Since the 1980s, direct-to-consumer advertising of prescription drugs has been prevalent in the United States — one of only two high-income countries to permit such ads…Endorsements of prescription drugs on social media can be rapidly disseminated across platforms, complicating regulatory oversight…
Under federal law, a prescription drug is considered to be misbranded if labeling or advertising for the product is false or misleading, which can include omission of material information. According to implementing regulations from the Food and Drug Administration (FDA), fair balance is required in the communication of benefits and risks…when social-media influencers and online pharmacies are the source of drug-related communication, their financial or other relationships to manufacturers or compounding pharmacies can be unclear…
Patient-facing content that now circulates pervasively on social-media platforms can blur the distinction between health-related information about prescription drugs and misleading advertising…
Stronger guardrails are needed to protect the public and to keep pace with the ways in which patients now encounter drug promotion…
The FDA could modernize fair-balance requirements for digital platforms by mandating that information about risks be presented directly alongside claims about benefits (e.g., provided in the same social-media communication, using spoken or visually prominent content), rather than being relegated to fine print or a separate website…
The Protecting Patients from Deceptive Drug Ads Act (S. 652) attempts to modernize oversight by requiring influencers to disclose compensation they receive for prescription-drug promotion to the Open Payments database. It would also authorize civil penalties for entities engaging in paid social-media communication that they know is misleading or that is recklessly false and extend FDA advertising requirements, including fair-balance obligations, to telehealth companies. Under such a regime, regulators could prioritize enforcement actions against high-reach celebrity-endorsement campaigns, since a small number of people have outsized influence and enforcement activities could deter similar behavior.
My take: Paid influencers should be held to the same standards of disclosure about their pharmaceutical endorsements as manufacturers.
Kvernufoss, Iceland. The size of the waterfall can be gaged in part by looking at the people behind the falls.
The city of Denver makes it’s PBM [pharmacy benefit manager] contract available online. So I grabbed it and had Claude look at it and answer a simple question “Where are they getting ripped off”
Then I asked for a simplified version of the above :
Here it is in plain English. Denver hired UnitedHealthcare to run its employee health plan. Denver pays the actual medical and drug bills itself — United just processes them. That’s what “self-funded” means. The problem is that Denver can’t see what it’s actually paying for drugs.
United buys the drug for one price and charges Denver a different price. It keeps the difference. Say the pharmacy gets paid $40 for a prescription. United bills Denver $100. United keeps $60. Denver never sees the $40. The contract says this out loud in three different places — it’s not hidden, it’s just written in language nobody reads. There’s no cap on how big that gap can be.
Drug companies pay rebates. United keeps all of them and hands Denver a flat number instead. United collects rebate checks from drug manufacturers. Instead of passing those through, it promises Denver a fixed amount per brand prescription (about $740 in 2023). If the actual rebate was $1,500, United keeps the extra $760. The contract literally says any rebates above the fixed amount belong to United. Denver has no right to know what the real number was.
United decides which drugs are “specialty” — and specialty drugs are where the money is. The contract defines a specialty drug as, essentially, “whatever United’s own specialty pharmacy sells.” United also reserves the right to reclassify drugs whenever it wants. Once a drug is labeled specialty and filled at United’s own pharmacy, it drops out of the normal price guarantees entirely. So the most expensive drugs are the least protected.
The most expensive drugs of all — the ones given in a doctor’s office or infusion center — have no price guarantee at all. The contract flatly excludes them. Cancer drugs, infusions, injections administered by a provider. Zero pricing protection.
Denver can’t shop around, and it can’t leave without a penalty. Denver isn’t allowed to negotiate directly with any drug manufacturer. It must use United’s mail-order pharmacy exclusively. And if Denver hires an outside vendor that steers employees to cheaper drugs or cheaper pharmacies, United can cancel all the pricing guarantees. If Denver ends the drug program early, United keeps every rebate it owes.
Denver can’t audit its way out of this. Denver is allowed one audit a year, capped at 300 prescriptions, using a random sample United has to approve. No auditors paid on commission. No computer-based searches for errors. You cannot find a pricing problem across hundreds of thousands of claims by randomly checking 300 of them. The audit rules exist to make sure nothing gets found.
The bottom line for an HR person: the drug program looks free. There’s no fee for it anywhere in the contract. That’s the tell. United isn’t working for free — it’s getting paid out of the drug prices, and the contract is built so Denver can’t measure how much.
