GDP Blog

THE U.S. ISN'T PREPARED TO FIGHT THE NEXT CORONAVIRUS

Posted by Seth Denson

Mar 23, 2020 8:02:45 AM

While the global health concern surrounding coronavirus is laser-focused on finding a vaccine, the average U.S. citizen and consumer of “tips on how to combat the spread of coronavirus” is unaware of the severe incapacity of the U.S. to manufacture, in bulk, the amount of vaccines necessary in this (or any future) health crisis.

Rx Blog Image COVID

In order to make a vaccine, active pharmaceutical ingredients (“API”) are necessary. Currently, 90% of all active pharmaceutical ingredients utilized by U.S. drug manufacturers are made in China with one notable exception, Pfizer, who has three U.S. based API manufacturing facilities. Because of this, Pfizer, according to a spokesman, is able to manufacture their products with less than 2% of their API’s coming from China[1]. But it’s not just vaccines; additionally, it’s estimated that 97% of all antibiotics come from China as well[2].

Meanwhile, with U.S. pharmaceutical companies quietly outsourcing the health and safety of our citizens with nary a whimper from the average American consumer, we are now faced with a dual problem.

First, capacity. Even if the United States were to develop an effective vaccine to the coronavirus, we are fully reliant upon China to give us the API necessary to mass-produced it. There is nothing in the current coronavirus legislation which addresses the need for rapid, mass drug production.

Second, security. Even if the United States were to negotiate – to have the major drug companies like Roche or Johnson & Johnson bring back the drug supply chain – what incentive is there for drug manufacturers to do so? With pharmaceutical spending projected to reach $500 billion in U.S. by 2020, drug companies have, and will continue to generate massive profits by outsourcing API manufacturing to China. This is why President Trump’s re-calibration of the relationship between the U.S. and China was so necessary.

Furthermore, manufacturing is not just about creating jobs, even though for a politician this is often the most important. Manufacturing is also about having in place the processes necessary for national security when it is tested. We needn’t look further than World War II to find a perfect example of this.

During the Second World War, America (not China) was the world’s largest industrial manufacturer. As a result, American industry provided almost two-thirds of ALL the Allied military equipment produced during the war. Then, in the four years of American engagement in World War II, American industrial production DOUBLED in size[3] . The U.S. defeated Nazi-ism because the U.S. didn’t have to rely upon another country to help them build the tools needed to eliminate Hitler.

This is most definitely not the case today as we face a pandemic.

Today, China is number one in the world in terms of manufacturing output with $2.01 trillion generated by that sector in 2018. Meanwhile, the United States is in second place, lagging $200 billion behind with only $1.867 trillion. Twenty-five percent of this valuation is due to U.S. pharmaceutical industry.

As we continue to focus on combating coronavirus no

w, we should also prepare to fight coronavirus and/or the next health pandemic in the days to come by ensuring we bring API manufacturing back onshore in the U.S. Washington, D.C. knows another global pandemic will arise. The question is how do we ensure the U.S. the best prepared when it does?

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Topics: pharmaceutical, COVID19, COVID-19, China, coronavirus

The Future of the ACA & The 5th Circuit

Posted by Andrew Clark

Apr 11, 2019 4:11:09 PM

The next chapter of the ACA is being written, with American’s possibly impacted eagerly standing by. In a filing yesterday with the Fifth Circuit Court of Appeals, the Department of Justice requested that the case be scheduled for oral argument the week of July 8th – but what does that mean for our current healthcare system? For those not following along, this appeal is the result of a recent ruling by Judge Reed O’Connor (out of Texas) that found the ACA unconstitutional (for more information see this recent blog posting from GDP Advisors regarding the original ruling).  

