Life Science Compliance Update

March 20, 2017

2016-2025 Projections of National Health Expenditures Data Released

Spending

National health expenditure is expected to grow an average of 5.6% annually from 2016 through 2025, according to a report published by Health Affairs (authored by the Centers for Medicare & Medicaid Services’ (CMS) Office of the Actuary (OACT)).

National health spending growth is projected to outpace projected Gross Domestic Product (GDP) growth by 1.2%. The report also projects that the health share of GDP will rise from 17.8% in 2015 to 19.9% by 2025. Growth in national health expenditures over this period is likely to be largely influenced by faster growth in medical prices, as compared to recent historically low growth.

For 2016, the report notes that total health spending is projected to have reached nearly $3.4 trillion, a 4.8% increase from 2015. The report also found that by 2025, federal, state and local governments are projected to finance roughly 47% of national health spending, a slight increase from 46% in 2015.

“After an anticipated slowdown in health spending growth for 2016, we expect health spending growth to gradually increase as a result of faster projected growth in medical prices that is only partially offset by slower projected growth in the use and intensity of medical goods and services,” says Sean Keehan, the study’s first author. “Irrespective of any changes in law, it is expected that because of continued cost pressures associated with paying for health care, employers, insurers, and other payers will continue to pursue strategies that seek to effectively manage the use and cost of health care goods and services.”  

Additional findings from the report include:

  • Total national health spending growth: Growth is projected to have been 4.8% in 2016, a bit slower than the 5.8% growth in 2015, likely because of slower Medicaid and prescription drug spending growth. In 2017, total health spending is projected to grow by 5.4%, expected to be led by increases in private health insurance spending.
  • Medicare: Medicare spending growth is projected to have been 5.0% in 2016 and is expected to average 7.1% over the full projection period of 2016 through 2025. Faster-than-expected growth after 2016 primarily reflects utilization of Medicare-covered services increasing to approach rates closer to Medicare’s longer historical experience.
  • Private health insurance: Spending growth is projected to have slowed from 7.2% in 2015 to 5.9% in 2016, a trend that is related to slower growth in private health insurance enrollment. Spending growth is projected to increase to 6.5% in 2017, due in part to faster premium growth in Marketplace plans related to previous underpricing of premiums and the end of the temporary risk corridors.
  • Medicaid: Projected spending growth slowed significantly in 2016, down to 3.7%, down from 9.7% in 2015, largely reflecting slower growth in Medicaid enrollment. Spending growth is expected to accelerate and average 5.7% for 2017 through 2025 as projected per-enrollee spending growth rises over that timeframe. The increasingly larger share of the Medicaid population who are aged and disabled and who tend to use more intensive services is likely to drive that impetus.
  • Medical price inflation: Medical prices are expected to increase more rapidly after historically low growth in 2015 of 0.8% to nearly 3% by 2025. This faster projected growth in prices is influenced by an acceleration in both economy-wide prices and medical specific prices and is projected to be partially offset by slowing growth in the use and intensity of medical goods and services.
  • Prescription drug spending:  Drug spending growth is projected to have been 5% in 2016, following growth of 9% in 2015, mainly due to slowing use of expensive drugs that treat Hepatitis C. Growth is projected to average 6.4% each year for 2017 through 2025, likely influenced by higher spending on expensive specialty drugs.
  • Insured Share of the Population: The proportion of the population with health insurance is projected to increase from 90.9% in 2015 to 91.5% in 2025.

February 15, 2017

Product Price Hikes - When Business and Compliance Collide

Url

2016 was the year of the price increase, as leading industry players experienced significant public outrage over what appeared to be extreme price increases. What is compliance’s role when it comes to price increases? Does the ethics and compliance function get to weigh in on how decisions to raise the prices of products are reached, or does this function lie solely with the business? This article explores those questions.

It is safe to say that in the life sciences regulatory world, 2016 was the year of the price increase, as leading industry players experienced significant public outrage over what appeared to be extreme price increases. 

Investigations, subpoenas and congressional hearings led to settlements and fines, as in early December 2016, Pfizer was charged a record £84.2 million fine by the UK’s Competition and Markets Authority (CMA) for the overnight price increase of 2,600% for an epilepsy drug. The CMA did not stop there, and went further to also fine the distributor Flynn Pharma £5 million for its part in the pricing scheme. Although Pfizer is currently appealing the findings, it is alleged that prices for the drug in the UK were many times higher than elsewhere in Europe and that “the companies deliberately exploited the opportunity offered by de-branding to hike up the price for a drug which is relied upon by many thousands of patients”. CMA added that “these extraordinary price rises have cost the NHS and the taxpayer tens of millions of pounds”.

Read the full article in the February 2017 issue of Life Science Compliance Update

To Read the Full Story, Subscribe, Download a Sample Issue, or Sign In
PM_LSCU_Box

February 13, 2017

Avoiding the Patient Assistance Program Spotlight

Pill_bottles_cash

In efforts to understand the rising cost of some drugs, Patient Assistance programs, particularly independent foundations, have become a focus of government investigations. This article explains what PAPs are, why they may be viewed as suspect and provides tips for providing patient assistance in a compliant manner.

While Patient Assistance Programs (“PAPs”) have existed for many years, lately, industry support of PAPs has come under increased government scrutiny. Before 2013, PAPs were under the radar as the government focused its Anti-Kickback Statute (“AKS”) violation investigations on hospitals and physicians.

The continuing drug pricing controversy has shifted the focus of AKS investigations, spurred by the proposed correlation between drug prices and donations to PAPs. Recently, PAPs have become a target of both the United States Department of Justice (“DOJ”) and the Department of Health and Human Services Officer of the Inspector General (“OIG”).

Read the full article in the February 2017 issue of Life Science Compliance Update

To Read the Full Story, Subscribe, Download a Sample Issue, or Sign In
PM_LSCU_Box

Newsletter


Preview | Powered by FeedBlitz

Search


 
Sponsors
March 2017
Sun Mon Tue Wed Thu Fri Sat
1 2 3 4
5 6 7 8 9 10 11
12 13 14 15 16 17 18
19 20 21 22 23 24 25
26 27 28 29 30 31