Profits vs Ethics

[Deleted]

"According to the CDC, foot and leg amputations were 11 per 1,000 in 1996.  In 2008 that rate dropped to 4 per 1,000. The drop in amputations was attributed to better management.  But let's assess that.

According to the Journal of the American Podiatric Medical Association (2009), a foot or leg amputation costs between $30,000 and $60,000 in initial hospital costs, plus between $43,000 and $60,000 in costs for follow-up care over the next three years.  Lets use the high end of those numbers to adjust for the age of the data.  An amputation costs $120,000.

So, let's do some insurance style math.

Humalog treatment per month is $440 per month x 1,000 patients x 12 months = $5,280,000.  Four amputations at $120,000 each add $480,000.  Total is $5,760,000.

Let's assume Afrezza treatment per month is $1,000 per month x 1,000 patients x  12 months = $12,000,000.  Now, will Afrezza use for 1 year stop the already caused damage that leads to an amputation?  Likely not, but lets assume it brings the near term incidence rate down to 3 per 1,000.  That would mean that we have to add another $360,000 to the Afrezaa cost.  The total is $12,360,000"

seekingalpha.com/instablog/175233-spencer-osborne/5071131-afrezza-insurance?v=1510703546

[Deleted]

The above article doesn't take into consideration the long-term consequences of the patient, such as disability and unemployment due to amputations.

[dreamboatcruise]

Where does he claim he is getting those prices from? Looking at the most recent Symphony comparison it seems that Humalog would be $903 per script and Afrezza $932 per script... and likely for both of these they on average are for longer than 1 month.

I don't have SA account and have a bit of a hassle grabbing the text from the site to read, so haven't checked it out. Most of what is posted from this guy here has seemed pretty reasonable analysis such as on the cash issue. However, this seems totally bogus if he is asserting Afrezza is more than double the cost without presenting evidence to prove it. We can assume that the cost to insurers is much less than these retail figures for both Humalog and Afrezza.

[zuegirdor]

If you are a for profit HMO, the ideal market in diabetes is one that (by some mysterious animal force) drives all the insulin dependent diabetics to your competitors who are thus forced to raise their rates, driving away other customers, creating a dead pool of subscribers. Subsidizing these diabetic heavy companies would be socialism which will never happen as long as you are king, so they will fail in the market place, leaving you with an effective monopoly. With the monopoly in place, you can dictate how diabetics may treat themselves, primarily by weening them off carbohydrates since the cost of treating diabetes with prandial insulin is directly proportional to the amount of carbs they consume. And since, as King, you know what is best for everyone, you sleep well knowing that, though you have intruded in the most obscene and abusive manner into individual behavior as though you were some socialist dictator. You limit insulin options to the most "cost-effective" since it has never been proven that diabetics can meet their blood sugar control targets anyway. After a while the King dies and is replaced by parliamentary government. there is rejoicing thorughout the land. But few notice that HMOs, which is the only part of the economy that really hits you and your country where we all live (or die), are still ruled by the powerful corporate Kings, though no one seems to notice, except the diabetics.

[matt]

What he is saying, in essence, is that the higher price of Afrezza combined with a non-inferiority label means that insurance is not going to pay the premium for Afrezza in the absence of some hard economic evidence that it reduces the side effects of diabetes so long as lispro is cheaper.

Would insurance pay more if the benefits are proven?  Almost certainly they would because the cost of treating an amputee are very high indeed, and once a patient loses a leg they become increasingly sedentary which leads to more expensive cardiovascular complications.  Step one is proving that Afrezza can prevent the co-morbidities, but that is a long and expensive study.  However, it may be one that needs to be done.

[mango]

HbA1c is determined by (1) fasting plasma glucose and (2) postprandial plasma glucose. 

Loss of the early-phase insulin response is seen in both type 1 and type 2 diabetes. The early-phase insulin response must be replaced or restored in order to maintain glucose homeostasis. This can be achieved by administering an exogenous insulin which matches physiologic insulin secretion.

Restoring the early-phase insulin response allows for the restoring of glucose homeostasis. Glucose homeostasis is dysregulated when there is a loss or deficiency of the early-phase insulin response. The early-phase insulin response is a key mechanism involved in glucose homeostasis. 

The only exogenous insulin which restores the early-phase insulin response is Afrezza.

[Deleted]

Interesting comment regarding this issue

"As the former lead underwriter and CFO for a billion dollars of health insurance premiums, let me try to simplify it for you. Insurance companies are concerned about managing the overall costs of diabetes, not your two cherry-picked examples. (And I won’t even get into the artificial impact of rebates from PBMs.) Do you know what those costs include?

