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KHN First Edition: March 22, 2016


First Edition

Tuesday, March 22, 2016
Check Kaiser Health News online for the latest headlines

Today's early morning highlights from the major news organizations.

Kaiser Health News: Debate Arises Over HHS Plans For Privacy Rules On Addiction Treatment
Kaiser Health News consumer columnist Michelle Andrews writes: "What’s more harmful to patients being treated for drug or alcohol abuse: risking their health by keeping other medical providers in the dark about their substance abuse treatment? Or risking their jobs, homes and child custody arrangements by allowing potentially damaging treatment details to be electronically shared among an array of medical providers? Advocates have painted the possible patient outcomes in starkly different terms as they consider the federal government’s recently proposed update to guidelines that govern the release of patient records for alcohol and drug abuse treatment." (Andrews, 3/22)

Kaiser Health News: More Sickle Cell Patients Survive, But Care Is Hard To Find For Adults
Erin N. Marcus, for Kaiser Health News, reports: "When Janoi Burgess was a child, he thought doctor appointments were fun. But when he turned 21, the South Florida resident could no longer go to his pediatric specialist. Instead, he “bounced around” to various adult primary care doctors, none of whom seemed well-versed in the details of his condition. When he had a painful sickle cell crisis two years later, his only choice was to go to a hospital emergency department, where, he says, he waited three hours for pain medication. Burgess’ experience is not unusual among many adults with sickle cell anemia, which affects up to 100,000 people in the United States, most of them African Americans. For many years, most people with sickle cell died in childhood or adolescence, and the condition remained in the province of pediatrics. During the past two decades, advances in routine care have allowed many people to live into middle age and beyond." (Marcus, 3/22)

The Associated Press: Health Insurance Gains Due To Obama's Law, Not Economy
There's growing evidence that most of the dramatic gain in the number of Americans with health care coverage is due to President Barack Obama's law, and not the gradual recovery of the nation's economy. That could pose a political risk for Republicans running against "Obamacare" in the GOP primaries as they shift to the general election later this year. While the health care law remains highly unpopular in the party, the prospect of taking away health care coverage from millions of people could trigger a backlash if the eventual GOP nominee's plan to replace it is seen as coming up short. (3/21)

The Associated Press: Disputed Health Law Rule Would Broaden Transgender Rights
Big companies are pushing back against proposed federal rules they say would require their medical plans to cover gender transition and other services under the nondiscrimination mandate of President Barack Obama's health care law. Civil rights advocates representing transgender people say the regulation, now being finalized by the Health and Human Services Department, would be a major step forward for a marginalized community beginning to gain acceptance as celebrities like Caitlyn Jenner tell their stories. (3/22)

USA Today: Secret Deals May Mean Consumers Pay More For Drugs
Secret deals often prompt drug benefit companies to cover brand-name prescriptions when equally effective generic or even over-the-counter medications are available, several drug pricing experts say. These companies, known as pharmacy benefit managers (PBMs), negotiate deals with drug makers that include rebates and other compensation to encourage certain drugs and come up with lists of drugs that their insurance plans will cover. Employers and insurance companies then determine which drugs to encourage on these formularies. (O'Donnell, 3/21)

The Wall Street Journal: Valeant Provides More Restatement Details
Valeant Pharmaceuticals International Inc. provided more detail Monday about what went wrong with its accounting. The drug company confirmed a possibility it had raised last month—that it would have to restate past earnings because it had recognized a chunk of revenue too soon—and explained more about exactly how that happened. It also suggested it had effectively counted some revenue twice. (Rapoport, 3/21)

The Wall Street Journal: Valeant Starts CEO Search, Alleges Improper Financial Conduct
Valeant Pharmaceuticals International Inc. moved to replace its longtime chief executive, part of a series of steps to regain credibility and show investors it is committed to a fresh start after months of failed attempts. Valeant’s decision to look for a successor to CEO Michael Pearson comes just three weeks after it decided to take him back following an extended medical leave to treat severe pneumonia that he began around Christmas, a stretch during which the drugmaker’s woes mounted. (McNish, Hoffman and Benoit, 3/22)

