Sunday, November 18, 2018

CBS Sunday Morning does Nathan Myhrvold; 60 Minutes does drug prices (18 Nov 2018)

CBS Sunday Morning on November 18, 2018 did the annual "food" issue and, in so doing, covered
aspects of Nathan Myhrvold, of Intellectual Ventures in the piece
[ ]

Of past IPBiz coverage of Myhrvold, see also The Theory of Invention

Of some notes:

Introduction of stories:
Susan Spencer cover story breakfast
Chrissy Teigen by Rita Braver. John Legend.
Lee Cowan food designer
Seth Doane on black gold balsamic vinegar
John Blackstone on Irish whiskey. San Fran

Trump toured Paradise, CA.
Florida election
Argentine submarine San Juan
90th anni of Steamboat Willie.
All clear for Turkey Trot home

52% worry about how healthy food is
38% worry about taste

Cover story on cereals:
Thrillist. Eat nothing but cereal for one week. 82 bowls. Will Fulton
Paul Friedman of Yale WK Kellogg.
Re-energizing. Chocolate peanut butter cheerios.
Change shape of marshmallows in lucky charms.
Honey nut cheerios No. 1 top selling cereal

David Pogue. Nathan Myhrvold . Modernist Cuisine
Former Microsoft executive Nathan Myhrvold is a man of many talents,
from geophysics and space physics to economics – and now, taking
eye-popping portraits of food. To get his perfect pictures,
which have been featured in art galleries and in a book,
"The Photography of Modernist Cuisine," Myhrvold had to
design robots to better capture food at the perfect moment. David Pogue reports.

Luke Burbank. Tatertot. Napolean Dynamite
1953 Ore-Ida. Pricepoint too low.
Serena Alscul Hot Ones
Puckerbutt Carolina reaper
LaCroix water
Joseph priestley

Tony Dokoupil on straws. Lonely whale.

Oregon University. Food Science Center. Masone Lee Cowan

Moment of nature: wild turkeys in Marin County CA

***Later on 18 Nov 18, from "60 Minutes"

Spencer Williamson: The big misperception is that by raising the price of Evzio we reduce the access to this product. The exact opposite is true.

Lesley Stahl: More people are getting it at that price?

Spencer Williamson: Yeah, the numbers don't lie. So less than 5,000 prescriptions were filled in the first 12 months. In the second 12 months, over 65,000 prescriptions were filled.

How can that be? Well, when Kaleo set the initial price at $575, it was warned that would be too high for middlemen called pharmacy benefit managers, or PBMs that negotiate drug prices for health plans. Kaleo thought that its easy-to-use product would be irresistible in an escalating opioid crisis.

But when it hit the market, Williamson says, the PBMs did try to discourage doctors from prescribing Evzio… piling on cumbersome paperwork.

Spencer Williamson: A physician had to show that a patient had failed with another form of naloxone before they could get this product.

Lesley Stahl: If they failed they'd be dead.

Spencer Williamson: Exactly.

Lesley Stahl: I mean, does that make sense?

Spencer Williamson: No.

Lesley Stahl: No. Were there other hindrances?

Spencer Williamson: Yes, the second hindrance, the other-- the second tool they use is high patient copays. So they make the patient pay a big number outta pocket. Here's a scenario that played out many times. A patient goes into a pharmacy with her opioid prescription, and they go into the pharmacy with their life-saving product prescription.

Lesley Stahl: Co-prescribed.

Spencer Williamson: Co-prescribed. The opioid is prescribed, no problem, a very low co-pay. This gets blocked. The lifesaving product gets blocked.

That's because there were less expensive alternatives: the syringe and then the nasal spray. So, why didn't Kaleo just lower the price? Well, remember Todd Smith, the consultant? He advised them not to lower the price,

But to raise it, a lot. And try to work around the roadblocks put up by pharmacy benefit managers.

Under Smith's scheme, doctors, unhappy with excessive paperwork, are told to send prescriptions to specific pharmacies contracted to handle the forms for them. And these pharmacies mail the devices directly to the patient, making a trip to the drugstore unnecessary.

Kaleo, meanwhile, tries to get as much money out of the insurance companies as it can. But the heart of Smith's model is that while insurance companies are charged a lot, patients with commercial insurance are charged nothing. If your plan agrees to cover it, Kaleo pays your co-pay. And if your plan refuses, Kaleo will give you Evzio, 100% free.

Lesley Stahl: Are you saying that if your insurance company won't pay or they jack up the copay, that you'll pay? So patients don't pay anything?

Spencer Williamson: We will step in and make sure a patient pays nothing out-of-pocket. That's correct.

How can they afford that? The calculation is that even if only a handful of insurance companies agree to pay the high price, Kaleo would still rake in a lot of money, since it costs only about $80 to manufacture a pack of two.

Lesley Stahl: This whole idea was described to us as, and I'm quoting, "a legal shell game to bilk insurance companies."

Former Kaleo Employee 1: That's correct. Yes.

Lesley Stahl: And eventually, then, to bilk the rest of us. Don't we end up--

Former Kaleo Employee 2: Ultimately--

Former Kaleo Employee 1: It raises--the overall health care cost for everybody. You and I, paying our premiums, are the ones paying for it.

Former Kaleo Employee 2: If you think the insurance company's going to be (laughs) stuck with this bill in the long run? No!

You and I are stuck with the bill in another way: as taxpayers. Turns out the bulk of Kaleo's revenue for Evzio comes not from commercial insurance companies, but from Medicare.

This report by the Senate Permanent Subcommittee on Investigations led by Senators Rob Portman and Tom Carper, details how Kaleo made sure that doctors signed forms for Medicare patients, "…indicating that Evzio was medically necessary…" With that language Medicare has essentially no choice but to cover the device at near full price.

That resulted in, "more than $142 million in charges to taxpayers in just the last four years." The report says Kaleo, "…not only exploits a country in the middle of an opiod crisis, but also American taxpayers…" Accusations Kaleo denies.

Lesley Stahl: And you make a profit. You make a profit?

Spencer Williamson: So, we've actually lost money in our first four years of bringing this product to the market. The good news is we're saving lives. More people have access to this product.

Lesley Stahl: Why are you doing it if you're not making a profit?

Spencer Williamson: We're moving in a direction with a model that continues to evolve.

It seems to be "evolving" in the direction of scrapping the high-price plan altogether. Whether it's because the model failed to produce a profit or because they're under Senate investigation for, as the report lays out: exploiting Medicare. Williamson took the opportunity of our interview to make this offer.

Spencer Williamson: We want to reach out to all middlemen, all insurance companies to say, "We will lower this price to less than the original $575 if you will make sure that when a physician decides a patient is at risk, they can get it and they can afford it."

Lesley Stahl: But all the insurance companies have to agree for you to get there.

Spencer Williamson: We will work with one insurance company at a time.

Lesley Stahl: Have you done it yet?

Spencer Williamson: We have started those conversations. But I'm announcing it on 60 Minutes that our hands are out to offer this price for less than $575 as long as patients won't be blocked when they need it.

from Evzio: The overdose-reversal drug with a $4000+ price tag


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