Try neuropathy that does not result in amputation, or retinopathy or kidney failure. How much do you think your studies would price out the cost of these issues? Or how about CAD, atherosclerosis, thrombosis, and stroke? (Are you aware that 74% of diabetics over age 65 die of either heart attack or stroke?) Now there’s some really low/no cost medical conditions! They must be, as you seem to ignore them in your “analysis from an insurance company perspective.”

Or what about an increased risk of infections due to the negative impact of diabetes on the immune system. Not to mention issues with the skin - infections, blisters and otherwise.

I’m sure you’re also familiar with gastroparesis. You must think, however, that the release of food by the stomach hours later than normal causing a sudden increase in BG levels, is a trivial complication of managing diabetes with little to no cost issues attached.

It might also help to reference your studies for the dramatic increase in hospitalizations for HHNS. But I guess those are probably trivial costs as well.

The insurance issue is NOT what you are proposing, i.e., that there is no cost-benefit to using Afrezza versus RAAs and other insulins. In fact, there is a gargantuan cost effectiveness of Afrezza in a non-half-baked analysis. The insurance issue, rather, is trying to get the underwriters and medical staff to recognize Afrezza’s impact on the normalization of blood glucose levels, with fewer and shallower excursions, and the positive impact on lifestyle due to its delivery mechanism, thereby encouraging greater compliance."

[dreamboatcruise]

Nov 15, 2017 13:29:44 GMT -5 matt said:

What he is saying, in essence, is that the higher price of Afrezza combined with a non-inferiority label means that insurance is not going to pay the premium for Afrezza in the absence of some hard economic evidence that it reduces the side effects of diabetes so long as lispro is cheaper.

Would insurance pay more if the benefits are proven?  Almost certainly they would because the cost of treating an amputee are very high indeed, and once a patient loses a leg they become increasingly sedentary which leads to more expensive cardiovascular complications.  Step one is proving that Afrezza can prevent the co-morbidities, but that is a long and expensive study.  However, it may be one that needs to be done.

From Symphony numbers it doesn't appear that Afrezza is more expensive.

[babaoriley]

Nov 15, 2017 13:29:44 GMT -5 matt said:

What he is saying, in essence, is that the higher price of Afrezza combined with a non-inferiority label means that insurance is not going to pay the premium for Afrezza in the absence of some hard economic evidence that it reduces the side effects of diabetes so long as lispro is cheaper.

Would insurance pay more if the benefits are proven?  Almost certainly they would because the cost of treating an amputee are very high indeed, and once a patient loses a leg they become increasingly sedentary which leads to more expensive cardiovascular complications.  Step one is proving that Afrezza can prevent the co-morbidities, but that is a long and expensive study.  However, it may be one that needs to be done.

Weren't the "comorbidities" (rhymes with "Aphrodite's) featured on one of the episodes of the original Star Trek series?  I'm not sure, but I think so.  They were sort of like the trillobites, but larger, meaner and not as fuzzy.  Or are they species that have the male and female genitalia?  At any rate, preventing cormorbidities is good, cuz a bad case of that, well, see ya later.

[xanet]

Nov 15, 2017 17:02:18 GMT -5 @kastanes said:

Interesting comment regarding this issue

"As the former lead underwriter and CFO for a billion dollars of health insurance premiums, let me try to simplify it for you. Insurance companies are concerned about managing the overall costs of diabetes, not your two cherry-picked examples. (And I won’t even get into the artificial impact of rebates from PBMs.) Do you know what those costs include?

Try neuropathy that does not result in amputation, or retinopathy or kidney failure. How much do you think your studies would price out the cost of these issues? Or how about CAD, atherosclerosis, thrombosis, and stroke? (Are you aware that 74% of diabetics over age 65 die of either heart attack or stroke?) Now there’s some really low/no cost medical conditions! They must be, as you seem to ignore them in your “analysis from an insurance company perspective.”

Or what about an increased risk of infections due to the negative impact of diabetes on the immune system. Not to mention issues with the skin - infections, blisters and otherwise.

I’m sure you’re also familiar with gastroparesis. You must think, however, that the release of food by the stomach hours later than normal causing a sudden increase in BG levels, is a trivial complication of managing diabetes with little to no cost issues attached.

It might also help to reference your studies for the dramatic increase in hospitalizations for HHNS. But I guess those are probably trivial costs as well.