I will focus on the first article but the others provide additional insight into this issue.
An excerpt:
Omar Yaghi, an immigrant to the United States who shared last year’s Nobel Prize in Chemistry, has left his faculty post at the University of California, Berkeley, for one in China, where he will lead an institute using artificial intelligence to accelerate the discovery of new materials…
Last year, three of America’s six winners of science Nobels were born outside the country. In this century, overall, the émigré fraction for U.S. Nobels in physics, chemistry and medicine now stands at 40 percent…
Last year, before flying to Stockholm to receive his Nobel Prize, Dr. Yaghi in an interview with The New York Times voiced concern about Mr. Trump’s immigration policies, saying that they endanger the nation’s system of universities, companies and governments that promote scientific excellence…
My take: The arbitrary cuts and policy shifts have undermined an engine for American prosperity, stalled the development of medications for numerous disorders, imperiled thousands of patients enrolled in clinical trials. and resulted inthe loss of enormous scientific/medical talent.
For those of you who like online games, there are two that I recently discovered that are quick and fun. Currently, both games are free.
MapTap.gg Daily geography game. Each day, the game asks you to identify 5 locations on a realistic unmarked 3D globe. The closer your guess, the higher your score. Each day there are short vignettes and facts.
Anno-Game Daily history game. Each day, the game asks you to determine the year of 5 important historical events. The closer your guess, the higher your score.
K Schulman, AL Kellermann. NEJM 2026;394:1669-1672. Substandard Generic Drugs — Threats to Patient Safety and National Security
An excerpt:
Generic drugs account for more than 90% of prescriptions filled in the United States. The first paragraph on the home page of the Office of Generic Drugs at the Food and Drug Administration (FDA) asserts that “FDA-approved generic drugs have the same high quality, strength, purity and stability as brand-name drugs.” On the strength of this assurance, America’s doctors, pharmacists, and patients assume that every version of a generic drug is equally safe. But this proposition is now being seriously challenged...
Between 2009 and 2019, the availability of generic medicines saved U.S. patients $2.2 trillion, according to the FDA.
Over time, intense price competition drove most production of generic drugs and ingredients offshore to countries with low labor costs and lax regulatory controls. Once that shift occurred, relentless pressure to minimize costs led some manufacturers to compromise on quality. Rapid globalization also outstripped the FDA’s capacity to monitor manufacturers. In 2022, the Government Accountability Office reported that 61% of foreign plants had not been inspected by the FDA in the preceding 5 years.1
When FDA inspectors finally reach these plants, some find glaring problems…More than 60% of generic-drug shortages are attributable to quality concerns, according to the FDA…
A private-sector laboratory detected high levels of nitrosamines (known carcinogens) in drugs made by several FDA-approved manufacturers, prompting recalls of metformin, angiotensin-receptor blockers, angiotensin-converting–enzyme inhibitors, prazosin, and ranitidine. More recently, independent tests of generic methylphenidate found nitrosamine levels above the FDA’s safety threshold in 7 of 15 immediate-release products…2
Recently, a team of U.S. and South Korean researchers with access to FDA data determined that significantly more serious adverse event reports were linked to generic drugs manufactured in India than to equivalent drugs manufactured in the United States…4
In 2008, a total of 238 deaths in the United States were linked to adulterated Chinese heparin. When the FDA toughened its approach to quality assessment of foreign manufacturers, shortages of more than 200 medications followed. This crisis prompted the FDA to prioritize minimizing drug shortages over ensuring safety…
There is a better way to assure the safety of generic drugs. In 1994, the European Medicines Agency (EMA), for example, established a proactive approach involving risk-based surveillance in addition to systematic planned and ad hoc testing of generic drugs both on the market and during routine inspections of manufacturers (in contrast, the FDA does not routinely test generic-drug products themselves, either on the market or during quality inspections of manufacturing plants). EMA testing relies on a network of official medicines control laboratories (OMCLs) that operate in accordance with International Organization for Standardization (ISO) accreditation standards for testing and calibration laboratories. At any point in a drug’s life cycle, an OMCL can pull samples for product testing...
