20 Oct 2023

Pitts: PBM reforms would boost insurer competition

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Congress is poised to crack down on the drug-industry middlemen responsible for inflating the price of medicines. Pending bipartisan legislation in the House and the Senate would rein in these “pharmacy benefit managers” and strengthen competition among health insurers. The big winners will be patients, who could save billions of dollars at the pharmacy.

PBMs act as brokers, negotiating with drug manufacturers on behalf of insurance companies. They decide which drugs each health plan covers, and at what price.

This decision-making power gives them considerable bargaining leverage, which they use to extract discounts from drug makers in exchange for steering patients towards one drug company’s product, rather than another’s — regardless of their therapeutic differences.

In theory, these negotiations ought to result in lower spending for patients. But it hasn’t worked out that way — because PBMs’ compensation is closely tied to the nominal “list” price of a given drug. Because PBMs take a cut of the drug’s total price, they have an incentive to steer patients towards more expensive drugs, even when cheaper ones are equally effective.

Meanwhile, the discrepancy between the list price of a drug and what insurers actually pay provides an excellent opportunity for insurance companies to bilk their customers at the pharmacy counter. They do so by basing coinsurance payments on the list price, rather than the discounted price.

For example, a PBM may negotiate the price of a drug listed at $400 down to $200. Say the insurance company the PBM is working for requires patients to pay 20% of the drug’s cost in coinsurance. The insurer then charges patients $80 out-of-pocket — 20% of the original price — instead of $40, or 20% of the discounted price. Patients don’t have a clue about the discounted price because those negotiations are conducted in secret. But insurers win by paying less and billing patients more.

Total PBM profits increased to $28 billion in 2019.

There’s little way for ordinary Americans to escape this racket. According to the American Medical Association, almost 70% of Americans with commercial health plans are insured through a company that is vertically integrated with a pharmacy benefit manager. This means both the insurer and PBM have an incentive to favor higher list prices for drugs, with no regard for the patients stuck with higher bills.

If an American wants to change providers to escape a particularly predatory pharmacy benefit manager, good luck. Just six PBM companies control 96% of the prescription medication market. Currently, it’s virtually impossible for smaller, independent PBMs to compete with the massive insurance-owned PBMs.

Congress must step in to rectify this anti-competitive situation. By ending the consolidation of the PBM market and allowing smaller PBMs to compete, Congress will be ensuring that prices come down and Americans will have more options for affordable and high-quality health care.

Shifting PBM compensation structure to remove the incentive to prefer expensive drugs will lower costs for patients, employers, and the government. Any discount secured by a PBM should be passed along to patients at the pharmacy.

Plenty is at stake if Congress fails to hold PBMs accountable. The cost of healthcare will continue to climb, and patients will get sicker. In some cases, they will forgo taking their medications as prescribed, adding billions of dollars in avoidable expenses.

Preserving the critical market features of our healthcare system and lowering costs for patients are not opposing goals. Increasing competition by breaking up and regulating PBMs will accomplish both.

Peter Pitts is a former associate commissioner of the Food and Drug Administration and President of the Center for Medicine in the Public Interest.

20 Oct 2023

‘The Canterville Ghost’ a welcome screen haunt

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The great perennial “The Canterville Ghost” based on a serialized 1887 short story by Oscar Wilde is back in the form of a “Downton Abbey”-esque, animated tale of an American family traveling from Boston to England and finding itself in a manor house haunted by a 300-year-old ghost. The film is notable for reuniting Stephen Fry and Hugh Laurie of “Jeeves and Wooster” fame. Fry, giving his vocal instrument a Boris Karloff-twist, voices the ghost Sir Simon de Canterville, who was bricked up in a portion of the house and left to die three centuries earlier.

Upon her arrival, Virginia Otis (an excellent Emily Carey of “House of the Dragon”), whose scientist father Hiram (David Harewood) calls her “Pumpkin,” comes across a history of “Canterville Chase” text and digs in. Her father wants to install modern electricity in the old manor. Her mischievous younger brothers Louis and Kent (a delightful Jakey Schiff and Bennett Miller) seek hijinks wherever they can find it. Virginia’s mother Lucretia Otis (Meera Syal) wants very much to fit in with local society and plans a dinner party.

Portraits of terrified previous owners of Canterville Chase adorn the walls in a very Harry Potter sort of way. We hear of a prophecy concerning a massive, dead almond tree. Before long, we meet the spectral Sir Simon in chains and spooking up a storm. Unfortunately, Sir Simon, who likes to quote Shakespeare, does not scare the Otises very much. Virginia almost ignores him. The boys play football (American-style) with his head. Sir Simon, who disappears in puffs of smoke, is decked out in green tights, blue boxers, a gold tunic and a big, ruffled collar. He wants to know why Virginia wears “breeches.” She explains that they are “riding breeches” and promptly rides out to meets her rather hapless love interest Henry Fitz Humphreys, the Duke of Cheshire (a fun Freddie Highmore). Eventually, we learn that Sir Simon was suspected of murdering his beloved wife Eleanor (Elizabeth Sankey). Virginia takes on the task of lifting the curse upon Sir Simon.

Also in the film’s remarkable voice cast are Imelda Staunton as the cook and housekeeper Mrs. Umney, Toby Jones as the local vicar The Reverend Chasuble and Miranda Hart (TV’s “Call the Midwife”) as a inventive, ghost-chasing friend of the Reverend. Laurie has less to do as the voice of Death.

