Is Emflaza the Latest Drug Pricing Rip-off or Not?

New Money from Old Drugs.  Are children with muscular dystrophy being served by the free market or taken advantage of?

I suspect that it is just because people are paying attention, but reports of unexplainably excessive pricing of both new and old drugs keep coming too fast to keep up with. I recently published a list of 447 drugs whose prices doubled or more between 2011 to 2015. Even that list was incomplete!  This week’s prize winner is Emflaza, a drug that was recently approved by the Food and Drug Administration (FDA) to treat Duchenne Muscular Dystrophy (DMD).

The price proposed by Marathon Pharmaceutical, LLC is $89,000 per patient per year. We may be getting desensitized to such patient-bankrupting offerings, but what makes Emflaza stand out from the offending crowd is that in Canada, where some of the original research appears to have been done, the same drug for the same disorder costs a dollar a pill or less.  As noted in the Wall Street Journal, the price set by Marathon is 50 to 70 times what most U.S. patients currently pay to buy the drug (illegally?) from on-line pharmacies in the United Kingdom.  The more I learned about Emflaza, the more troubled I became.  Allow me to share some of my discomfiture with you. Continue reading “Is Emflaza the Latest Drug Pricing Rip-off or Not?”

Should Kentucky Physician Assistants Prescribe Controlled Substances?

Kentucky’s high rates of opioid prescription must be reduced before even more prescribers are added. National data suggest that adding Physician Assistants to the prescribing mix is unlikely to reduce the number of opioid prescriptions written. 

Louisville’s Courier-Journal this week featured an opinion piece by Andrew Rutherford, President of the Kentucky Academy of Physician Assistants, advocating for the passage of Kentucky Senate Bill 55 which would authorize physician assistants in Kentucky to prescribe controlled substances. Emphasizing the stakes involved in the proposal, articles later in the week reported on the latest rash of opioid overdoses in our region– presumably due to the inevitable fentanyl-enhanced “bad batch” of heroin.  Several on-line commenters to the second articles suggested that since those who overdosed had made their own risky-decisions, that they should be permitted to suffer the consequences without an intervention of attempted resuscitation. It is suggested that this Darwinian mechanism would ease the opioid abuse problem.  Unfortunately however, among the personal choices leading to opioid addiction is the choice to visit a licensed healthcare professional who, with good intentions or not, prescribes opioids.  Once an individual becomes addicted, the concept of “choice” become irrelevant.  A reasonable question to be asked is, “Do we really need to put more opioids in the hands of Kentuckians?  My answer would be an emphatic no. Continue reading “Should Kentucky Physician Assistants Prescribe Controlled Substances?”

Exorbitant Increases in Prescription Drug Prices Neither New Nor Uncommon.

At least 447 Medicare outpatient drugs had prices more than double between 2011 and 2015 and 36 increased their prices ten-fold!

In every week of recent months our attention is being called to one or another exorbitant or unexplainable increase in the price of yet another prescription drug. We have long recognized continuously rising prices for brand-name drugs, but the new business model of the pharmaceutical industry includes taking control of the distribution of traditionally generic drugs and jacking prices up even faster and higher than their brand-name cousins– if that is even possible.  It appears that the more medically-necessary or lifesaving the drug is, the higher the price increases are. This is what happens in a free market environment when an industry has its consumers over a barrel and is free to have its way with them.

Some poster-children of the trend include the anti-parasitic drug pyrimethamine (Daraprim) which is essential to treat certain infections in immunosuppressed people and whose price per tablet increased from $13.50 to $750 overnight; the EpiPen injector system used to administer epinephrine to people entering anaphylactic shock; insulin for diabetes; Plaquenil, and more recently Suboxone, the drug used to help manage opioid addiction.  As I will show below, there are many more drugs with recently inflated prices still cruising below the radar! Continue reading “Exorbitant Increases in Prescription Drug Prices Neither New Nor Uncommon.”

