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Column: Everyone is thrilled that Medicare can finally negotiate drug prices. Prepare to be disappointed

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Column: Everyone is thrilled that Medicare can finally negotiate drug prices. Prepare to be disappointed

Among the many healthcare provisions of the Inflation Discount Act simply signed by President Biden, one shiny object stands out.

It’s the availability permitting Medicare to barter pharmaceutical costs immediately with drug corporations for the primary time.

Journalists and a few shopper advocates are over the moon about this provision, which has been on Democratic policymakers’ want checklist for many years. The healthcare information website Stat known as it a “crowning healthcare achievement” for Biden.

There are tons of ways in which we already know the drug corporations are gaming the system to maximise revenue. It’s exhausting to imagine that they received’t creatively discover a means round this provision to make it not that efficient.

— Simon F. Haeder, Texas A&M

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The concept has at all times garnered overwhelming help among the many public, which has interpreted the ban on Medicare’s negotiating authority as a crystal-clear indication of Large Pharma’s corrupt affect over Congress; drug producers spend about $160 million a 12 months to foyer lawmakers and have made about $150 million in marketing campaign contributions to congressional candidates and officeholders since 1990, in line with the Open Secrets and techniques database.

A Kaiser Household Basis ballot final 12 months discovered 83% of Individuals in favor of eradicating the ban, together with 95% of Democrats, 82% of independents and 71% of Republicans.

Unhappy to say, they’re all more likely to be disenchanted on the outcomes.

The availability permitting Medicare to immediately negotiate drug costs seems to be highly effective on the floor.

Medicare is the biggest single purchaser of pharmaceuticals within the nation, and prescriptions are this system’s fastest-growing expense.

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Medicare accounts for about 20% of all medical spending within the U.S., and about one-third of all spending on prescriptions. So if this system may drive drug corporations to the desk to barter costs, that might yield large financial savings … theoretically.

However the negotiation provision as enacted received’t have that impact, at the least within the close to time period. It’s pockmarked with loopholes that save the pharmaceutical business from its most extreme potential results.

Amongst different flaws, which we’ll get to in a second, negotiated worth adjustments received’t begin to take impact till 2026, after which just for 10 medicine, chosen from amongst 100 accounting for the very best spending by Medicare, and solely after they’ve been in the marketplace for a few years.

(The variety of medicine topic to negotiation rises to fifteen in 2027, 30 in 2028, and 40 in 2029 and later.)

Taken as a complete, the drug worth provisions within the act are “a really massive deal and a generational victory and critically vital,” says Peter Maybarduk, Entry to Medicines director on the advocacy group Public Citizen. “It’s an enormous setback for Pharma.”

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Nonetheless, “this doesn’t get us all the way in which to honest or environment friendly drug pricing,” Maybarduk instructed me. “It nonetheless lets monopolists promote on the worth they like for a lot of years right into a drug’s life.”

The Congressional Finances Workplace estimates that the negotiation provision will save Medicare about $102 billion over 10 years, concentrated within the post-2025 interval. Unfold over the last decade, that sum is the equal of about 1.3% of Medicare’s annual spending.

Why hasn’t Congress acted to rein in drug costs? The drug business spends a median of about $160 million a 12 months to foyer lawmakers.

(Open Secrets and techniques)

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Others level out that the drug business is spectacularly adept at exploiting regulatory loopholes.

“There are tons of ways in which we already know the drug corporations are gaming the system to maximise revenue,” says Simon F. Haeder, a healthcare skilled on the Texas A&M College of Public Well being. “It’s exhausting to imagine that they received’t creatively discover a means round this provision to make it not that efficient.”

It’s true that in its broadest sense, the Inflation Discount Act is the primary measure in a long time to put any vital limits on the drug business’s skill to cost Individuals the very best costs within the developed world.

Regardless of constant public outrage, the business hasn’t displayed any inclination to be extra circumspect in its U.S. pricing.

A latest research by Benjamin Rome of Brigham & Ladies’s Hospital of Boston and colleagues discovered that common launch costs of latest medicine elevated by greater than 20% a 12 months from 2008 by way of 2021. Some 9% of medicine reached the market with launch costs of $150,000 or extra from 2008 by way of 2013, however 47% in 2020 and 2021.

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Simply this week, the biotech agency Bluebird Bio received Meals and Drug Administration approval for a drug to deal with a uncommon blood illness requiring frequent lifetime transfusions, priced at a report $2.8 million, wholesale.

Let’s look at how the negotiation provision is designed to work.

