Year: 2018

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A Nice Business Perk With Your Omnibus Spending Bill, Sir?

Dear Group,

The chart above is a screen shot taken of the stock price of Omeros, a small bio-pharmaceutical company based in Washington State. Last week overnight between Wednesday and Thursday its stock price jumped from 11.56 to 16.78 dollars per share, an increase of 45 percent. Wouldn’t you have liked to already own that stock on Wednesday (and maybe sold some of it on Thursday)?

I guess this is the way the real money is made in the stock market. Institutional investors trading overnight had gotten wind of something about Omeros. When the markets opened to the little guy on Thursday morning the price had already popped. What happened?

This is where Cathy McMorris Rodgers and Paul Ryan come in. If you’re pressed for time go to FoxBusiness for the source article, but if you want the expanded version read on. (Versions of this article  also appeared Sunday in the Spokesman and the Sandpoint Daily Bee.) First, some background:

The story of Omeros’ overnight stock bump is the story of Omidria, the company’s main cash cow drug. Omidria is a combination drug (see details in the P.S. below) used only in eye surgery, specifically cataract surgery. The surgeon injects the drug into the front of the eye to dilate the pupil and reduce inflammation and discomfort. Omidria comes in a single use vial. The company priced the drug at nearly $500 per vial. For two years, as is the custom (since Medicare is forbidden to negotiate drug prices with drug companies) Omeros was paid by Medicare as a “pass-through,” i.e. Medicare paid the cost of the drug to Omeros. Without a “pass-through” exception like this one for Omidria, Medicare ordinarily says to the surgery center: “Here, you have this amount of money to do this surgery, everything included, you pick what you use.” That’s what Medicare usually does. So for two years cataract surgeons got to try out Omidria without thinking about the cost of the drug, i.e. the cost didn’t come out of their pockets, their patients pockets or the pocket of the surgery center in which they operated. Instead it came out of our pockets, from dwindling tax revenues. (For perspective Medicare’s “allowed” global fee amount to a hospital for a cataract surgery is $1,921.09.  For an ASC, it is $978.21. That’s before geographic adjustments. It does NOT include the surgeon’s “allowed” fee. Now consider the “passed through” price of Omidria is $500. That’s half again the outpatient surgery center’s global allowable. Drugs pricing is absurd.)

The idea is supposed to be the surgeon will learn in which patient’s eyes the drug is and isn’t useful, consider the cost of the drug, and balance the two in deciding what to use. The drug company bets that enough surgeons will believe the drug offers an advantage also hopes they will incorporate the drug into every cataract surgery while the price of the drug is not an issue. Omera tries hard to insure that use of Omidria becomes the “standard of care.” Then when Medicare drops the “pass-through” payment there will be a lot of whining about not being able to afford to use this wonder drug.

We’re all supposed to forget that the company Omeros got to name the almost $500 price tag at the beginning of all this, and we’re supposed to forget that Omeros is a publicly traded company with a stock price and a lot of money spent on marketing and lobbying. (So far they haven’t offered a penny of dividends.)

After two years we are also supposed to forget older, much cheaper drugs work just fine for the vast majority of cataract surgeries for dilating the pupil and suppressing inflammation.

Take note there is no free market for this drug. The original price is established by the company. Medicare is forbidden to negotiate the price. No patient gets to shop around even if they were knowledgable enough to do so effectively, and until the “pass-through” goes away, neither the surgeon nor the surgery center sees the cost or feels the pinch of the cost. Essentially, the system allows drug companies like Omeros to offer a “free” trial period in which to hook their surgeon customers, all on the taxpayers dime.

Omeros’ “pass-through” payment expired the end of 2017. Its stock price slumped from $20 to near $10 over a couple months where we find it in the above graph last Wednesday evening. What’s a CEO to do? Apparently, he or she goes to their “pro-business” Congresspeople to get a “rider” on a “must pass” bill like the Appropriations bill Trump signed last Friday. If a Congressperson is clever it is pretty easy to tuck away a provision to help out a campaign contributor in one page of text in a 2,232 page bill. Surely no one will notice. Hell, nobody will even bother to read all those pages, will they?

Actually, they will read it. FoxBusiness published an article entitled “Benefits of lobbying evident for small drugmaker” on March 24 from the Associated Press. Particularly considering the conservative source, it is well worth your time to read. McMorris Rodgers portrait is found at the top of the article.

According to the article McMorris Rodgers and Paul Ryan slipped this into the “must pass” bill at the last minute. You can read the pertinent section of the law here. It’s on page 1949 and it’s entitled “TITLE XIII—REVISIONS TO PASS THROUGH PERIOD AND PAYMENT RULES.” To be fair, both Parties have a history of slipping little zingers into “must pass” bills, zingers that couldn’t possibly get enough of attention of Congressional leadership to bring up, discuss, and actually have a separate vote.

