Subject: POLITICO Pulse, presented by PhRMA: What Valeant's CEO will tell the Senate today — Zika funding deal might not come until next month — Did United's bad pricing strategy lead to its Obamacare problems?
From: POLITICO Pulse <[email-masked]>
To: <[email-masked]>
Date: Wed, 27 Apr 2016 08:02:55 -0600

By Dan Diamond | 04/27/2016 10:00 AM EDT

There's Republican infighting over Zika funding, and CDC just dropped a massive report crammed with national health data. But first: A preview of today's bruising Senate hearing on drug prices.

WHAT VALEANT CEO WILL TELL THE SENATE: WE WERE 'TOO AGGRESSIVE' ON PRICE INCREASE - That's according to prepared testimony from Michael Pearson, who's striking a conciliatory tone ahead of the Senate Aging Committee's hearing on drug prices this afternoon, Pro's Sarah Karlin-Smith reports.

- Regrets? The outgoing CEO has a few. The infamous drug company has made "mistakes" Pearson writes, particularly being "too aggressive in pursuing price increases on certain drugs." He also regrets pursuing transactions where a "central premise" was to buy older drugs and increase the price. 

 - But he also thinks the Senate's getting Valeant's story wrong. Pearson tried to frame the Valeant drug price hikes as outliers, noting the committee's investigation has focused on just three of the company's 1,800 products. He also emphasized Valeant's investment in R&D and its commitment to programs that assist patients in paying for drugs.

- Moving forward. Pearson may be leaving Valeant, but he said the company is working to rethink its approach to drug pricing, and that it will "track industry norms." And he testifies that its new policies will involve greater formality and "reflect the painful lesson we have learned over the last year."

More details and witness list for the hearing, which starts at 3:30 p.m. ET: http://go.politicoemail.com/?qs=b4f8aeb80d0765d918f2e7de5a50004ad995c7f3f4a8edf5a4e1c99a2facdd4e

See Pearson's testimony.

12.2 percent. That's how much drug list prices went up last year, according to a recent IMS Health report - and don't be surprised to hear that number cited at today's hearing. But it's worth noting that list prices don't account for the discounts and rebates that many patients, providers and insurers receive to defray the cost of the drugs.

WHAT HOUSE DEMS ARE SAYING TO VALEANT: YOU'RE NOT PLAYING BALL - A memo from the House Oversight Committee Democrats obtained by POLITICO indicates Valeant is not fully cooperating with its investigation in drug price hikes. 

According to the memo, Valeant withheld documents from the committee claiming they were protected by attorney-client privilege, but it later became clear that the documents weren't covered by that privilege. These documents, which included financial analyst reports prepared by multiple firms, indicate "that the U.S. government is now paying the company more than $1 billion a year because of its massive price increases," the Democrats argue.

- Valeant as symptom of bigger issues. The documents also show how widespread these abuses are across the entire drug industry, Ranking Member Elijah Cummings told POLITICO. The memo indicates that members have ongoing concerns about other documents the company continues to withhold from the House committee too.

WELCOME TO WEDNESDAY PULSE - Where I'm still counting the votes from last night's primaries. Tips to [email-masked] or @ddiamond on Twitter.

With help from Sarah Karlin-Smith (@SarahKarlin).

ZIKA FUNDING: LOTS OF SPARRING, NOT A LOT OF PROGRESS - Sens. Lindsey Graham and Roy Blunt on Tuesday took a dig at their Republican counterparts in the House, as grumbling over Zika funding evolved from a partisan fight to a cameral one, too. "We're well along in this process," Blunt said. "I think the House is not where we are yet in terms of dealing with this issue and I'd like to see them get a little further along." 

According to Graham, who's helping negotiate the package, it's not clear whether a deal would be unveiled before the Senate departs on Friday for a week-long recess.

AT HOUSE E&C TODAY: OPIOID MARKUP CONTINUES - The committee at 10 a.m. resumes its multi-day markup of 12 bills intended as a counterpart to the Senate's CARA legislation. Rep. Frank Pallone on Tuesday said he hoped the package could pass the committee this week and be brought to the House floor in May.