Though the ten medicine to be initially chosen by the secretary of Well being and Human Providers for negotiation should be drawn from the 50 accounting for the very best spending by the Half D prescription profit and the 50 costing essentially the most for Half B (principally physician providers and outpatient care), there are limitations on the secretary’s decisions.

Excluded are medicine for which generic or biosimilar alternate options exist, these which have been authorized for advertising and marketing for less than 9 years (for typical medicine) or 13 years (for biotech merchandise), and “orphan” medicine — these which can be the one medicine authorized by the FDA to deal with sure uncommon situations.

The delay earlier than negotiations can happen will carry most medicine near the tip of their patent-protected life span, after which generics producers can market the identical formulations.

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Patents run for 20 years from the date of utility, not the date of FDA approval. The FDA can prolong the exclusivity interval for producers by months or years for medicine in sure classes. Because of this a drug might be protected against competitors for as little as two to 3 years, relying on how lengthy it takes to win FDA approval.

Little within the negotiation provision truly offers Medicare all of the leverage this system would want to interact in actually exhausting bargaining.

The negotiators are “supposed to barter them based mostly on the advantages that the drug gives [and] the chance that the drug had already offered a return on funding to the producer,” Aaron Kesselheim, a drug coverage skilled at Harvard Medical College, stated on a latest podcast.

But as negotiators in all walks of life know, one of the best leverage one can have is the flexibility to stroll away from the desk.

That’s what permits the Division of Veterans Affairs, essentially the most profitable drug worth negotiator amongst federal companies, to do in addition to it does: It’s permitted to drop medicine from its nationwide formulary if it deems them too costly or not sufficiently efficient.

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Medicare doesn’t have that latitude. By regulation, it’s required to cowl any drug authorized by the FDA.

It’s not extensively understood that Medicare already has the appropriate to barter drug costs, however solely not directly. Half D guidelines vest the person well being plans that supply Medicare prescription protection with the flexibility to barter costs with drugmakers. Medicare as a program is forbidden to “intervene” with the plans’ negotiations — that’s what has saved this system from the desk.

The well being plans have the flexibility to stroll away, however solely inside limits. They’re required to supply at the least two medicine in every of a number of drug lessons, and “all or considerably all” medicine in six protected lessons: immunosuppressant, anti-cancer, anti-retroviral, antidepressant, antipsychotic and anticonvulsant medicine. In any case, as comparatively small particular person negotiators, they’ve solely restricted energy to extract bargains from the drugmakers.

The newly enacted act does have a few provisions that give Medicare a little bit of leverage in pricing talks: A steep excise tax of as much as 95% of the annual gross sales of a given drug imposed on drugmakers that refuse to barter. That can preserve them on the desk, however received’t essentially drive them to come back to phrases.

The regulation additionally units an higher restrict on the negotiated worth, based mostly on a share of the common promoting worth in varied markets, nevertheless it’s unclear whether or not that may essentially be decrease than what a drugmaker can be inclined to cost in any case.

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The measure additionally requires drugmakers to pay a rebate to Medicare for worth will increase on many medicine greater than inflation.

Haeder observes that a number of provisions of the Inflation Discount Act could produce extra rapid and noticeable financial savings for seniors on Medicare than the negotiation provision. The act limits the annual out-of-pocket spending on Half D prescription drugs to $2,000 a 12 months, a definite achieve for the estimated 1.4 million enrollees who’ve been spending greater than that.

It additionally limits annual premium will increase for Half D to six% a 12 months from 2023 by way of 2030, eliminates copays for grownup vaccines, and caps spending for insulin by Medicare enrollees to $35 a month.

The insulin provision underscores the advantages and disadvantages of the act’s healthcare provisions. The excessive worth of insulin demanded by its producers has been a permanent scandal for years, leading to sufferers rationing their very own provides, risking their well being, to make ends meet.

The Medicare cap will assist an estimated 3.3 million enrollees, however provisions to increase the cap to prospects of personal insurance coverage and the uninsured have been stripped out of the invoice for procedural causes.

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“No drugs so typifies the therapy rationing and exorbitant pricing disaster that the US faces as insulin,” Maybarduk instructed me.

What’s most encouraging in regards to the Inflation Discount Act’s healthcare provisions is that as a political victory it establishes a basis for additional progress within the battle in opposition to drug business profiteering.

Laws isn’t obligatory; the White Home may drive costs down or cut back the tempo of will increase by way of govt motion, by authorizing generics manufacturing to compete with sure high-priced model identify medicine, utilizing the federal government’s so-called march-in rights over medicine which have been developed with federal funding — which is most of them.