The Wall Street Journal: Valeant: Pearson Is Out, Ackman Is In, Controversy Continues
The drama at Valeant just won’t stop. Embattled pharmaceutical giant Valeant Pharmaceuticals International said Monday morning that it was replacing is chief executive, J. Michael Pearson, and adding hedge-fund manager William Ackman to its board. But that move created even more controversy for the company, as the directors failed in an attempt to make room for Mr. Ackman by pushing its former chief financial officer, Howard Schiller, off the board. (Holm, 3/21)

The Wall Street Journal: Schiller Responds To Valeant Claim Of ‘Improper Conduct’
A former Valeant executive–and current board member–isn’t going away quietly. Among a long list of big announcements Monday, embattled pharmaceutical giant Valeant Pharmaceuticals International said that an internal committee had found that former Chief Financial Officer Howard Schiller had engaged in “improper conduct” that had contributed to the company’s need to restate its results. In a statement released through his lawyers, Mr. Schiller is refuting that claim, saying “at no time did I engage in any improper conduct that relates to any restatement of revenue the Company is considering.” (Holm, 3/21)

The New York Times: A Shake-Up At Valeant Signals The End Of An Era
As recently as last summer, J. Michael Pearson styled himself as a brash and bold executive with a new way of thriving in pharmaceuticals: buying other companies, slashing costs and sharply raising prices on undervalued drugs. The strategy had worked for years, as Valeant Pharmaceuticals, the company he ran, became an investor favorite. But by the end of 2015, Mr. Pearson and his company’s strategy were emblematic, on Capitol Hill and elsewhere, of high drug prices and the pharmaceutical industry’s worst impulses. (Thomas and Pollack, 3/21)

The Wall Street Journal: A Valeant Breakup: Is It Inevitable Now?
The book has closed on the roll-up story at Valeant Pharmaceuticals International. Bond and equity holders now need to ask whether a breakup should follow. Valeant said Monday Chief Executive Michael Pearson would leave, once a successor is identified. The activist investor William Ackman, who owns 9% of the company, is joining the company’s board. As far as it goes, this news is an incremental positive for shareholders. They will now have more aggressive board representation during a period of potential conflict between Valeant’s debt and equity holders. (Holm, 3/21)

Reuters: Valeant's Harsh Words On Ex-Executives May Play Into Government Probes
A move by Valeant Pharmaceuticals International Inc. to single out two former top executives over its accounting problems is likely a bid to win leniency with government agencies investigating the drugmaker, according to accounting and securities experts. Valeant on Monday said Chief Executive Michael Pearson was leaving the company, and billionaire investor William Ackman, one of the company's biggest shareholders, would take a seat on its board, as Valeant tries to rectify accounting problems and save its business. Valeant is under investigation by both state and federal agencies, including the Securities and Exchange Commission. (Rosenberg and Lynch, 3/21)

The Wall Street Journal: One Person Still In The Green On His Valeant Bet: Michael Pearson
When Valeant Pharmaceuticals International named Michael Pearson as its new chief executive back on Feb. 1, 2008, the company noted in its announcement that he would be “personally purchasing a minimum of $3 million in company stock.” It’s unclear when or how much stock Mr. Pearson bought at the time and whether he held onto it. But based on that day’s closing price, $3 million worth of shares bought then would be worth about $6 million today, when the company said it was looking for a successor to replace Mr. Pearson as CEO. (Becker, 3/21)

The Wall Street Journal: Sequoia Fund Sold 1.5 Million Shares Of Valeant Pharmaceuticals
Valeant Pharmaceuticals International Inc.’s largest stakeholder said a fund it manages sold about 1.5 million shares of the drug maker’s stock last week, when the company’s share price fell more than 60%. Ruane, Cunniff & Goldfarb Inc.’s Sequoia Fund Inc. sold the Valeant shares to reduce investors’ taxes by booking capital losses, said David Poppe, executive vice president at Ruane, Cunniff. The fund’s shares in question were purchased in October, Mr. Poppe said. (Krouse, 3/21)

