article by Seeking Alpha (http://tinyurl.com/qjdyc3m).  Moreover, based on their pay and bonuses (http://tinyurl.com/p57yt5o) CEO performance reviews obviously do not put much importance or weight on drug discovery or approvals. 

Here’s my assessment.

From what I could determine, only five drugs (suvorexant, dabrafenib, tivozanib, dolutegravir, trametinib) discovered and developed by the sponsors are what I would consider “new”.  GlaxoSmithKline developed and sponsors three of those five drugs and one was developed and sponsored by Merck.  Two new drugs (efinaconazole and sofosbuvir) were acquired and then developed by the sponsors, Valeant and Gilead.

Six additional drugs scheduled for FDA decisions in 2013, are merely reformulations or new delivery systems for already approved drugs.

And finally, there are five,  already approved drugs,  awaiting new or expanded indications. 

Think about that for a second.  Tens of billions of dollars spent on R & D and technology acquisitions every year for decades and only seven new drugs.   Every year PhRMA touts the thousands of new compounds in development, several hundred by disease state.  How many Big Pharma company executives get up at the never-ending investor conferences to brag about their pipelines of new drugs coming?  With more than a thousand drug or biotech companies, spending tens of billions of dollars year after year and we only get seven new drugs?

I would also point out that, from my perspective, only Merck and Glaxo qualify as Big Pharma.  Ok, Pfizer is in the joint venture on dolutegravir, but still.  Even if you throw in Cubist and Gilead, where are the rest of the Big Pharmas? 

This is a sad commentary on disastrous pharmaceutical R & D productivity (and the lack thereof). More importantly, it’s a very scary picture for investors and worse for those with diseases for which there are few or no therapeutic options.

Perhaps Pharma will figure out that it is not more money that delivers breakthrough new treatments.  Focused, high-level basic science expertise (not just academic degrees) and a deep multi-disciplinary understanding of the target disease are required to crack the drug discovery code.  Unfortunately, for the past couple of decades, Big Pharma hasn’t valued discovery research. They would rather just write a check than do the hard work.  And the results show.

sales-rep-feature

Thinking about being a Pharmaceutical Sales Representative

People researching pharmaceutical sales as a career option often come across some of my blog posts and ask my opinion about becoming a rep.  It seems everybody has their own impressions about what pharmaceutical sales is all about and why this might be a good job or career choice.

Seasoned veterans looking for a new position have their own criteria for making a change, often just trying to determine if a company can deliver what they are looking for that they aren’t getting from their current position.  For some, including those who might have been laid off,  it’s more about whether or not they want to continue being a pharmaceutical sales rep, finding “the right company”, making more money, or maybe even making a big change and pursuing another sales field (e.g., medical devices) altogether.

Some of the requests I get come from those who have never done pharmaceutical sales but have heard about the attractive starting salaries, enticing bonus opportunities, car, full benefits, an expense account, and flexible schedule.  For others, however, pharmaceutical sales  is just another job option rather than a career aspiration.   This situation is probably more prevalent today, especially in this economy where it is difficult to get any job.

Finding a job and pursuing an career opportunity can be an emotional roller coaster, which can cloud thinking and compromise decision making.  This is especially true when an unemployed person is desperate to pay bills.  Therefore, rather than draft a job description and debate the pros and cons for becoming a pharmaceutical sales representative, here are some questions to help think through some of the issues.

    • Are you comfortable with what you have been able to find out about the company?
    • Does the company have a product or products that you can believe in?
    • Is the territory in a place you want to live?
    • How extensive (how long) is training?
    • How important is understanding the science and medicine behind the products?
    • How does the company determine you are ready to sell their products?
    • What resources does the company provide to help you sell their products?
    • Are physician presentations “scripted” marketing messages or conversational?
    • What training do you get for working in a “managed market?”
    • What is the sales performance history for the territory?
    • What is the reputation of the previous representative in the territory?
    • How much managed care is in the territory? Is managed care helping or hurting sales?
    • Are your products on formularies with favorable reimbursement status? Any major issues?
    • Can you see the influential and high volume prescribers in your territory (access rate)?
    • Have you met your manager and is it somebody you feel you could trust and work with?
    • How successful has your manager been from a sales perspective?
    • Does your manager have a District of sales superstars or average performers?
    • How many people has your manager had promoted?
    • What are the job expectations?
    • How will your performance be measured?  (e.g., sales, customer feedback, activities)
    • How are territory sales measured and how accurate are the reports?

 

Seasoned pharmaceutical sales reps could contribute more and perhaps even more germane questions than I have provided here.   I hope, however,  these questions at the very least,  stimulate thinking and will help formulate a more fact based process for people considering a job or career in pharmaceutical sales.  If this is a career decision for you, a more thorough assessment is warranted, especially for the impact of the ever-changing healthcare market on your products, your company, and your job function.  I would suggest writing out answers to your questions as this can help take the emotion out of the process, will generate additional follow-on questions, and will help keep your decision more factually grounded.  If you are  exploring pharmaceutical sales as just one of many job options,  you might take a different, perhaps less analytical, approach to your decision.   In the end, if you finally decide you would like to become a pharmaceutical sales representative, before taking the job I would recommend you talk with a current sales representative, preferably from the hiring company.  mike@pharmareform.com

How Bad Behavior Evolves in Pharmaceutical Companies and Probably Other Big Businesses

There appears to be an interesting pattern of corporate behavior that seems to evolve over time and accelerates with the need for executive incentive compensation driven financial performance (sales growth). This behavior is especially noticeable in larger organizations and is government protected if your behavior is within a large corporation (too big to fail).