The U.S. government should oversee an effort to rebuild America’s capacity to manufacture generic drugs, combining investment in private manufacturing with incentives for purchasing U.S.-made products under the Medicare and Medicaid programs. Currently, the United States is vulnerable to an embargo of essential drugs or the materials required to make them. A recent evaluation for the Department of Health and Human Services found that 87% of sites that make active pharmaceutical ingredients (APIs) and 63% of sites that produce finished dosage forms were located overseas…
My take (borrowed from the authors): Most generic drugs are safe, but a troubling minority are not…The United States already tests a wide range of consumer products. We should also test our generic drugs.
Outside the U.S., approved generic versions of semaglutide are beginning to hit the market. India and Canada recently approved their first generic versions of Ozempic, and countries including China, Brazil and South Africa are expected to soon follow…The U.S., however, remains on a very different timeline.
Evergreening
The standard length of a drug patent in the U.S. is 20 years from the filing date. Novo Nordisk first applied for a U.S. patent on semaglutide in 2006. Due to patent extensions, approved generic versions of semaglutide aren’t expected in the U.S. until at least the end of 2031…
Drugmakers often file additional, secondary patents — a tactic known as evergreening — to extend their monopoly on their product and delay generics. The additional patents can include new doses, formulations or delivery devices…
Novo Nordisk has filed at least 49 semaglutide patents…
Drugmakers’ use of the patent system has delayed cheaper competition and kept prices high for patients.
My take: This is a bad deal for U.S. There is no good reason why patients in the U.S. need to be paying 5-10 times as much for semaglutide as patients in Europe.
Zack Cooper, NY Times, 5/4/26. This Is the Biggest Culprit for High Health Care Spending.
An excerpt:
Responding to the wrongdoing of insurers is imperative, but it won’t do much to address the unsustainable cost of health care. We are directing our anger at the part of the system that is most visible and frustrating (insurers’ restrictions on care) while ignoring the part of the health system that is most responsible for high costs and economic pain: hospital prices…
Hospitals in the United States earn $29,000 on average for a replacement covered by private insurance and $16,000 for one covered by Medicare. In Germany, the public system of nonprofit insurers, which covers 90 percent of the population, pays hospitals $9,400.
Hospital prices are the leading driver of the 320 percent increase in insurance premiums that Americans have experienced over the past 25 years. Since 2000, prices at hospitals have grown faster than prices in virtually any other sector of the economy. They have grown three times as fast as inflation and twice as fast as prescription drugs and doctor visits.
The reason hospital prices are so high: hospitals’ accumulation of market power, which brings them more bargaining heft when they negotiate prices with insurers. Since 2000, there have been more than 1,300 hospital mergers among the nation’s approximately 5,000 hospitals. When hospitals that were once competitors merge, prices go up, often by double-digit percentages, with no measurable improvement in patient outcomes. Even though we rely on competition to determine hospital prices, 21 percent of hospitals are effectively monopolies — they have no competitor within a 30-minute drive — and an additional 24 percent face only one competitor…
If hospital prices are such a key driver of rising costs, why aren’t elected officials doing more about them? Partly the answer is politics. Hospitals are the largest or second-largest employer in many counties in America, and a formidable lobbying force — spending more than $100 million annually in Washington, often more than health insurers spend, to protect their interests. Politicians who represent places with dominant hospital systems are not eager to pick a fight with these institutions. Moreover, when an insurer denies your claim, you know it immediately. When a hospital merges and its prices go up, the harms — slower overall economic growth and job losses outside the hospital sector — are real but diffuse…
Holding that tension between the immense good that hospitals do and the economic harm their market power creates is what it will take to address the rising cost of health care.
“Let’s start with a basic point — the entire concept of hospital “prices” is flawed. Hospitals are largely price takers, not price setters. Government programs like Medicare and Medicaid set rates administratively. But Medicare reimbursement continues to lag behind inflation — covering just 83 cents for every dollar spent by hospitals in 2023 — resulting in over $100 billion in underpayments. Needless to say, government rates fall far short of covering hospitals’ actual costs. Likewise, commercial insurers aggressively negotiate payment terms with hospitals. In many cases, these are large, vertically-integrated companies that hold significant shares in their markets. With that kind of market power, commercial insurers do not simply accept the numbers that hospitals offer and then sign on the dotted line. Thus, the notion of hospital “prices” does not reflect how those purposed “prices” are set in the real world…But here’s the reality: Over the same time frame, commercial insurance premiums have increased more than hospital prices…premiums are primarily growing due to an increased need for services: People are sicker and they need more care.”