Gov. Bevin Reappoints His Original Ten-Person Board of Trustees for UofL

Breaking Information:

The Governor’s office released today Governor Bevin’s list of 10 appointments to a replacement Board of Trustees for the University of Louisville.  With a single exception, all 10 are the same as the Board he appointed earlier in 2016.

Newly appointed Trustees:
J. David Grissom, of Louisville, until Jan. 13, 2023.
John H. Schnatter, of Louisville, until Jan. 13, 2022.
Sandra Frazier, of Louisville, until Jan. 13, 2021.
Nitin Sahney, of Prospect, until Jan. 13, 2021.
Bonita K. Black, of Crestwood, until Jan. 13, 2020.
Brian A. Cromer, of Louisville, until Jan. 13, 2020.
Ulysses Lee Bridgeman, Jr., of Louisville, until Jan. 13, 2019.
Ronald L. Wright, MD, of Prospect, until Jan. 13, 2019.
James M. Rogers, of Prospect, until Jan. 13, 2018.
Diane B. Medley, of Ekron, until Jan. 13, 2018.

The exceptions are that James Rodgers is appointed instead of Dale Boden.    In the first set, Douglas Cobb was appointed, but resigned shortly afterwards to be replaced by Brian Cromer who is on the list above.

I have commented on all of these at length, including an analysis of the application documents used for the first appointment process.  It is difficult for me to believe that the Nominating Committee that met last week, with 3 of its 7 members on that day new to the committee, had any meaningful independent influence on this intensely political appointment process.  Surely this was a done-deal from the start.

Peter Hasselbacher, MD
President, KHPI.
Emeritus Professor of Medicine, UofL
3:10 pm, Jan 17,  2017

Nomination Process for New UofL Board of Trustees Underway

Major twist in the story line!

postsecondary-educ-nominating-1The Governor’s Postsecondary Education Nominating Committee is presently in Executive Session in Frankfort selecting candidates to present to the governor for appointment to the University of Louisville Board of Trustees as described by new legislation passed by the Kentucky Legislature earlier this week.  Thirty names will be presented to  Gov. Bevin from which he is entitled to select 10, subject to approval by the Kentucky Senate.  This is a brand new process that is different from the previously uniform statutory requirement for Board appointment at Kentucky’s other major state universities.  I was told that the names of these candidates will not be released to those of us waiting in the hall when the Committee leaves its executive session. I suspect that the names that have been selected will come from the same binders used to appoint the first 10-person Board of Trustees last Spring. It remains to be seen to what extent the statutory protocols or actions of the nominating committee are different in any other way from the tightly controlled political processes used in the past by this governor or others. For example, it is not at all obvious that Governor Bevin elicited recommendations for his new Nominating Committee as required by statute.

What is newsworthy at the moment is the major change the Governor has made in the composition of his Nominating Committee. Announced just today is the replacement of three Committee members by new ones who are now in their first meeting ever.  To inspection, the new appointments to the Nominating Committee go a long way towards repairing a committee which was by statute illegally constituted by almost every parameter. There are now three women and two racial minorities on the 7-member Committee.  At least one of these is a Democrat, but the political party affiliation of all the rest is not yet known to me.

Obviously the Governor has been sensitive to criticism by me and others that his own committee was more “illegally” constituted than the UofL Board he sought to replace for the same reason.  That contradictory logic belied any other motives that might have been or still are operational.  Nonetheless, what is going on now represents a major deviation from past practices, and the product of the committee meeting remains to be analyzed.

This article has been amended.

Peter Hasselbacher, MD
Emeritus Professor of Medicine, UofL
January 13, 2017.  12:55 pm

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Additional Details About Separation of UofL and KentuckyOne Health Emerge.

Much remains to be worked out.  University of Louisville Hospital Profitable but CHI and KentuckyOne Health suffering major financial losses.