  • Omeros spent just over $1 million on lobbying in 2017, up from $645,000 a year earlier as the company brought aboard two new firms to make its case to Congress and the Trump administration, according to lobbying disclosure records filed with the House and Senate.
  • The political money website Open Secrets shows that Omeros CEO Demopulos donated $39,600 in the 2018 election cycle to the National Republican Congressional Committee, the campaign arm of House Republicans. [some of which money will no doubt flow back to our district to defend CMR and smear Lisa Brown]
  • Federal Election Commission records show that Demopulos also donated $5,400 directly to Speaker Ryan’s campaign on Aug. 31, 2017. [That’s the maximum legal direct-to-the-candidate donation.] Demopulos gave $5,000 to Ryan’s political action committee, Prosperity Action Inc., on the same day.

McMorris Rodgers defense from the FoxBusiness article:

  • Nate Hodson, a spokesman for McMorris Rodgers, said she pushed the measure ‘to provide patients across the country access to safe, innovative, life-changing drugs.’ 

Perhaps her heart IS is the right place on this, but even if it is, this rider of hers and Ryan’s doesn’t smell right considering the circumstances. There is NOTHING about the lauded “free market” in this rider. It IS “pro-business,” though, a specific few businesses graced with $26 million of our tax money over ten years.

From another source, The Northwest Arkansas Democrat Gazette. (Rated “Center Right” by mediabiasfactcheck.com) [Bold is mine.]:

  • This provision is the correct policy, was approved by both Republicans and Democrats involved in writing the bill, and was included at the request of members of our conference,” said Ryan spokesman AshLee Strong. “To suggest any other reason is not only false but absurd and insulting.

Sorry, Mr. Paul Ryan, it may be insulting, and properly so, but it is NOT absurd.

This in a time when the public is fed up with drug prices… You choose for Ryan and McMorris Rodgers. Are they hapless victims of their own good intentions or are they trying to pull a fast one to satisfy a campaign contributor? I don’t see another option and I like neither of the alternatives.

Keep to the high ground,

Jerry

P.S. Omidria is a combination of two drugs, phenylephrine 1% and ketorolac 0.3% . Phenylephrine has been around many, many decades, ketorolac more than a decade. To be sure, injecting these drugs into the eye is a new use. Getting that approved by the FDA no doubt required expensive testing to prove safety and efficacy, but these are NOT new drugs.

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A Political Journey–My Changing Impression of the Democratic Party

Dear Group, 

In the lead up to the November 2016 election, I had an uneasy feeling as I watched TV coverage of the national Democratic Party, all the glitz, the balloons, the festoons, the fancy clothes, all the symbolism of wealth and power. I confess I felt a little manipulated, a little condescended to, by a national Democratic machine divorced from my reality. (If i channel surfed to the Republican scene the unease I felt over the Democrats was quickly replaced with gut-wrenching revulsion.) 

In my imagination politics in general was always a dirty, messy, and possibly underhanded endeavor, almost certainly manipulated by big money. My mental “frame,” the image that lit up in my brain at the mention of politics, was an image mapped on that old velvet print wall hanging often seen in basement recreation rooms. You know the one. Usually it was on the wall next to the pool table. It depicts dogs sitting like men around a table playing poker, each wearing a green visor and smoking a cigar, the whole scene in a dimly lit, smoke-filled room. That was the Democratic scene for me. My frame of the Republican poker table had the dogs sporting top hats, tails, and cigars, looking like the plutocrat in Monopoly. In my mind’s eye I didn’t have a place to sit at either table. 

Shortly after the Trump minority election, feeling thoroughly desperate, abandoned, and fearful for my country, I started writing this Indivisible Group email to twenty friends I thought might want to commiserate. I did not write as a Democrat. I wrote and continue to write as an independent mind, an “Indivisible.” I am not by nature a “joiner.”

In the last year and a half as an observer and/or participant in the politics of eastern Washington and northern Idaho my mental image, my frame, has changed a lot. I have met dozens of other people who share my same concerns. I have met widows at their doorsteps who confided to me in a whisper that they were Democrats, widows who said hey were afraid to mention politics to their neighbors for fear of a nasty response. I have met Republicans who regret voting for Trump, Republicans who fear for their country in the same way I do. I have had neighbors I thought were probably vehement Republicans make a point to pull me aside and tell me they took heart at my “Repeal Cathy, not the ACA” yard sign.