“Over time, the invoice might be expanded,” Maybarduk says. “It may be tightened in opposition to gaming. You may increase the checklist of [negotiated] medicine. It’s a framework that we will preserve enhancing. As a result of it’s breaking the logjam and permitting the federal government to get within the sport of negotiating costs for the world’s largest drug purchaser, that’s a really vital win.”

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New Mexico weighs whether to toss Alec Baldwin criminal charges in 'Rust' shooting

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New Mexico weighs whether to toss Alec Baldwin criminal charges in 'Rust' shooting

A New Mexico judge is weighing whether to dismiss involuntary manslaughter charges against Alec Baldwin for his alleged role in the 2021 shooting death of the “Rust” movie cinematographer.

Baldwin’s attorneys argued during a court hearing Friday that special prosecutor Kari T. Morrissey had abused her power by allegedly withholding “significant evidence,” including witnesses favorable to Baldwin, during a January grand jury proceeding.

The 66-year-old actor‘s lawyers said he was a victim of an “overzealous prosecutor” who steered grand jury proceedings in an effort to win an indictment in the high-profile case. At issue is whether the grand jury had been fully advised that they could hear from Baldwin’s witnesses during the proceedings. The grand jurors spent a day and a half questioning witnesses who were introduced by the prosecutors.

“The fix was in,” Baldwin attorney Alex Spiro told the judge Friday.

The grand jury indicted Baldwin on an involuntary manslaughter charge in the shooting death of Halyna Hutchins, the 42-year-old cinematographer, who was rehearsing a scene with Baldwin on Oct. 21, 2021. Baldwin has pleaded not guilty.

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At the conclusion of Friday’s hearing, New Mexico First Judicial District Judge Mary Marlowe Sommer said she would issue her ruling next week. Should she dismiss the case, it would mark the second time that the felony charges against Baldwin were dropped.

Marlowe Sommer’s decision is expected less than two months before Baldwin is scheduled to go on trial in a Santa Fe courtroom.

During the hearing, which was conducted virtually, Morrissey denied that she had acted in bad faith. She said she didn’t prevent jurors from getting answers to their questions or from seeking additional information. She told the judge that grand jurors had been given written instructions that outlined their ability to quiz other witnesses, including those favorable to the defense.

But because the jurors didn’t ask to hear from the witnesses who were on a list supplied by Baldwin’s lawyers, several key figures in the tragedy, including film director Joel Souza, property master Sarah Zachry and assistant director David Halls, were not called to testify. Instead, jurors heard from police officers, a crew member who was in the church and expert witnesses hired by prosecutors.

On the day of the shooting, Hutchins, Baldwin, Souza and about a dozen other crew members were gathered in an old wooden church at Bonanza Creek Ranch, south of Santa Fe, preparing for a scene. Hutchins, according to the actor, told him to pull his Colt .45 revolver from his holster and point it at the camera for an extreme close-up view. That’s when the gun went off.

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Hutchins died from her wounds. Souza was injured and recovered.

Last month, Marlowe Sommer sentenced the film’s armorer, Hannah Gutierrez, to 18 months in a New Mexico women’s prison for her role in the shooting. Morrissey argued that Gutierrez was criminally negligent by allegedly bringing the live ammunition to the movie production and unwittingly loading one of the lead bullets into Baldwin’s gun. Gutierrez denies bringing the ammunition on set.

Baldwin’s prosecution has long been fraught.

Morrissey and her law partner Jason J. Lewis joined the case last year after the first team of prosecutors was forced to step down due to missteps, including trying to charge Baldwin on a penalty enhancement that wasn’t in effect at the time of the tragedy.

“The government looked a little sophomoric and unprofessional when they charged him for a crime that wasn’t a crime at the time,” said Los Angeles litigator Tre Lovell, who is not involved in the “Rust” shooting matter. “That was embarrassing.”

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The original prosecutors also displayed bluster in media interviews, making statements about the need to hold Baldwin responsible for his actions. Defense attorneys have argued that such commentary was out of line and prejudicial against the actor.

Shortly after Morrissey and Lewis joined the case, they dropped the charges against Baldwin. At the time, they said they needed more time to review evidence and address issues raised by Baldwin’s team. Morrissey and Lewis reserved the right to refile the charges.

Immediately after the charges were dropped, Baldwin traveled to Montana to finish the filming of “Rust.”