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Topics: ACA, Obamacare, healthcare, SCOTUS, Trump, 5th Circuit, doj

TRACTION or TALK: The Impact of the Administrations Approach to Prescription Drugs

Posted by Seth Denson

Feb 13, 2019 7:24:12 AM

When it comes to health care, targeting the cost of Prescription Drugs has become to the Trump Administration what the ACA was to the Obama Administration – its primary focus. Since his inauguration, President Trump has continuously challenged the pharmaceutical industry, even appointing Alex Azar, a former Big Pharma Exec, to head the Department of Health and Human Services. During his recent State of the Union address, the President continued his rallying cry stating, “It is unacceptable that Americans pay vastly more than people in other countries foPrescription Drugsr the exact same drugs, often made in the exact same place. This is wrong, this is unfair, and together we will stop it. We will stop it fast,” he said. However, when it comes to prescription drugs, the Administration may be reaching the limit on what it can do on its own and ultimately will need Congress to pass new legislation to move the needle much further. Recognizing this, the President went on to say in the SOTU address when referring to prescription drugs, “I am asking the Congress to pass legislation that finally takes on the problem of global freeloading and delivers fairness and price transparency for American patients.” But Congress may be faced with a challenge when addressing this issue, as the most common approaches aren’t without their possible political ramifications. For example:

  • Allowing Americans to import cheaper drugs from Canada may be a challenge as it could be seen as undercutting U.S. jobs;
  • Tying prices in the United States to what companies charge in foreign countries could be seen as price fixing; and
  • Allowing the U.S. Government to negotiate costs in Medicare Part D may prove difficult because of the ultimate power of Pharma lobbying.
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Topics: prescription drugs, Trump, congress, pbm, costs, hhs, big pharma, pharmaceutical, legislation

THE ECONOMIC PRINCIPAL IN HEALTHCARE

Posted by Seth Denson

Feb 4, 2019 7:17:15 AM

Economic Principal HealthcareSo often while talking with employers, we find that when it comes to providing health insurance to their employees, they think of this process as a transactional one rather than one of continued engagement. We will regularly refer to this as the ‘Transactional’ approach vs. the ‘Asset Management’ approach (more about this later). Don’t get me wrong, insurance has been long thought of in a transactional manner. Most insurance advertising is just that – transitionally based (i.e. 15 minutes can save you 15% etc.). When it comes to health insurance; however, employers have seen a very different result over the past decade than they have when comparing other types of insurance. While the traditional Property and Casualty markets have had what we refer to as soft market times and hard market times (soft being where the carriers are much more aggressive in their pricing vs. hard markets where they are not), rarely do we see soft markets when it comes to health insurance. This is largely due to the fact that health insurance really is no longer insurance at all rather it has become healthcare financing with some risk pooling involved.

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Topics: healthcare, Health Insurance, underwriting, economics, differentiation, pbm, costs, premiums

Looking Forward with Innovation

Posted by Logan Barry

Jan 25, 2019 4:11:32 PM

What comes to mind when you hear the words innovation and technology? For me it’s flying cars, floating skyscrapers, and spaceships; how cool would that be to look down over Mars as you fly by in your Spacebender 3000? We have now reached the year 2019 and still don’t have the flying cars we remember from the Jetson cartoons, but never fear, I’m sure Elon Musk is working on this (unless Richard Branson gets to it first). Although we are not yet star trekking through the atmosphere in our private spaceships, we are making tremendous advancements in the healthcare industry. New ideas, new technologies, some great, some just for fun, but all leading to better programs for employers and their employees. Why is such advancement important to us? It is important because the costs of healthcare are projected to reach $8.7 trillion dollars by the year 2020…Yes, I said $8.7 trillion. Not to mention, the current healthcare inflation rate is right around 6.5% annually which is more than 3 times that of the U.S inflation rate of 2% – don’t you think this is a problem worth solving? I would imagine so, and if you think the increases outlined above are not going to be directly reflected in our insurance premiums, then you’re just as naive as I was when I thought I would be driving a flying car at the age of 16.

Lucky for us it is the year 2019 and innovators are using new technology solutions to help soften the risk of high healthcare prices and premium rate increases in the most creative ways. Recently there was no better place to be as an innovator than at the Consumer Technology Association’s (CTA), CES 2019 annual showcase. This event is one of the largest technology conferences in the world and has been taking over the Las Vegas strip for years; it serves as a proving ground for innovators in the business of consumer technologies. This year the WSJ reported that there were 511 companies that represented the digital health sector, up from 472 last year. Featured products included wearables that track blood pressure and heart rhythms, as well as home sperm fertility tests, making home health technology a significant topic of conversation. What better way to cut healthcare costs then to have consumers do blood tests and health monitoring in the comfort of their own home, eliminating the need for an outrageously expensive office visit where we have no idea what we are being charged for.