Whenever there is a need or demand for more robust financial returns, the evolution advances another step.  Here is the progression of behavior that seems to transpire in the context of Pharmaceutical industry executives but it probably applies to other industries as well (think investment banking). So, here’s how it goes…

We have a great product that really can help people.  We have the resources to  make sure physicians and patients know about it, know how to use it  appropriately and safely.   We want to be credible in the market and trusted so let’s  make sure we are ethical about our marketing and sales.

This evolves to…

There is a much bigger market for this product than we are currently capturing …  we’ve probably been to conservative in our promotion so what do we need to do to grow this product even faster?

The plan sounds good,  as long as we have the regulatory language to market it that way.

It looks like it should be ok from a regulatory perspective if we present it like this so we can argue it is our interpretation of the package insert language.

Still need more sales…

OK, it may be questionable from a regulatory perspective but is it legal?  We can  deal with a warning from the FDA if it comes and we’ll probably end up in lengthy but inconsequential litigation to determine if it really is illegal  …  so let’s go with it.

Wanting more sales…

Nobody has called us on our marketing and sales activities yet so what else can we do?

Ok, not sure if this is really illegal but even if it is … what are we facing here?   We might have to pay a fine or something … but nobody’s going to jail.

Notice how fast “ethical” gets dismissed without much thought.

In the end, money and greed protected in the labyrinth of  “Big Corporate” decision making drive this scenario.  For those who want less regulation and less legislation, you can expect even more aggressive business practices.  Without strict enforcement and personal (not corporate) accountability with behavior deterring consequences, regulation and the law are meaningless.   mike@pharmareform.com

Drug Developers: Putting on a Show at JPMorgan Healthcare Conference

Each year there is considerable excitement, behind the scenes deal-making, networking, and of course, 4 days of never ending executive presentations at the JPMorgan Healthcare Conference. This year will be no different.  Over 400 company presentations (the overwhelming majority from Biotech and Pharma company executives) proudly highlighting accomplishments of the past and pipeline promises for the future, all with the caveat of “forward looking statements.”  Virtually every company in drug development that comes to JPMorgan each year declares they have strategically honed their pipelines filled with promising new agents for diseases with significant unmet medical needs.

Granted, not all the JP Morgan presenting companies are working on drug development.  Some are medical device companies, healthcare systems, pharmacy chains, distributors, or contract support companies to the biotech and Pharma industry. Without going through and deciphering which of the more than 400 companies are actually working on drug development, it’s at least 200 and probably closer to 300 of the presenting companies.  So what’s my point?

Unfortunately, all the JP Morgan presenting drug companies collectively delivered less than 35 FDA drug approvals in 2012.  In fact, 12 of the approvals came from companies and organizations not even presenting at JP Morgan this year.

35 approvals is not a very impressive number, especially when you consider the tens of billions of dollars spent each year on drug research, the hundreds of thousands of scientists and clinicians engaged in drug development, and the number of companies professing to have promising new drugs in development.

mike@pharmareform.com

What did Big Pharma contribute to 2012 New Drug Approvals?

I’ve read several press releases over the past couple of week announcing and interpreting the significance of FDA drug approvals over the past year.  Most give you the impression that the results are encouraging and suggest Pharma R & D is in recovery mode.  Traditional PhRMA bragging points of spending more than $60 billion per year on R & D, the thousands of compounds in development, and hundreds of innovative new medicines approved over the past couple of decades are, however, somewhat tempered by the reality of the recently reported drug approvals, especially for Big Pharma.  I don’t mean to downplay the challenges of drug discovery and development but it’s important to look beyond the total number of approvals to determine what that number really represents.

A closer look at the list of 35 FDA approved drugs for fiscal 2012 (October 1, 2011 to September 30, 2012) reveals rather dismal R & D productivity and lack of innovation that has haunted Big Pharma for the past several decades.

First let’s put 35 new drug approvals into context.  These new drug approvals were the results of decades of  hundreds of billions of dollars invested in research being done at or by more than a thousand Pharma and Biotech companies as well as thousands of government and university laboratories.  Pharma reminds us frequently of the hundreds of compounds in development for different diseases.   Yet, only 35 new products in 2012 … not very impressive.   Also interesting to note is that there are 31 different sponsors for the 35 New Drugs Approved.  So out of more than 1000 pharma and biotech companies out there, only 31 entities got a drug to the approval list.

The list better reflects the importance of smaller research organizations in discovering and developing new drugs.  Depending on how you define Big Pharma (e.g., are Gilead, Forest Labs, and Astellas Pharma considered Big Pharma?), you may end up with slightly different numbers but Genentech/Roche, Bayer, and Sanofi contributed 4 of the 12 “Priority Drug Approvals”.  More to the point, of the 35 drugs listed, if we’re generous in a definition of Big Pharma, only 13 of 35 drug approvals were “sponsored by” Big Pharma.

What’s more disheartening is the evidence of diminishing drug discovery at Big Pharma.  While celebrating the 35 approvals, a little investigating reveals that the overwhelming number of approved products were not discovered by or at Big Pharma.  You have to dig a little but even where Big Pharma is listed as the sponsor, many of the approved compounds were licensed in or acquired from collaborative work with smaller biotech companies.  Again, being generous in how you might define Big Pharma, only 6 or 7 products on the list were actually discovered at a Big Pharma.   And in this number, two were discovered by Genentech (acquired by Roche), one is an analog of a previously approved biotech product, one is a combination vaccine, and another is a combination of previously approved products.  So much for Big Pharma innovative “discovery research.”

So while the total number may be reassuring in the context of previously disappointing years of smaller numbers of drug approvals, a closer look reveals that drug discovery and drug development are no longer being driven by Big Pharma.  More importantly, despite the investments being made, new drug discoveries remain elusive and approvals are rare regardless of who is doing the work.

mike@pharmareform.com