On Friday, Morrissey said last year’s decision to drop the charges was made at the request of Baldwin’s lead attorney, Luke Nikas, who had presented evidence that the gun Baldwin was using had been modified. Subsequent tests showed the gun was functional that day, but during FBI testing in 2022, the gun was broken by forensic analysts who wanted to see how much pressure needed to be applied for the hammer to drop.

The damaged gun is one of several complications that prosecutors are facing. Legal experts have said that winning a conviction in Baldwin’s case is expected to be more difficult than in the trial of Gutierrez, whose job was to make sure the weapons were safe.

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Baldwin was handed the prop gun that day and was told that it was “cold,” meaning there was no ammunition inside. In reality, the chamber of the revolver contained six rounds — five so-called dummies and the lead bullet that killed Hutchins.

“The state has not even alleged that Baldwin had a subjective awareness of a substantial risk that the firearm held live ammunition,” Nikas argued in the motion to dismiss the charges. “Without a subjective awareness, he could not have committed the crime of involuntary manslaughter, which requires that the defendant consciously disregarded a substantial and unjustifiable risk that his actions could cause another person’s death.”

Baldwin has argued, with support from Hollywood’s performers’ union SAG-AFTRA, that it wasn’t his job to be the gun safety officer on set.

The actor has said he was relying on other professionals to do their jobs to ensure a safe production.

Prosecutors have an obligation to present evidence in a “fair and impartial manner,” Baldwin’s attorneys said.

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The judge grilled Morrissey on her thinking at the time, including an instance when she had interrupted a sheriff’s deputy and prevented her from answering a question about gun safety measures on set. Morrissey said that deputy was not an expert in film set protocols and that she instead wanted jurors to get “the most accurate information,” which would come from a veteran film crew member who was an expert witness.

Baldwin’s attorneys were also sharply critical of Morrissey for divulging during a media interview the date the grand jury was expected to meet. Morrissey said she took responsibility for providing to a reporter the initial date, which had been scheduled for mid-November. However, the matter was postponed, and the case wasn’t brought before the grand jury until two months later, in mid-January.

Lovell, the L.A. entertainment attorney, said he believes the case will go to trial and that efforts to throw out the indictment will be unsuccessful.

“Courts are really reluctant to dismiss cases brought by a grand jury,” Lovell said. “Courts have limited ability to review what goes to a grand jury unless it was provided in bad faith.”

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Troubled EV maker Fisker closing Manhattan Beach headquarters

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Troubled EV maker Fisker closing Manhattan Beach headquarters

In an effort to stave off bankruptcy, electric-vehicle maker Fisker Inc. is closing its Manhattan Beach headquarters and has secured a $3.5-million lifeline as it continues to explore an acquisition or other strategic alternative.

The troubled company, which had about 300 employees in the 72,000-square-foot offices at the end of March, is moving its remaining workers to an engineering and distribution facility in La Palma in Orange County, said a person familiar with Fisker’s operations who was not authorized to comment.

In all, the company had roughly 1,135 employees as of mid-April, following an announced 15% cut to its workforce.

Fisker has been attempting to avoid bankruptcy since March, when it announced that talks over a strategic alliance with a major automaker had ended, squelching a deal that would have given it $150 million in new financing.

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That caused its shares to collapse to pennies, prompting the New York Stock Exchange to delist the stock, which violated another debt agreement the company struck with an investor last year, according to a regulatory filing.

A major automaker, said to be Nissan, was reportedly in talks to invest in Fisker. Nissan was considering making the Fisker Alaska truck at a U.S. plant — a deal that would come with a $400-million investment, Reuters first reported. Fisker did not confirm the reports.

Fisker announced this week that it secured a $3.5 million short-term loan, as it continues to operate and sell its midsize Ocean SUV. The note is due June 24 and has the potential to increase to $7.5 million.

The Ocean, a competitor to Tesla’s Model Y, was released last year to mixed reviews; some praised its build and styling, but the car has been plagued by software glitches.

The National Highway Traffic Safety Administration has four investigations into the vehicle, including one opened this month after complaints that the SUV’s automatic emergency braking system randomly triggered.

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Other probes are looking into reports that a door on the Ocean will not open and complaints about a loss of braking performance. The company has said it is working with the regulator.

Fisker said this week that it had added three dealers to its networks in California and New Jersey, which it began building after a plan to sell direct to consumers — like Tesla does — didn’t pan out. It also announced additional price cuts on some Ocean models.

In March, Fisker slashed the price on its entire lineup of 2023 Oceans by more than 30%. The company also said that it had paused production at its contract manufacturing plant in Austria, which produced about 10,200 Oceans last year.