Details: http://go.politicoemail.com/?qs=b4f8aeb80d0765d9aafe64599ca8815b305fa9118f959be7eb05370c4fd15c8f

GROUPS LOBBY SENATE AG APPROPRIATORS ON DRUG COMPOUNDING - Six groups are calling on Senate appropriators today to ensure that the language in the FY 2017 agricultural spending bill "does not impede FDA's ability to ensure patient safety" by hampering new guidance on drug compounding.

The groups - an unusual coalition that includes the American Public Health Association, Biotechnology Industry Organization, Generic Pharmaceutical Association, Pew Charitable Trusts, Pharmaceutical Research and Manufacturers of America and Trust for America's Health - urge Sens. Thad Cochran, Barbara Mikulski, Jerry Moran and Jeff Merkley to avoid creating exemptions to the FDA's recent draft guidance on compounding.

"As the fungal meningitis outbreak demonstrates, access to compounded medicines must not come at the expense of quality and patient safety," the groups write in a letter.

Read the letter: http://go.politicoemail.com/?qs=b4f8aeb80d0765d972474b04cbd6baec5ab945311188eb050c7a7020d48b834a

UNITEDHEALTH'S OBAMACARE EXIT: THE COST OF BAD PRICING? - The nation's largest insurer is pulling out of dozens of state marketplaces this year, saying that it's losing money on its Obamacare plans. But a Kaiser Family Foundation expert argues that United only has itself to blame.

"The thing is, this really says more about UnitedHealthcare than it does about the ACA," Larry Levitt writes in the JAMA Forum. "The company's plans were often not competitively priced, with UnitedHealthcare offering 1 of the 2 lowest premium plans in only 35 percent of the counties where it participated."

More from Levitt: http://go.politicoemail.com/?qs=b4f8aeb80d0765d92e27042dc64ef89531434da6d1c3f5acc830951222e2a1c9 

See KFF's state-by-state analysis of UnitedHealthcare's exchange participation: http://go.politicoemail.com/?qs=b4f8aeb80d0765d97e57233db99c7565022c534f367224cff0a41927fd3b1f97 

ICYMI: CENTENE'S OBAMACARE SUCCESS STORY - The Medicaid health plan operator closed the first quarter with 680,000 exchange customers in 15 states, says it's turning a profit on the ACA exchanges and isn't ruling out expanding into additional markets, CEO Michael Neidorff said on an investor call yesterday. "Centene's exchange experience continues to be favorable," he stressed.

- Don't expect Centene to step in where United fell out, however. The two companies pursued different patient populations on the exchange, Neidorff said, with United customers opting for broader, more expensive plans than the low-price plans that Centene usually offers. "They're in a different market than we are, from what I can see," Neidorff pointed out.

- Wall Street liked Centene's news. The company's stock price traded up more than 6 percent yesterday, a tidy $500 million bump in Centene's market capitalization.

WONK OUT: 400-PLUS PAGES OF NATIONAL HEALTH CARE STATISTICS - A comprehensive annual report out from CDC this morning offers loads of national data on everything from coverage expansion and electronic health record adoption to use of colorectal tests and the number of dentists by state. CDC calls it the "report card on the nation's health," but it's essentially an encyclopedia crammed with information on trends across health care. It's accompanied by a special feature on disparities.

Read the report: http://go.politicoemail.com/?qs=b4f8aeb80d0765d9e14d67458a45135e651821f0215b4028990979b1c7733406

** A message from PhRMA: Biopharmaceutical intellectual property (IP) protections, such as patents, provide the incentives that spur research and development and lead to lifesaving treatments and cures. Learn more here about the outcome of strong IP policies. **

THIS MORNING: DOCTORS WITHOUT BORDERS PETITIONS PFIZER - The humanitarian group will place 2,500 flowers in an empty crib outside the drug maker's headquarters in New York City, as part of an ongoing protest. 