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Topics: healthcare, CES, Wearables, technology, wellness, CTA, innovation

MEDICARE FOR ALL: Good POLICY or Good Politics?

Posted by Seth Denson

Jan 18, 2019 7:02:21 AM

During the most recent mid-term elections, Healthcare continued to rank atop the list of those things most important to Americans. According to Gallup, 80% of Registered Voters listed healthcare as either extremely or very important, followed closely by the Economy and Immigration both at 78 percent. Medcare for allWith Republicans failing to do anything comprehensive regarding health care during their recent control of both houses of Congress as well as the Executive branch, the U.S. finds itself once again in a discussion around the government’s role in solving America’s health care crisis. Among the solutions most touted by Democrats is the idea of a ‘Medicare for All’ platform.

According to Vermont Senator Bernie Sander’s, the most outspoken legislator leading the charge for Medicare for All, “Health care must be recognized as a right not a privilege for every man, woman and child in our country regardless of their income. The only long-term solution to America’s health care crisis is a single payer national health care program.”

No question that in America, something should be done to insure that every citizen has access to quality affordable health care, how we accomplish this may be a bit more complex than the broad brush of ‘single payer.’ While the idea of nationalized medicine might sound good to many Americans and makes for a good talking point on the cable news talk shows, when it comes to government run healthcare, the devil may most certainly be found in the details. Our team at GDP Advisors reviewed ‘Medicare for All’ (specifically the plan outlined by Senator Sanders), and have compiled our thoughts and opinions on the measure.

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Topics: healthcare, healthcare reform, health care, medicare for all, congress

2019 Drug Prices = A Bitter Pill to Swallow

Posted by Seth Denson

Jan 3, 2019 5:20:32 PM

It was reported this past week that more than two-dozen drug manufacturers are planning to raise the list price of many of their products in early 2019. On the surface this seems to be a delayed ‘slap in the face’ at President Trump who has made lowering the cost of drugs a primary objective. Many of these same manufacturers had announced back in mid-2018 that they had intended to raise prices; however, following public shaming from the White House later relented, stating that they would delay those rate hikes until 2019, and now it appears that those chickens have come home to roost.

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Topics: Cure for Healthcare, prescription drugs, Trump

Déjà Vu All Over Again: The Recent Ruling On the Constitutionality of the ACA & What Comes Next

Posted by Seth Denson

Dec 18, 2018 1:20:13 PM

The past Friday, on the eve of the last day of the 2019 Open Enrollment season for the ACA’s Federal Marketplace, Americans have found themselves, yet again, at another legal crossroads concerning health care in the United States. According to a ruling issued by U.S. District Judge Reed O’Connor, due to the elimination of the penalty surrounding the Individual Mandate as a result of the Tax Cuts and Jobs Act of 2017, the Affordable Care Act is unconstitutional. While the fall out of this decision has yet to be determined and for the time being, both Health and Human Services along with the White House have stated no immediate changes will occur as a result of this ruling, appeals have already begun and as such, the ACA will once again end up in the Supreme Court.

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Topics: ACA, Obamacare, SCOTUS, Supreme Court

THE TRUMP EFFECT: A Closer Look at Why ACA Enrollment is Down & What Consumers Need to Know

Posted by Seth Denson

Dec 14, 2018 10:31:47 AM

As we near the end of this, the 6th Open Enrollment period since the ACA was implemented; all indicators are that the overall enrollment numbers are down. While it is easy to point to the most common reasons we might hear is the cause, a deeper dive into all factors surrounding enrollment is essential to understanding all of the various drivers of the dismal enrollment numbers.

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Topics: ACA, Obamacare, Health Insurance, healthcare reform

Your Facebook & Twitter Post Could Impact Your Health Insurance Cost

Posted by Seth Denson

Jul 26, 2018 8:32:34 AM

The things that we do impact our lives. The foods we eat, how much sleep we get, exercise (or lack thereof), even what we watch on TV can have an impact on our health (both physical and mental). This isn’t news to us as most rational people recognize the correlation between our actions and our health, but what if our health insurance companies new all these details about us? Would we change our behavior if it impacted our ability to be insured or increased our health insurance rates? Or, would we simply try hiding these specific details of our life so that those that could use this information against us wouldn’t have access to it?

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Topics: U.S. Healthcare, Health Insurance, data, Social Media

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