“The essay also … appears to excuse commercial insurers’ role in deciding to raise their own premiums because they are in the “business of making money…The essay argues that policymakers must be harder on hospitals.”
“The essay also fails to ask another important question: Why are hospitals forced to raise their “prices”?…In 2025, total hospital expenses grew 7.5%, more than twice the rate of growth in hospital prices. Costs increased in every major category — workforce, drugs, medical supplies, and more. Hospital expenses also increased because of increased patient complexity; growing uncompensated care; continued government underfunding; changes in the policy landscape; and the many commercial insurer tactics like prior authorization and improper denials that the essay observes.”
My take: There are lots of reasons for high healthcare costs. There are not simple fixes nor enough incentives to make changes.
There are several insightful and concise articles that highlight the reasons for increased U.S. healthcare costs as well as challenges: corporitization of health care, private equity, and health-harming corporations.
“Americans spend more on healthcare than anyone else in the world. Just insuring a family here costs nearly $27,000 a year, enough to buy a car. The main cause: Prices are far higher in the U.S. for the same medical products and services, from surgeries to drugs.
American patients have also been using more care recently, including costly hospital treatment and expensive new drugs for weight loss.”
Prescription drugs cost a lot more in the U.S.
Big hospitals can charge higher rates because of consolidation
The U.S. spends far more than other countries on administration
This article notes that historically, in economic experiments, physicians have acted more altruistically than members of the general population and this results in better outcomes for patients. However, “extreme size and corporate ownership are leading to the widgetization of care. It is difficult or impossible for a large organization, even one with well-intentioned leaders, to avoid treating its physicians and staff like interchangeable widgets whose behavior can be monitored and controlled to maximize profit….Physicians who feel like widgets are more likely to behave like widgets…there is evidence that corporatization is leading to higher prices, higher health care spending, and unchanged quality or poorer quality.”
“Accumulating evidence presented in scholarly articles and government reports indicates that the proliferation of PE in health care has reduced access to care, increased costs, and compromised quality of care…PE firms often extract value using tactics that obscure a health care system’s profitability while maximizing financial returns for the firm and its investors. These tactics include sale–leaseback transactions, in which facilities are sold to entities affiliated with a firm and then leased back to the seller at inflated rates. Another strategy is dividend recapitalization, whereby fund managers take on additional debt to pay partners instead of putting money toward staff, critical maintenance, or supplies…
PE investors achieve cost savings by laying off workers, reducing salaries and the number of full-time employees, assigning services previously provided by physicians to other health care professionals, and cutting critical but low-profit services…
Cream skimming — selectively caring for healthier (i.e., lower-cost) patients — is another widely used PE practice. This tactic limits access to care for older and sicker patients, leaving them worse off after PE investment.2 Despite this behavior, hospital acquisitions by PE firms have been associated with increases in emergency department deaths and deaths after emergency surgeries.3,5“
“Health-harming corporations use common tactics to corrupt scientific data, including influencing research questions, attacking and discrediting independent science and scientists who do not support the industry’s position, suppressing scientific data on the health harms of their products, and sponsoring research that downplays those harms.27,28
For example, the primary U.S. manufacturers of perfluoroalkyl and polyfluoroalkyl substances (PFAS) — DuPont and 3M — used multiple tactics to downplay evidence of PFAS toxicity, including successfully suppressing for more than 20 years internal studies showing adverse effects of PFAS…
Corporations have various tactics for influencing the public’s beliefs about their products’ benefits and harms. These include sophisticated and pervasive advertising and marketing campaigns; use of public relations companies, front groups, and think tanks; and capture of consumer groups.
For example, opioid manufacturers deployed particularly insidious advertising strategies for marketing opioids to vulnerable populations, such as recruiting youth coaches and school nurses to encourage opioid use by children, developing unbranded initiatives encouraging adolescents to ask clinicians for pain medications, promoting “safe opioids” for untreated pain in women, and distorting policy discussions of unmet needs for pain medication…
Make America Healthy Again initiative highlights the roles of toxic chemicals and pesticides, ultraprocessed foods, and corporate influence on science in harming children’s health.47 But…the administration has appointed former lobbyists and scientists from the chemical and petroleum industries to lead EPA offices responsible for regulating air pollution, toxic chemicals, and pesticides48,49 — and plans to eliminate regulatory and other measures, which will lead to increased exposure to toxic chemicals and air pollutants, thereby increasing child health risks.50,51
My take: Poorly-regulated capitalism is not good for patients. Insurers, private equity, hospitals, pharmaceutical companies and many providers may prioritize profits over care.