Claimed to be effective as of Dec 14, an initial document initiating the separation and anticipated divorce of the University of Louisville and KentuckyOne Health became available today, December 22.  Given the complexity of the existing contractual partnership and some earlier hints of marital conflict, the 3-page document submitted as an amendment to the original Joint Operating Agreement (JOA) is surprisingly both short and bland.  The principal function of the amendment is to change the term length of the original agreement from 20 years to an ending date 6 months away on June 30, 2017 at which time University Medical Center, Inc. (UMC) resumes its pre-marital control of the entirety of University of Louisville Hospital and the James Graham Brown Cancer.  It is obvious that many consequent details remain to be revealed or worked out. Indeed, the document anticipates that additional counterparts to the amendment will be added.

A 6-month wind-down period for one spouse to leave the house in an orderly manner is specified by the conflict resolution agreements of the JOA.  Although not specifically mentioned in the amendment, the change of termination date triggers a cascade of other important actions of which the most important is that the complex interlocking operational Academic Affiliation Agreement (AAA) also becomes void on June 30.  A new AAA has been prepared well ahead of schedule.  It has reverted to a traditional Affiliation Agreement used between UofL and its hospital partners and returns control of all academic, clinical, educational, research, financial, and hopefully ethical matters back to the University where such belongs.  Hooray! Continue reading “Additional Details About Separation of UofL and KentuckyOne Health Emerge.”

State Auditor’s Report On Governance of UofL and Its Foundation Relationship Highly Critical.

New University and Foundation leadership a breath of fresh air.

I went to Frankfort today for an early look aaudit-pix-12-14-16t the long-awaited result of Kentucky’s Auditor of Public Accounts of the relationship between the University of Louisville and its investment arm, the University of Louisville Foundation.  Alas, even before the press conference began, most of the major news outlets in Louisville had already published in-depth reports of the Auditor’s findings.  [Their reporters had access to an embargoed early release of the full report. My request for that opportunity went unanswered.]  My observations of those who spoke or asked questions at the session interpreted the report as highly critical of how the University and Foundation interacted under the administration of Former President James Ramsey– except for Dr. Ramsey’s attorney who termed the report a disservice to the community.  I will not duplicate the reports of  Chris Otts of WDRB, Tom Loftus of the Courier Journal, Kate Howard of the Kentucky Center for Investigative Reporting, Joe Sonka of Insider Louisville, Kyeland Jackson of the Louisville Cardinal,  or whatever other entity picks up this important story; but I encourage my readers to read some of these reports yourselves.  You can read a summary handed out at the session here, and a rebuttal offered by Dr. Ramsey’s attorney, Steve Pence.  The full report is available on the Auditor’s website.  It contains  responses by current leadership of the University and Foundation, a response by Former President Ramsey, and a rebuttal to that response by the Auditor’s office.  A video of the conference is also available. I have just begun to analyze the full report myself. At least read its Executive Summary, duplicated here, which contains specific recommendations. The summaries look rather damming to me, as was in my opinion the whole presentation by Auditor Mike Harmon. Continue reading “State Auditor’s Report On Governance of UofL and Its Foundation Relationship Highly Critical.”

Dr. David Dunn Receives $1.15 Million While Parting From UofL

A lot happened today at the Executive Committee meeting of the UofL Board of Trustees.  I was unable to attend. It is being reported that UofL and KentuckyOne Health are dissolving the Joint Operating Agreement under which KentuckyOne managed most of the clinical activities of University of Louisville Hospital. I do not yet have access to the details of the dissolution process which had a myriad of contractural agreements to settle including penalties and non-compete clauses. I hope to be able to provide an analysis in coming days. Much may be revealed in the fine print, including why KentuckyOne will continue to put money into University Hospital.  The two entities have agreed to prepare new Academic Affiliation Agreements that would allow UofL faculty and trainees to interact at Jewish Hospital, and for Jewish Hospital to capture the financial, research, and reputational advantages of being a teaching hospital.

Another matter that was apparently dealt with at today’s meeting was the status of Dr. David Dunn, one of the principal architects of the agreements with CHI and KentuckyOne, but who has been on the sidelines for many months while he was being investigated by the FBI for possible misuse of federal money,  To my knowledge, the status of that investigation has not been made public.  Dr. Dunn has been being paid one of the very highest salaries in the University even though his contract has reportedly expired.