Fisker was founded in 2016 by noted car designer Henrik Fisker, who has said the Ocean was inspired by California. The SUV features a full-length solar roof, an interior composed of “vegan” recycled plastic and a drop-down rear window that can fit a surf board.

Fisker is not the only startup that has been struggling amid a slowdown in the domestic market for electric vehicles and a rise in interest rates.

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Rivian Automotive, an Irvine maker of electric trucks, has informed state officials it will lay off more than 120 employees beginning in June. In February, the company announced it was cutting 10% of its workforce. The company’s shares have lost more than half of their value since last year.

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Las Vegas' Mirage Resort to close after 34-year run. Volcano to go dormant

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Las Vegas' Mirage Resort to close after 34-year run. Volcano to go dormant

Once hailed as “Las Vegas’ first 21 Century resort,” The Mirage Hotel & Casino confirmed Wednesday that its iconic volcano outside of its front entrance is going dormant less than a quarter of a century into the new millennium.

Owner Hard Rock International announced the hotel will cease operations on July 17, with bookings being accepted until July 14. The iconic resort — sporting a jungle-fantasy theme —was perhaps best known for its exploding 54-foot man-made volcano, magicians Siegfried and Roy, and its white tigers and dolphins.

“We’d like to thank the Las Vegas community and team members for warmly welcoming Hard Rock after enjoying 34 years at The Mirage,” said Jim Allen, Chairman of Hard Rock International in a statement.

The resort is expected to be redeveloped into the Hard Rock Hotel & Casino and Guitar Hotel Las Vegas, with the volcano giving way to a nearly 700-foot guitar-shaped hotel. The project is expected to open in spring 2027. A similar 638-room hotel stands in Hollywood, Fla.

The Associated Press reported that more than 3,000 employees will be laid off. Hard Rock acknowledged it would pay roughly $80 million in severance packages for union and nonunion labor.

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The Culinary and Bartenders Union accounts for about 1,700 Mirage workers. It announced Wednesday that its workers have two options.

The first was a severance package of $2,000 for every year of service plus six months of pension and health benefits. The second option gives employees a lesser, undisclosed amount while maintaining seniority rights for the duration of the property’s closure along with 36 months of recall rights for jobs at the new hotel.

“Culinary Union members at The Mirage have a strong union contract, ensuring that workers are protected, even as the property closes its doors entirely for three years from July 2024 – May 2027,” said Ted Pappageorge, Culinary Union secretary-treasurer, in a statement Wednesday.

The new hotel is projected to employ nearly 7,000 employees, according to Hard Rock management, while 2,500 construction jobs are expected during the rebuilding process.

Hard Rock said that all reservations beyond July 14 would be canceled and that guests should contact the guest services department or booking agency for a refund.

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The Mirage’s closure is the second on the strip this year.

In April, the 66-year-old Tropicana closed its doors to make way for a 30,000-seat stadium that is expected to serve as the home of the Oakland A’s.

The Mirage’s opening by casino tycoon Stephen A. Wynn in 1989 was hailed as the ushering of a new era of resorts. It was the first strip hotel to open since the MGM Grand in 1973.

Wynn shelled out $600 million, then the most expensive casino project, for the sprawling 103-acre property.

The Mirage was the first fully integrated hotel, according to Alan Feldman, a Distinguished Fellow at UNLV’s International Gaming Institute.

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Integration meant operating and treating all facets of the resort, including casino, food and beverage, retail, entertainment and convention space, with equal importance, according to Feldman, who rose to become an executive with the Mirage and stayed from 1989 to 2019.

Feldman said hotel owners previously cared first about the casino and “everything else was last.”

“They gave away entertainment, food and rooms as long as someone came and played,” said Feldman. “The Mirage was the first to believe you could actually make money in these areas if you invested enough.”

Its glistening 30-story white-and-gold towers were said to make neighboring Caesars Palace look “retiring by comparison.” Traffic occasionally backed up on the strip as engineers tested gas-flared flames 40 feet into the air every few minutes.

“People just got out of the cars and went over to see what was going on,” one limousine driver said at the time.

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The hotel included a 20,000-gallon fish tank at its reception desk and 3,049 rooms.

Its animals — and its white tiger habitat — brought the resort fame and infamy, including in 2003 when a tiger critically injured magician Roy Horn.

The Mirage’s opening kicked off a resort building and remodeling spree that included the debut of the Circus Circus’ Excalibur in June 1990, the $250-million renovation of Caesars Palace and the opening of Treasure Island in 1994.

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