Directed by Kim Burdon (“Fireman Sam”) and Robert Chandler (TV’s “Boy George: One on One”), this “Canterville Ghost” is not the first animated adaptation of Wilde’s story, which has been adapted many times before (there was a 1970 Soviet animated film, believe it or not).

The role of Sir Simon has been previously played by Patrick Stewart and John Gielgud. The most famous adaptation was the 1944 American feature film, starring a wonderful Charles Laughton as Sir Simon, Robert Young as an American WWII soldier, child actor Margaret O’Brien and Una O’Connor. A 1966 ABC TV movie musical of Wilde’s story featured Douglas Fairbanks, Jr. and Michael Redgrave and music by “Fiddler on the Roof” songwriters Jerry Bock and Sheldon Harnick. This latest “Canterville Ghost” might not be the best. The computer-generated animation is not exactly inspired. The hit-and-miss screenplay boasts a “ghostbusters” joke. But like Noel Coward’s much adapted “Blithe Spirit,” “The Canterville Ghost” is always welcome.

20 Oct 2023

Sly Stone doesn’t come across as ‘Everyday People’ in memoir

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Here is the most telling sentence in Sly Stone’s autobiography: “I would say that drugs didn’t affect me too much, but I didn’t have to be around me.”

In the works for more than a decade, “Thank You (Falettinme Be Mice Elf Agin)” is about drugs a lot of the time. And it’s about Stone not owning up to his responsibilities — musical appearances, child support payments, fidelity — much of the rest of the time.

Written with music biographer Ben Greenman and “created in collaboration with Sly Stone’s manager, Arlene Hirschkowitz” (whatever that means), “Thank You” is a peculiar book. It captures what one assumes is Stone’s voice — laconic, fond of wordplay, non-judgmental — but also dispassionately observes his life from the point of view of someone who is outside it. This reaches its nadir in an odd chapter about Stone guest-hosting “The Mike Douglas Show,” which seems to have been written by a stranger who watched the episode on YouTube and wrote down everything they saw.

Credit Stone for candor when he describes, for instance, shooting his pit bull after it mauled his infant son or pointing at a woman he doesn’t know with a gesture somehow universally recognized as meaning, “You’re with me from now on,” or attempting to assault a man he caught in bed with his partner, despite the fact that Stone regularly cheated on her.

Stone is equally parts charming and infuriating in “Thank You,” which is most valuable for its documentation of 1967-1973, the years in which Sly and the Family Stone were making joyful hits. Their versatility and dexterity were given a boost two years ago by Questlove’s Oscar-winning “Summer of Soul” documentary, which included them performing “Sing a Simple Song” and “Everyday People.” (Questlove’s publishing imprint is releasing “Thank You.”)

Stone doesn’t seem especially interested in revisiting the creation of those songs but “Thank You” does capture the milieu they sprang from and the vibe he hoped to convey. Maybe the best thing about the book is that it will lead music fans to dive back into that incredible catalog.

“Thank You (Falettinme Be Mice Elf Agin)”

By Sly Stone, with Ben Greenman.
AUWA, $30, Grade: C+

Tribune News Service

20 Oct 2023

Higgins: Plenty of pork spending in Davis-Bacon

by | posted in: Politics | 0

Forcing federally funded public works projects to pay the so-called prevailing wage is a classic case of robbing Peter to pay Paul. The intention behind the Davis-Bacon Wage Act, which requires any federal project to use prevailing wages, is to boost worker pay. The practical effect is to substantially drive up the cost of those projects.

Those costs are ultimately paid for with taxpayer dollars, so it is ordinary citizens shouldering the higher costs. Instead, the government should institute a genuinely competitive bidding process, which would save taxpayers money.

The Davis-Bacon Act was passed in 1931 and was initially meant to counter a Depression-era practice of literally busing in workers from a lower-paying region so employers didn’t have to hire local workers who would not work for the wages being offered.

Busing in unskilled labor is rarely a factor with the law, as most federal projects involve skilled labor. The present-day purpose behind the Davis-Bacon Act is to boost unions. The Labor Department’s Wage and Hour Division is the entity that surveys businesses and determines the prevailing wage for these types of projects. This wage mirrors what companies with collective bargaining contracts — union wages — pay their workers.

Unions that drive up their members’ wages are thus protected from the economic consequences of doing that if their business involves federal contracts because non-unionized businesses will have to pay the same wages and therefore lose any wage-price advantage. The AFL-CIO is one of the main boosters of the law, unsurprisingly.

The Congressional Budget Office estimated in 2022 that getting rid of the Davis-Bacon Wage Act would save taxpayers $16.7 billion over the next decade. That’s enough to buy a state-of-the-art aircraft carrier and still have a few billion left over.

The act makes everything more expensive than it would otherwise be, though estimates of how much vary. The Beacon Hill Institute found that the act raises construction costs by more than 7%. The Government Accountability Office study of the Washington metro area’s Metro transit system found Davis-Bacon likely raised costs for the project by $149 million in 1980 dollars (about $588 million in 2023 dollars), the Washington Examiner noted in a 2021 report.

It’s not like workers need help getting their wages to rise. That’s happening on its own, thanks to a historically tight labor market. According to the Labor Department, overall wages have risen by 4.3% nationally in the last year.

Bear in mind that these workers are already subject to their state’s minimum wage laws, which in 15 cases now exceed $13 an hour. That’s assuming the pay for the jobs would even be affected by minimum wage laws. Federal projects usually involve skilled work that already pays well above any minimum.

Davis-Bacon prevents the bidding from being genuinely competitive, it raises the costs for taxpayers, and it delays projects when needed. We would be better off without it.