The Wall Street Journal: Anthem Sues Express Scripts Over Drug Pricing
Health insurer Anthem Inc. sued Express Scripts Holding Co. for about $15 billion in damages, alleging that the pharmacy-benefit manager violated their contract through excessive charges and failures in its operations. The lawsuit, filed on Monday in the U.S. District Court for the Southern District of New York, seeks damages tied to what Anthem said was Express Scripts’ unduly high pricing for drugs. Anthem also asked for a judgment that it could terminate its deal with Express Scripts, which stretches to 2019, but the insurer said it hasn’t determined if it would actually end the contract. (Wilde Mathews, 3/21)

NPR: Anthem Sues Express Scripts For A Bigger Slice Of Drug Savings
The battle over drug prices escalated Monday when health insurance giant Anthem Inc. sued Express Scripts, a manager of drug benefits, to get a bigger share of savings on prescription medicines. Anthem is looking for a change in its contract with Express Scripts, which handles drug benefits for 80 million people. The insurer says it's overpaying for pharmaceuticals and not benefiting from rebates the pharmacy benefit manager has negotiated with drugmakers. (Kodjak, 3/21)

The Washington Post: Anthem Sues Express Scripts Over Prescription Drug Pricing
Insurers contract with middleman companies like Express Scripts, which negotiate rebates and discounts on prescription drugs on behalf of the people they insure and pocket some of the savings for themselves. Anthem entered into a ten-year agreement with Express Scripts in 2009 that included a provision for a periodic review of pricing, to ensure that the prices Anthem received were competitive with others in the marketplace. According to the lawsuit, Express Scripts' current pricing for the contract now exceeds competitive pricing by $13 billion, plus an additional $1.8 billion through a transition period after the contract is terminated. (Johnson, 3/21)

The Associated Press: Anthem Sues Express Scripts Over Cost Of Prescriptions
Anthem said in a statement that Express Scripts was obligated to negotiate in good faith to make sure Anthem received competitive pricing, but that it had refused to do so. A spokesman for Express Scripts said that Anthem’s lawsuit had no merit, and that it had “consistently acted in good faith and in accordance with the terms” of its deal with Anthem. (3/21)

The Wall Street Journal: New Migraine Drugs Are On The Horizon
Researchers are unlocking some of the mysteries surrounding migraines, raising hopes for a new class of treatments. Millions of patients who experience migraines would benefit from better medicines, researchers say. Drugs taken to treat the debilitating headaches don’t work in all patients. Meanwhile, drugs taken to prevent attacks were developed to fight other conditions, like high blood pressure, and have limited effectiveness. (Rockoff, 3/21)

Reuters: UK Cost Agency Backs J&J Cancer Drug In Change Of Heart
A cancer drug originally discovered in Britain has finally been endorsed for treating advanced prostate cancer before chemotherapy on the country's state health service in a change of heart by the cost agency NICE. The National Institute for Health and Care Excellence (NICE) said on Monday it was now recommending Zytiga, which is sold by Johnson & Johnson, following the submission of new evidence on the drug's benefits. (Hirschler, 3/21)

The Washington Post: The FDA, For Only The Second Time Ever, Wants To Ban A Medical Device. Here’s Why.
Powdered medical gloves — the kind used in surgery or to examine patients — would be ordered off the market under a new proposal by the Food and Drug Administration. That would put the gloves in an exclusive club — only one other device has been banned by the agency: prosthetic hair fibers in 1983. When an already approved device turns out to pose higher-than-expected risks, the agency usually tries to correct the problem by adding a warning to the label or changing how the device is used. But in the case of the gloves — and the hair fibers — the FDA concluded that no labeling fixes would do the trick. (McGinley, 3/21)