This satire is particularly amusing for those who have watched “The Pitt.” Unfortunately, many of the health care policy changes under this administration will cause harm here and throughout the world for decades.
Background: “Over the past decade, a remarkable number of independent community gastroenterologists became part of larger groups, primarily due to financial concerns. Although the number of gastroenterologists increased between 2012 and 2020, the number of associated practices decreased by more than 650 (14%), with the number of physicians practicing in groups of less than 10 decreasing by nearly 1500 (35%).1 Simultaneously, the number of self-employed physicians decreased,2 while the number of hospital-employed and private equity affiliated physicians increased.3,4 Surveys of practices engaged in such consolidative behavior most often cite financial uncertainty given increased costs, decreased revenues, and continuing regulatory pressures, along with personal financial gains, as important motivations.5,6“
Methods: The authors examine how “Medicare reimbursement has affected independent, community practices over time, with a particular emphasis on hourly rates to account for any efficiencies in endoscopic procedure times over the past decade…[using] multiple datasets from the Centers for Medicare and Medicaid Services (CMS).”
Key finding:
“All major endoscopic procedures investigated brought in decreased associated professional revenue between 2014 and 2024 per unit billed. Most procedures saw a reduction between 30% and 40% in the amount of cash brought into the practice per procedure”
“Although independent practices faced tough decisions due to these trends, other health care stakeholders benefited. Concurrently, facility revenues, medical complexity,13 overall health expenditures,14 drug prices,15 and pharmacy benefit manager profits16 all increased, the latter by approximately 80%”
My take: This small study shows how “independent gastroenterology practice reimbursement decreased substantially since 2014 despite increasing patient complexity and capital flows into health care, threatening the viability of many community practices.”
In a previous blog post in 2019, it was noted how the IRS proved that having health insurance saved lives (How The IRS Proved That Health Insurance Saves Lives); just receiving a letter recommending getting coverage reduce deaths by ~1 in 1600. Another study in 2014 (in Massachusetts) showed that for“every 830 additional people who got insurance under Massachusetts’ health reforms prevented roughly one death.” If this were extrapolated to broaden health care coverage to everyone in the U.S this could amount to preventing 20,000-45,000 deaths per year (A Leading Cause of Mortality in U.S…. and 45,000 Unnecessary Deaths Per Year).
A new study shows how important ACA expansion has been to improved liver outcomes:
This review identified twenty-seven studies that met inclusion criteria across 4 clinical categories: hepatitis C virus (n = 4), liver transplantation (n = 10), hepatocellular carcinoma (n = 9), and cirrhosis or CLD (n = 5).
Key findings:
Twenty-three out of 27 studies showed patients benefited from the ACA, which notably included improved liver-related mortality in Medicaid-expansion (ME) states.
“Difference-in-difference analyses showed liver transplantation listing increased by 1.8% to 6.0% in ME vs NME states; early-stage hepatocellular carcinoma (HCC) diagnosis increased by 5.4%, and cirrhosis-related mortality rose more slowly in ME states (0.5–1.0 per 100,000 vs 1.4–10.4 per 100,000).”
HCV studies showed improved access to direct-acting antiviral therapy in ME states. Expansion states consistently reported higher direct-acting antiviral prescription rates and Medicaid reimbursement levels compared with NME states.
HCC survival outcomes improved more consistently in ME than in NME states after ACA implementation (median overall survival, 7.3 months versus 4.5 months, respectively).
Of the five studies that examined chronic liver disease and cirrhosis, ME was associated with lower emergency department readmissions, shorter hospital stays, and reduced hospitalization costs.
My take: The study findings, while not surprising, quantifies some of the improvements in survival and outcomes for patients who gained access to health insurance.
45,000 Unnecessary Deaths Per Year (2013): “45,000 American adults die each year because they have no medical coverage (Am J Public Health 2009; 99: 2289-95)”
gutsandgrowth 