What's behind the dramatic gesture? Doctors Without Borders says the flowers represent the number of children who die from pneumonia around the world each day, although the number would be lower if Pfizer and GlaxoSmithKline sliced the price of the pneumonia vaccine to $5 per child.

U.S. GETTING MORE PREPARED FOR EMERGENCIES, BUT SOME STATES LAG - That's according to a new RWJF survey that found a wide range in how states are prepared to handle health emergencies. Overall, the United States scored 6.7 in a 10-point preparedness index, a 3.6 percent increase since the survey launched in 2013.

One reason why preparedness matters: The threat of Zika virus this summer, especially in Southern states. Many states that could be affected by the virus lagged in the survey, and while much still isn't known about Zika, "we do know [that] having adequate lab testing for this type of virus is important," says Glen Mays, the University of Kentucky professor overseeing the survey. "Not all states have that capability."

See the report: http://go.politicoemail.com/?qs=b4f8aeb80d0765d925d659100843f44139b34eb69743fffb60cd0a218bdc60d3 

States that are the most prepared
. Maryland (7.6)
. New York (7.5)
. Minnesota (7.4)

States that are the least prepared
. Louisiana (5.6)
. Montana (5.7)
. Arizona, Mississippi (5.8)

HOW SLOW YOU'LL GET - An interactive tool developed by a Yale economist is intriguing, if depressing: It predicts how much you'll lose off your peak swimming and running times as you age. Enter your data, if you dare: http://go.politicoemail.com/?qs=b4f8aeb80d0765d97543746967f3868eaac73cadaedc7a0519f90f1c57ac069b (via the NYT's Gina Kolata)

WHY NO PUERTO RICO? - Yesterday's PULSE reported on Leapfrog Group's latest hospital rankings, which found that Washington, D.C.'s hospitals ranked the worst overall on quality and safety. But one reader was less concerned by the poor performance of D.C., and more attuned to which territory was MIA - as usual.

"I was surprised that D.C., not Puerto Rico, appeared dead last in the survey," former Puerto Rico Secretary of State Kenneth McClintock writes PULSE. "Then I read the fine print - even though Puerto Rico is part of our nation's health system with six times more population than D.C., Puerto Rico was excluded."

HAVE YOU HEARD THE WORD? - Stay tuned.

WHAT WE'RE READING

HHS is set to expand the National Diabetes Prevention Program, and leaders from the American Diabetes Association, American Medical Association, YMCA and Omada Health explain why the initiative matters: http://go.politicoemail.com/?qs=b4f8aeb80d0765d9c8d491e1d639e817ba0ba645dae683adab766c6cd4b4edfc

Vox's Julia Belluz on how "Big Tissue" is engaged in a PR war to make us think that bathroom hand dryers spread disease: http://go.politicoemail.com/?qs=b4f8aeb80d0765d90cc2e8246fe16db680fc65b741c709b35457da20fc9966e5

Seniors are taking far too many supplements, Aaron Carroll warns in a new episode of "Healthcare Triage": http://go.politicoemail.com/?qs=b4f8aeb80d0765d9a5139e50adf6f9c407c0a1122b5d24c99d418bbf06afd03a

Hospitals' Medicare margins are down to negative 9 percent this year, according to a MedPAC study that Modern Healthcare's Dave Barkholz flagged: http://go.politicoemail.com/?qs=b4f8aeb80d0765d9a1e4bee3457f93b14da194d106ac2c665f05776aff11f94f

An outbreak of yellow fever has sickened 1,000 people - and it was totally preventable, WIRED's Sarah Zhang writes: http://go.politicoemail.com/?qs=b4f8aeb80d0765d93282132d7d2517624316b6510bc236c6529360b25a2eb687

** A message from PhRMA: Take a moment to consider the impact that strong and robust IP policies have on our daily lives and on the country. Due to the complexity of developing a medicine, strong IP protections are necessary to ensure that innovative biopharmaceutical companies are able to secure resources for future investments in research, giving hope to patients who await tomorrow's medicines. Learn more here about the outcome of strong IP policies. **

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