The New York Times: Fighting Heroin, Ithaca Looks To Injection Centers
Even Svante L. Myrick, the mayor of [Ithaca, New York], thought the proposal sounded a little crazy, despite the fact that it was put forth by a committee he appointed. The plan called for establishing a site where people could legally shoot heroin — something that exists nowhere else in the United States. “Heroin is bad, and injecting heroin is bad, so how could supervised heroin injection be a good thing?” Mr. Myrick, a Democrat, said. But he also knew he had to do something drastic to confront the scourge of heroin in his city in central New York. (Foderado, 3/22)

The Associated Press: Veterans Are Using Pot To Ease PTSD, Despite Scant Research
A growing number of states are weighing whether to legalize marijuana to treat post-traumatic stress disorder. But for many veterans, the debate is already over. They're increasingly using cannabis even though it remains illegal in most states and is unapproved by the Department of Veterans Affairs because major studies have yet to show it is effective against PTSD. (3/22)

NPR: Houston Prepares Now For Zika's Potential Arrival This Summer
On March 10, Rep. Sheila Jackson Lee held a news conference at the Good Neighbor Healthcare Center in the part of Houston she represents. "What we're doing here today is having an intense briefing on the Zika virus with health professionals, working with the mayor and the city of Houston, the state and the country, to formulate the kind of partnership that can respond immediately," said Jackson Lee, a Democrat. Then she stepped aside, as the mayor, the assembled health officials and civic minded clergy all delivered a version of the same message: The Zika virus is coming to Houston, and we'd better get ready. (Palca, 3/21)

The Associated Press: Michigan Governor Plans Stricter Lead-Test Rules After Flint
Gov. Rick Snyder said Monday he wants Flint and the entire state to have more stringent lead-level regulations than what federal rules require, following the city’s water contamination crisis. In the long term, Michigan will comply with a “much higher standard,” according to a state document laying out the next steps in Flint in four areas — water supply and infrastructure, health and human services, education, and economic development. (Eggert, 3/21)

NPR: Baltimore Struggles To Protect Children From Lead Paint
When a doctor found that Kenicer Carty's 1-year-old daughter had a dangerously high level of lead last year, it triggered an alarm of sorts. Officials sent an inspector to Carty's 1930 row house in northeast Baltimore. It turned out that every single window had hazardous chipping lead paint. ... Baltimore banned lead paint in 1950, nearly 30 years before the rest of the country. Grassroots activism emerged early here, with a volunteer effort among parents in 1986. That became the national Coalition to End Childhood Lead Poisoning, which spawned the Green and Healthy Homes Initiative. Baltimore has seen a dramatic decline in cases of lead poisoning, down 86 percent since 2002. But despite these decades of effort, hundreds of Baltimore children are still poisoned every year. (Ludden, 3/21)

The Associated Press: Puerto Rico Doctor Ordered To Pay AFLAC $2M In Restitution
A Puerto Rico doctor found guilty in a multimillion-dollar federal fraud case has been ordered to pay a U.S. insurance company more than $2 million in restitution. The U.S. Attorney’s Office said Monday that Dr. Anibal Pagan Romero also was sentenced to 10 years in prison as part of a case in which hundreds of other people were prosecuted. (3/21)

The Washington Post: Our Kids Caught A $1,000 Cough. Be Careful: Yours Can Get It, Too.
One winter week, my 7-year-old twins started with stuffed noses and sore throats. We did what parents typically do: We broke out the throat spray, the cough syrup, the decongestant. Instead of going away, the problem got worse. The pediatrician did a test for strep, which came back negative. After that, he just shrugged and told us it was a viral infection, probably stemming from an allergy to dust and pollen. (Cunha, 3/21)

Kaiser Health News is an editorially independent operating program of the Kaiser Family Foundation. (c) 2016 Kaiser Health News. All rights reserved.

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