Docs Underpaid for Giving Kids COVID Vax; Pricey Rapid Tests; Cancer Drug Profits

Welcome to the latest edition of Investigative Roundup, highlighting some of the best investigative reporting on healthcare each week.

Insurer Undercuts Kids COVID Vax Payout

UnitedHealthcare, the nation’s largest insurance company, is paying half or less the rate of other insurers for administering pediatric COVID vaccines, doctors in three states told Insider.

“By vaccinating kids, we will get us out of this pandemic. It’s a shame to have an insurance company stand in the way of that,” Susan Sirota, MD, a pediatrician in Illinois, told Insider.

Medicare set a precedent for other insurers with an approximate $40 payout per injection to administer vaccines to adults. UnitedHealthcare, on the other hand, is reportedly paying $20 or less for doctors to administer the Pfizer/BioNTech vaccine to kids, the only one authorized for children ages 12 and up.

Pediatric practices get vaccines free of cost from the federal government, Insider reported, but insurers pay doctors to give the injections, which includes storing them, setting up vaccination clinics, hiring staff, and reporting back to the government.

Doctors told Insider they were concerned that the loss in payment would eventually discourage doctors from giving the shots, ultimately hindering efforts to stem the spread of COVID-19.

Rapid COVID Tests Costlier in U.S.

Over-the-counter rapid COVID tests are still too expensive for regular use by Americans, Kaiser Health News reported. Despite the cost, however, retailers across the country are selling out of tests that cost a fraction of the price or are provided for free in other countries.

“If we’re talking about people testing their kids every day going to school, for many families, the current costs are a real burden,” Michael Greeley, a co-founder of a health tech venture capital firm called Flare Capital Partners, told KHN.

The most affordable COVID rapid antigen test available appears to be Abbott Laboratories’ BinaxNOW, which comes in a two-pack for $23.99 at CVS, making each test about $12 — but customers are limited to six per order. In India, these tests cost about $3.50 and in Germany, the U.K., and Canada they’re less than $1 or completely free, KHN reported.

President Biden pledged last week to make 280 million rapid COVID tests available at a lower rate than current retail offerings, and for free to those covered by Medicaid. But as one Harvard assistant professor of epidemiology noted on Twitter, this would still amount to “less than one test per person over the course of a year,” while experts encourage people to test themselves much more frequently.

Reasons for the lack of low-cost tests include a lengthy FDA review process, a lack of competition among very few rapid test manufacturers, delays in distribution of federal funding to buy tests in bulk, and companies that can, according to Rep. Kim Schrier (D-Wash.), make more money selling fewer high-cost tests than manufacturing many low-cost tests.

340B Hospitals Cash in on Oncology Drugs

Non-profit hospitals that serve the uninsured and low-income patients actually profit significantly from markups on drugs, according to a new report from Community Oncology Alliance (COA). These hospitals participate in the federal 340B Drug Pricing Program, which was started to help hospitals serving vulnerable communities save money on drug costs.

Hospitals participating in the program can buy outpatient drugs at a discounted rate from pharmaceutical manufacturers. This is meant to free up funds for these hospitals to pass the savings along to their patients and to expand programs and care.

But according to a press release from COA about the report — which was prepared by well-known industry analyst Ronny Gal, PhD, of Moto Bioadvisors — 340B hospitals “charge an average of 3.8 times their acquisition costs for pricey cancer drugs and do not provide lower prices for uninsured or cash paying customers.”

Hospitals also charged commercial insurers more than Medicare. In one example, a 340B hospital would buy a years’ supply of an expensive multiple myeloma drug for $76,320 and get $90,579 from Medicare to reimburse them, leaving $14,259 meant for them to administer the drug. The same hospital might buy the drug for the same price but then charge a commercial insurance $290,016 and make a much larger profit — $213,696 for one patient.

The report took advantage of new federal drug pricing transparency regulations that require hospitals to disclose pricing data, but found that only 11% of 340B hospitals had complied.