The insurance issue is NOT what you are proposing, i.e., that there is no cost-benefit to using Afrezza versus RAAs and other insulins. In fact, there is a gargantuan cost effectiveness of Afrezza in a non-half-baked analysis. The insurance issue, rather, is trying to get the underwriters and medical staff to recognize Afrezza’s impact on the normalization of blood glucose levels, with fewer and shallower excursions, and the positive impact on lifestyle due to its delivery mechanism, thereby encouraging greater compliance."

Source would be helpful.

[roseylv]

Nov 15, 2017 17:02:18 GMT -5 @kastanes said:

Interesting comment regarding this issue

"As the former lead underwriter and CFO for a billion dollars of health insurance premiums, let me try to simplify it for you. Insurance companies are concerned about managing the overall costs of diabetes, not your two cherry-picked examples. (And I won’t even get into the artificial impact of rebates from PBMs.) Do you know what those costs include?

Try neuropathy that does not result in amputation, or retinopathy or kidney failure. How much do you think your studies would price out the cost of these issues? Or how about CAD, atherosclerosis, thrombosis, and stroke? (Are you aware that 74% of diabetics over age 65 die of either heart attack or stroke?) Now there’s some really low/no cost medical conditions! They must be, as you seem to ignore them in your “analysis from an insurance company perspective.”

Or what about an increased risk of infections due to the negative impact of diabetes on the immune system. Not to mention issues with the skin - infections, blisters and otherwise.

I’m sure you’re also familiar with gastroparesis. You must think, however, that the release of food by the stomach hours later than normal causing a sudden increase in BG levels, is a trivial complication of managing diabetes with little to no cost issues attached.

It might also help to reference your studies for the dramatic increase in hospitalizations for HHNS. But I guess those are probably trivial costs as well.

The insurance issue is NOT what you are proposing, i.e., that there is no cost-benefit to using Afrezza versus RAAs and other insulins. In fact, there is a gargantuan cost effectiveness of Afrezza in a non-half-baked analysis. The insurance issue, rather, is trying to get the underwriters and medical staff to recognize Afrezza’s impact on the normalization of blood glucose levels, with fewer and shallower excursions, and the positive impact on lifestyle due to its delivery mechanism, thereby encouraging greater compliance."

whomever "User 32796205" is wow, seems to have some serious firepower for the little ole Spencer.  Spencer ran back into his shell by removing his post.  That would have been his 25th of the year.  His handlers must want 30 before year end lol.

[mnkdfann]

Nov 15, 2017 17:02:18 GMT -5 @kastanes said:

Interesting comment regarding this issue

"The insurance issue is NOT what you are proposing, i.e., that there is no cost-benefit to using Afrezza versus RAAs and other insulins. In fact, there is a gargantuan cost effectiveness of Afrezza in a non-half-baked analysis. The insurance issue, rather, is trying to get the underwriters and medical staff to recognize Afrezza’s impact on the normalization of blood glucose levels, with fewer and shallower excursions, and the positive impact on lifestyle due to its delivery mechanism, thereby encouraging greater compliance."

If it is as clear and obvious as that guy says, then why don't all the plans that DO offer Afrezza have it listed as Tier 1 (or the equivalent)?

[Deleted]

Regardless of what we think of Osborne what he writes below is troubling:

"But here is the problem. I stated that insurance looks at MANY. I simply pointed to two very common discussion points that many mannkind investors are familiar with or often see.

The facts are simple.

1. The cost to treat on a monthly basis is higher, substantially higher, than other treatments.

2. Insurance companies have looked at this several was and STILL are not putting afrezza on good tiers or covering it at all."

[me]

Nov 15, 2017 20:02:45 GMT -5 mnkdfann said:

Nov 15, 2017 17:02:18 GMT -5 @kastanes said:

Interesting comment regarding this issue

"The insurance issue is NOT what you are proposing, i.e., that there is no cost-benefit to using Afrezza versus RAAs and other insulins. In fact, there is a gargantuan cost effectiveness of Afrezza in a non-half-baked analysis. The insurance issue, rather, is trying to get the underwriters and medical staff to recognize Afrezza’s impact on the normalization of blood glucose levels, with fewer and shallower excursions, and the positive impact on lifestyle due to its delivery mechanism, thereby encouraging greater compliance."

If it is as clear and obvious as that guy says, then why don't all the plans that DO offer Afrezza have it listed as Tier 1 (or the equivalent)?

Probably for the same reasons the medical community is still laboring under the current diabetes treatment protocols.  And as matt said above, it will take some "long and expensive studies" before insurance companies recognize (<= Actually, I think the more accurate term is "accept") the value of Afrezza versus RAAs and other insulins.