| | | |   | Good morning and happy Tuesday, D.C. Diagnosis readers! Our editions may be bursting at the seams this week, as D.C. Diagnosis will be taking an August recess of our own for two weeks after that. We’ll be back with fresh reporting after Labor Day. I’ll be visiting my family in Minnesota for a bit, so be sure to email me with news tips, or your best travel tips for Duluth, if you’ve been, at rachel.cohrs@statnews.com. | | | A cheat sheet to Democrats’ drug pricing reform policies Today, President Biden is expected to sign sweeping changes to Medicare’s prescription drug benefit into law. The policies are highly technical, and I’ve compiled a new summary that dives pretty deep into all the policy details you’ll need to keep in mind as the administration charges ahead with implementation.
The summary includes exceptions to the negotiation process (I’m looking at you, small biotech companies), the criteria that Medicare will consider during the negotiation process with drug makers, and which kinds of drugs are regulated under each policy.
When you, like me, are scratching your head a few months from now trying to remember a wonky detail about how this law works, you’ll want to have this story handy, trust me. So bookmark it now (and maybe these rundowns from Kaiser Family Foundation and Washington University in St. Louis law professor Rachel Sachs, too). | Private equity firms that own health care companies dodge a bullet For those who weren’t following every twist and turn of Senate Democrats’ arduous process to pass the Inflation Reduction Act, you may have missed a big win for private equity firms investing in all sectors, including health care.
Long story short, Democrats imposed a minimum corporate tax of 15% on companies making more than $1 billion a year. Originally, that policy included a provision that meant a large number of private equity firms would have been subject to the tax, if the sum of the profits of the companies they owned was at least $1 billion. But after intense lobbying by the industry, that provision was stripped out.
That win was a big deal for the industry, as the policy would have taken a 15% bite into the returns that private equity firms pay investors. Right now, private equity firms themselves aren’t taxed, and the taxes are paid by the individual investors.
Private equity firms have become deeply entangled in the health care system, and despite some negative press on their involvement in various health care specialties (more on that in a minute), they were able to successfully convince Sen. Kyrsten Sinema (D-Ariz.) to give private equity firms a break.
“It gives green light to continued investment by private equity, including in health care, so this is a clear win for private equity firms and their portfolio companies,” said Angela Humphreys, a health care M&A attorney at Bass, Berry & Sims who works with private equity firms. | Patients for Affordable Drugs isn’t going away 
David Mitchell testifies in 2019 (Chip Somodevilla/Getty Images) It would seem to be a poetic ending. After six years of nonstop work, David Mitchell sat in his Bethesda home and watched Congress pass a drug pricing reform package that he had labored so hard to advance.
He’s 72, and still working with doctors to ensure he’s on the right cocktail of medications to treat his multiple myeloma. His wife would like for him to spend more time with his family after decades of fast-paced work as a D.C. political ad executive, and now a full-time patient advocate.
Mitchell may slow down a bit now that Democrats passed drug pricing reform, but he insists he’s not stopping. The group he founded is hiring a new executive director — to be announced soon — to help out with the workload. Patients for Affordable Drugs is going to focus on the drug pricing problems (and there are many) that the Democrats’ package didn’t solve.
Read my full dispatch from an interview with Mitchell about the work he’s done so far, and what’s ahead. | How Neurofilament Can Unlock Advances in Neuroscience and the Treatment of Devastating Neurological Diseases Over the last few decades, neuroscience has taken a quantum leap forward, and research is driving new advances. One of the most promising developments has been the discovery of a biomarker prevalent among many devastating neurodegenerative diseases – neurofilament. Biomarkers, such as neurofilaments evaluated through simple blood tests, hold the potential to revolutionize our ability to diagnose, treat and monitor people with devastating diseases such as ALS, MS and SMA. | Eli Lilly’s Covid-19 treatment is more expensive on the commercial market In an interesting test case for what happens when Covid-19 medicines are sold on the private market, Eli Lilly appears to be charging a higher price for its monoclonal antibody treatment for Covid-19 than the federal government paid when it did all the purchasing.
The transition from the federal government buying all Covid-19 treatments and vaccines to a more traditional process was inevitable. One of the big questions was whether prices would go up once the federal government wasn’t using its bargaining power to negotiate prices.
In June 2022, Lilly charged the government roughly $1,800 per dose for 150,000 doses of the treatment. According to reports, the company is now charging $2,100 on the commercial market. A new HHS webpage indicates that providers can bill Medicare for $2,394 for the cost of the drug.
Eli Lilly said that its new price of $2,100 for the treatment is in line with the cost of other monoclonal antibodies on the market. Regeneron appears to have charged the government around $2,100 for its monoclonal antibody treatment, and GSK’s treatment retailed at $2,100 when it first went on the market.
The move is already drawing some criticism, however. Lauren Aronson, executive director of the Campaign for Sustainable Rx Pricing, called the move “egregious pricing behavior to juice profits.” | Yet another health care sector private equity is shaping What are the consequences for children with autism when private equity firms buy therapy providers? My colleague Tara Bannow has a new, must-read investigation into the space.
Her reporting shows some private equity-owned therapy providers have pressured parents to increase their children’s therapy hours (at times, up to 40 a week), produced cookie cutter treatment programs that weren’t tailored to individual children, and incentivized clinicians to bill more treatment hours.
Read Tara’s two-part tour de force: how children and their families are affected, and a breakdown of the private equity firms that have poured billions into the sector over the past decade. | What we’re reading - Failed Medicaid expansion negotiations reveal N.C. hospitals' might, Axios
- A complicated fall vaccine campaign: Updated Covid boosters, flu shots, and how to time the jabs, STAT
- Community health centers’ big profits raise questions about federal oversight, Kaiser Health News
- What aren’t we facing?’: Immunization leader lays bare challenges to the monkeypox response, STAT
- Democrats hit Rubio, Johnson with ad on insulin cap vote, The Hill
- 340B sales rose to $44 billion last year, STAT
| Thanks for reading! More on Thursday,  | | | |
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