Today, the status of Dr. Dunn has apparently been settled. The University provided the statement below in response to my request for an update:

“The University of Louisville and Dr. David L. Dunn have reached an agreement related to his employment at the university. As of Dec. 12, 2016, Dr. Dunn is no longer an employee of the University of Louisville. Dr. Dunn leaves the university as a tenured, full professor in good standing. To compensate for his relinquishing his tenured position, Dr. Dunn will receive $1.15 million.”

Some have speculated that the Board has taken no action with respect to Dr. Dunn because it agreed not to take other than “routine” actions in a settlement of a lawsuit by a group of community ministers over the racial make-up of the Board. Perhaps no action was appropriate.  The Board recently prefaces its retirement into executive session by declaring that it is for “routine” matters only. I must say that I felt uncomfortable with the optic earlier this month when the full Board terminated the tenure of an African-American faculty member.  To that person, no matter what the merits of the situation, the termination action was hardly routine. I would argue that an agreement to deal only with routine or non-structural matters no matters longer holds any water and in fact has already been abandoned.  That is as it should be!  Dissolution of the Joint Operating Agreement is no more or less routine than granting degrees, approving a budget, hiring fiduciary auditors, granting or removing tenure, or for that matter, raising tuition. Perhaps there are legal niceties of language to be honored, but this Board is doing exactly  exactly what needs to be done and must be allowed to do in an unfettered manner.

Peter Hasselbacher, MD
Emeritus Professor of Medicine, UofL
President, KHPI.
December 13, 2016

Somethings Big Are In The Air

The Executive Committee of the UofL Board of Trustees is assembling now. The executive committee can act for the whole. I predict it will vote on the relationship with KentuckyOne Health. It is likely the vote will involve severance of the joint operating agreements. UMC would then take control of the entire Hospital. From what I have heard, and because of recent financial events, I will be surprised if this does not happen.

Tomorrow the State Auditor will announce the results of the audit of the relationship between the University and its Foundation. I understand that the audit will not be kind.

We will soon know more.

Peter Hasselbacher

Drop In Value of UofL Endowment Confirmed.

Endowment growth stalling compared to other institutions.

Numerous earlier reports by Mr. Chris Otts of WDRB brought to the attention of the public information about financial dealings of enough concern that at least two major donors to the University of Louisville withdraw their support, triggering in large measure an intervention by the University of Board of Trustees to take a more controlling role in the University of Louisville Foundation and a full-scale fiduciary audit. This latter offers the potential to clear the air or to lead to even more troublesome revelations. Mr. Otts’s latest report  deals with unauthorized spending of the University’s endowment by the Foundation in support of its commercial research, real estate, and other agendas both known and unknown. The result has been a substantial fall in the value of the endowment as its principal is consumed.

Sparked by Mr. Otts’s use of information provided to him by the University as reported to the American Association of College and University Business Officers (NACUBO); and by comments made by Trustees Greenberg and Benz at last week’s meeting of UofL Trustees raising serious concerns about the endowment; I went to NACUBO’s website myself.  Summary files for public use are available including the market values of the endowments of some 850 of the most important Colleges and Universities in the US and Canada from 1990 to 2015.  I abstracted these and plotted the market value of UofL’s endowment along with its rank among other institutions in this regard. Spending information or investment yields for individual institutions are not made available to the public, although summary statistics on aggregates in broad categories are available. A static image is presented below, and an interactive version revealing the underlying data is available.

In summary, the amount of our endowment rose progressively from 1990 until around 2007 after which much volatility occurred to the point that the market value of the endowment in 2016 is indeed less than it was 10 years ago in 2006!  UofL appears to be eating its nest egg, and compared to other institutions of higher education, is losing ground in endowment growth.

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Continue reading “Drop In Value of UofL Endowment Confirmed.”