Corporate Money and Health Care

Items from the recent PNHP newsletter:

1) With revenues from traditional private insurance stagnant, large insurers are increasingly looking for growth in their Medicare and medicaid business. Commercial business now accounts for less than half of the revenues of the nation's five largest for-profit insurers (WellPopint, UnitedHealth Group, Aetna, Humana, and Cigna). Partly as a result of their growing government contracts, insurers' profit margins rose from 6.9% to 8.2% in the 18 months since the federal health law passed. health insurers are looking to pick up $40billion in Medicaid contracts as the law"s Medicaid expansion goes into effect in 2014, and another $10 billion in Medicare revenues (Sarah Frier, Bloomberg, 1/5/12).

2) Drug executives topped the charts of CEO pay in 2010, with McKeeson CEO John Hammergren the highest paid executive that year with $145 million in compensation. McKeeson is the largest pharmaceutical distributor in North America, distributing about a third of the nation's drugs with sales of $112 billion. Joel Gemunder, outgoing boss of Omnicare, a firm that dispenses drugs to nursing homes, received total pay of $98 million. Thomas Ryan, CEO of VCS Caremark, with 7,000 pharmacies across the US, took home $68 million. Outgoing Aetna CEO Ronald Williams made $58 million (Meet the new 1%: Healthcare CEO;s replace bankers as America's best paid, the Guardian, 12/14/11).

3) The health care industry spent $499.9 million on lobbying in 2011, just 10 percent less than it spent at the very peak of the health reform debate in 2009. The pharmaceutical industry spent the most ($237.5 million) ahead of hospitals/nursing home ($99.5 million), health professionals ($80.4 million), and insurers/HMOs ($72.4 million). in 2011 the industry deployed 3,116 lobbyists, about half of whom were former government employees ("revolvers"). The industry also made $6.1 million in early contributions to the 2012 elections, about 60% to GOP candidates (www.opensecrets.org, accessed on 2/23/12).

4) GlaxoSmithKline will pay a record of $3 billion to settle investigations into its sales and marketing practices, surpassing the previous record of $2.3 billion paid by Pfizer in 2009. The firm was under investigation for illegal marketing of Avandia, diabetes drug that was severely restricted last year after it was linked to heart risks. Federal prosecutors said the company had paid doctors and manipulated medical research to promote the drug. The settlement also ends a Justice Department investigation into its Medicaid pricing practices and a nationwide investigation led by the US Attorneys in Colorado and Massachusetts into the sales and marketing of nine other drugs from 1997 to 2004. The firm, with $43 billion in annual revenues, had set aside $5.7 billion to resolved a variety of civil and criminal cases (Wilson, NY Times, 11/3/11).

5) Medtronic, the world's largest maker of medical devices, will pay $23.5 million to settle charges that it defrauded Medicare and Medicaid by paying kickbacks to doctors to implant its pacemakers and defibrillators. Medtronic paid doctors a fee of $1,000 to $2,000 for each patient with a Medtronic implant they enrolled in two device registries and two post-market studies. Medtronic solicited doctors for the studies to get them to use its devices (AP, 12/12/11).

6) Merck will pay $24 million to settle charges that it overcharged Massachusetts' Medicaid program. The suit alleged that a generic drugmaker purchased by Merck, Warrick, reported false and inflated prices for a trio of treatments for asthma and other respiratory diseases. 12 other drugmakers charged in the lawsuit for inflating Medicaid prices paid a total of $23.4 million to the state (Boston Globe, 12/21/11).

My comment:

How much greed, avarice, and patient neglect will require documentation before you act to protect patients and public funds from corporate welfare in the health care industry?

Dr. Joe Jarvis