With my smoke-filled room mental image, imagine my surprise when I showed up at the new digs of the Spokane County Democrats (in the Teamsters Building on the NE corner of Division and Indiana) and found a lot of friendly people, friendly people with my same worries and concerns, friendly people who have been nurturing the local Democratic Party apparatus during dark times in eastern Washington and nationally. There I met a mix of people very familiar with the candidates and races and vote numbers and a lot of folks like myself who for years had overlooked local politics and instead were captivated by the national drama…and had felt helpless, disenfranchised and dismayed.

The local Democratic Party is and will be what we make of it. As individual citizens concerned for the future of our county it is time to throw out that tawdry dogs-playing-poker image of politics, roll up our sleeves, “come out” if you will, talk with our friends and neighbors and use the knowhow and the political scaffold that is the local Democratic Party, use it to get this ship turned around. I can work with this Party and retain my identity. I recognize among the many in this local Party members of my tribe.

Join me tomorrow, Saturday at the Spokane County Democrats at 10:30A-12N to learn more. For details, check out yesterday’s email.

Keep to the high ground,

Jerry

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The Myth of the Free Market in Health Care

Dear Group,

Nationally we stagger, punch-drunk from issue to issue, taxes, DACA, tariffs, MeToo. The list goes on. We need to come back to this: Cathy McMorris Rodgers and “movement conservative” ideology is plain wrong and out of touch on many things, but nowhere are they more wrong than in the application of their ideology to health care in this country. On February 21 I sent out the email I’ve copied below.  I present it again today to remind us how unpopular McMorris Rodgers’ efforts to repeal the Affordable Care Act were and still should be. This issue should be front and center on our way to November.

CMR’s Ideology and the Myth of Free Market Health Care

Here in these United States we spend more than $10,000 per year on health care on average for every man, woman and child. Canada and the United Kingdom each spend per capita less than half that per person. In spite of spending less than half as much per person than we do, health outcomes in Canada and the United Kingdom are better than ours. Yes, in Canada you might have to wait, but in Canada people with diabetes have access to treatment. They don’t have to make a choice between getting treatment and feeding their families. They don’t have to neglect their disease for fear of bankruptcy, go blind, and wind up on the Canadian equivalent of Social Security Disability.

While Cathy McMorris Rodgers remains in office this WILL NOT CHANGE. Why is that? It is because McMorris Rodgers has drunk the Republican/Libertarian Kool-Aid. Contained in that Kool-Aid is the absolute conviction that the free market solves all problems and that all government social programs are inefficient and foster dependence.

Facts that don’t fit her mind frame of Libertarian ideology bounce off–if they reach her at all. At a “Coffee With Cathy” in April of 2017 I brought up the Canadian experience. Her response was pure Republican/Libertarian framing: She asserted that Canadians come down to the United States in droves to get procedures done in the United States on account of endless waits and rationing.

Spokane is a major medical center close to the Canadian border. I told Ms. McMorris Rodgers I practiced for 28 years doing ocular surgery, quite a lot of it urgent and emergent. I told her that in those 28 years I operated on just one Canadian patient. I told her that I have many Canadian friends, and that all of them speak well of the Canadian health system. There was a brief blank stare in response, a tiny gap before she pivoted to another angle. Was that the moment my reality bounced off her frame? I’ll never know. 

Did McMorris Rodgers carry this inconvenient fact with her as a result of our meeting? No. On May 4, 2017, she enthusiastically voted for and cheerled the American Health Care Act, the AHCA, aka Trumpcare. There was nothing in that bill that was aimed at reducing the per capita cost of health care or even a glimmer of recognition that other countries have great health care systems that cost half of what we spend. Instead, the AHCA would have moved us further away from national systems.

The Republican House AHCA…proposed major reforms relative to current law (ACA) that would substantially reduce the number of persons covered, moderately lower the budget deficit over a decade, reverse the tax increases on the top 5% (mainly the top 1%), dramatically cut Medicaid payments (25-35%) that benefit lower-income persons, and expand choice by allowing lower quality insurance to be purchased at lower prices for the young and middle-aged.  Wikipedia

Notice the earmarks of Libertarian ideology. McMorris Rodger’s AHCA cut taxes on the rich (a basic tenet of her faith), lowered total government expenditures over a decade (which she later enthusiastically gave to corporations and the already wealthy by voting for and cheerleading the Tax Scam Law), and cut money out of a social program, Medicaid (another of her fundamental tenets of faith). Would it lower the per capita cost of health care? NO! It pretended to lower cost by expanding “choice” (a fundamental talking point), in this case, the “choice” was to buy inadequate insurance and expose oneself to medical bankruptcy. 

Oh, yes, there is one McMorris Rodgers talking point about lowering the actual cost of care. What is it? “Encouraging competition by increasing transparency.” Really? The patient is going to lower the per capita cost of health care in the system by shopping around for the cheapest lab test or MRI? That isn’t just unrealistic, it is absurd. A very few patients equipped to critically evaluate quality and willing to spend the time might bargain for the best deal in this market, but that is a tiny minority. You won’t find Trump or Charles Koch bargaining for a cut rate MRI. They’ll hire the best physician they can find to get the best MRI…and damn the cost. The folks with the least time (working two minimum wage jobs) and in the most dire circumstances (presenting with a neglected and now acute problem) certainly are NOT going to “shop around”. What make-believe planet do these free market true believers live on?

McMorris Rodgers’ slavish devotion to free market ideology blinds her to reality. The unfettered, unregulated free market is the bedrock tenet of the “Republican cause,” the cause for which she hones the sales pitch. Health care in this country is ridiculously expensive because it is not and never will be a “free” market. No amount of pontification by Paul Ryan, McMorris Rodgers and the Freedom Caucus will make it so. Pretending that free market principles will lower cost in a for-profit environment is a delusion from which McMorris Rodgers is incapable of recovering. 

Our country’s problem with health care cost will not be solved while McMorris Rodgers is in office. Her ideological frame prevents her from understanding. Send her home.

Keep to the high ground,

Jerry
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The ADA, What HR620 says of our Rep and the Republican Party

Dear Group,

The Americans with Disabilities Act was passed and signed into law by a Republican, George H.W. Bush, in 1990. It passed the Senate 76-8. It passed the House on a voice vote, a voice vote in a chamber with 250 Democrats and a 183 Republicans. It wasn’t even controversial enough to have a roll call vote! 

Last Thursday the House passed HR 620, the ADA Education and Reform Act of 2017, and sent it to the Senate. It passed 225 to 192. It is a short bill. You can read its text here. It is superficially innocuous, a mere technical fix, but that is deceiving. Even McMorris Rodgers recognized this. She actually voted “Nay” on final passage of H.R. 620, one of the few times she has voted against the “conservative cause.” 

She even issued a statement: “The ADA was enacted more than 25 years ago to protect the disability community, and as part of that community, I could not in good conscience vote for this bill,” she said in a statement.

McMorris Rodgers voting against a Republican bill was so notable it got a quarter page article in the Northwest Section of the Spokesman on Friday! In the paper version it was titled “McMorris Rodgers breaks with GOP on disability vote.” McMorris Rodgers is quoted, “While I can appreciate and understand the intent to provide fairness to businesses, any changes should preserve the spirit of the ADA and reduce the burden on individuals with disabilities to bring legitimate compliance claims,”

I am pleased with McMorris Rodgers’ statements and vote. Her family is, indeed, part of “the disability community.” Her “Nay” vote on H.R. 620 was politically painless. The bill, part of the “conservative cause” she ordinarily supports, passed easily. I don’t wish to sound snarky, but I might like her voting record better if she had family members who were a part of other at-risk groups. The following three paragraphs are from we-can-do-better.org:

In the re-authorization of the Violence Against Women Act, Congresswoman Cathy McMorris Rodgers [R-Wash] supported the version of this bill that excludes Lesbians, Native Americans, and immigrant women from protection.  Cathy McMorris Rodgers stated that those women are “a side issue”.   Spokane County’s own sheriff, Ozzie Knezovich, a Republican, has stated “My concern is that the safety nets are rapidly being stripped away with funding.  As safety nets slip away, it will increase the number of calls, and number of violent calls we respond to.”

Second, Cathy McMorris Rodgers voted against the Lilly Ledbetter act, which is aimed at protecting women from pay inequalities in the workplace.

Third, through the sequestration process McMorris-Rodgers voted with her party leadership to cut funding for birth control for low income women.  This is likely to result in thousands of unwanted pregnancies.

I want a Representative who recognizes and supports all solid social programs no matter the composition of her family.

Keep to the high ground,

Jerry

P.S. Extraneous detail on H.R. 620 voting:

McMorris Rodgers was joined in her “Nay” vote by Dave Reichert, “The Sheriff,” the Republican Rep from WA CD-8 who is stepping down this year (Dino Rossi is running to replace him). I applaud Reichert’s vote. Not running again apparently frees him from Republican orthodoxy.

Rep. Jaime Herrera Beutler, [R-WA-CD3], a protege of McMorris Rodgers, not only voted “Yea” on H.R. 620 but co-sponsored it. Dan Newhouse [R-WA-CD4] joined Buetler with a “Yea” vote. All other WA Reps are Democrats and voted “Nay”. 

There was some party crossover. Twelve Democrats voted for the bill, nineteen Republicans voted against it. Eight Democrats and five Republicans did not cast votes.