Insurance for your Adventure and Sportsmen's Business
1. Catastrophe Losses
Unprecedented frequency and severity continue to drive catastrophe losses caused by severe convective storms, tornadoes, hail, ﬂoods, wildﬁres, hurricanes and winter storms. Over the past ﬁve years, there have been 86 events with losses exceeding $1 billion each in the United States. In 2021, there were 20 such events, preceded by 22 events in 2020, which set a new annual record.1 The total insured losses from global natural disasters totaled $130 billion in 2021, with the United States accounting for $92 billion.2
2. Property Replacement Costs
The cost of construction has increased 28% over the last five years. In 2021, total nonresidential reconstruction costs increased 16.5%, led by a 51% increase in structural steel and a 22.7% increase in the cost of lumber. Similarly, machinery and equipment replacement costs have increased 8.5% over the same time frame. Having the right insurance coverage limits to meet rising replacement costs is vital in case a business suffers a loss.3
3. Skilled Labor Shortage
Construction project delays and material shortages brought on by the pandemic, coupled with supply chain breakdowns and the ongoing shortage of skilled workers, are increasing the amount of time and money it takes to rebuild. A recent survey from the Associated General Contractors of America found that 89% of contractor respondents reported difficulty in filling positions.4
4. Property Rate Need
While the industry has seen improvements in rate and terms and conditions for property exposures, the line’s profitability continues to be a challenge, resulting in a continued need for rate. This is driven by the industry’s evolving view of risk associated with years of elevated catastrophe events, rising attritional (non-catastrophic) weather losses and the increased frequency of large fires. Rate increases above loss trend are expected to continue throughout 2022.5
An estimated 75% of commercial businesses are underinsured by an average of 40% or more.6 With the cost of building materials and labor increasing at unprecedented rates due to inflation and supply chain issues, it is vital for property owners to have current and accurate insurance valuations to make sure limits will cover the costs to replace insured property.
Over the past five years, major catastrophes have driven reinsurance costs higher, and that trend is predicted to continue.7 Higher costs for both treaty and facultative reinsurance have an impact on rising property insurance rates.
Full Article: https://www.travelers.com/business-insurance/property/6-commercial-property-drivers-that-impact-insurance-costs
1Billion-Dollar Weather and Climate Disasters: Overview – NOAA
2Global insured nat cat losses total $130B in 2021: Aon
3U.S. Bureau of Labor Statistics, PPI Table 7 (January 2022)
4AGC, 2021 Workforce Survey Analysis
5Insurance rates expected to rise again this year
6Risky business: Right-size your insurance to save money, protect assets
7Reinsurance prices to continue rising in 2022, but pace to slow: Fitch
Get hunter education through MDC’s online format. All-online format may be completed by Missourians ages 16 and older.
JEFFERSON CITY, Mo. – The Missouri Department of Conservation (MDC) reminds Missourians ages 16 and older they may obtain their hunter-education certification through an all-online format. The online option allows Missourians ages 16 and older to complete their certification at their convenience at home during the COVID-19 pandemic. The all-online format is available at https://www.hunter-ed.com/missouri/.
Due to COVID-19 restrictions, in-person hunter-education skills sessions are limited in quantity and capacity. Skills sessions are necessary for anyone ages 11-15 to complete their hunter-education certification.
“For the safety of the public, staff, and volunteers, our instructors have had to make some changes to the frequency and size of our in-person offerings,” explained MDC Hunter Education and Shooting Range Coordinator Justin McGuire. “If you’re age 16 and up and need your hunter education certification for this fall, I’d encourage you to take advantage of the all-online course if possible. This will make more spots available for kids ages 11-15 who are required to attend an in-person skills session to complete their certification.”
The cost of the online certification is $19.95, which is paid to the online provider, not MDC. The all-online option requires the passing of a final exam but has no skills portion.
MDC notes that, unless selected for a managed hunt, youth under the age of 16 are not required to have hunter education certification to hunt with a firearm as long as they hunt in the immediate presence of an adult age 18 or older who is hunter education certified or age exempt (during youth season) and properly licensed (during regular seasons). Find more information about hunter education and certification requirements at https://short.mdc.mo.gov/Z45.
MDC also reminds the public that anyone age 16 or older that does not have their hunter education certification can purchase, along with their permit, the Apprentice Hunter Authorization which allows them to hunt with a firearm in the immediate presence of an adult age 18 or older who is hunter education certified or age exempt and properly licensed. The Apprentice Authorization is good for one permit year and hunters may purchase them twice (two permit years). The cost of the Authorization is $10. Find more information at https://short.mdc.mo.gov/ZiX.
Learn more about MDC hunter education and certification requirements online at http://www.mdc.mo.gov/huntereducation.
Missouri residents ages 16 and older have the option to complete their hunter-education certification at their convenience through MDC’s all-online format. Find more information at https://www.hunter-ed.com/missouri/.
Find this and other MDC media releases in our MDC online Newsroom.
1.) MVR/Background Checks:
a. Missouri only – This will provide you with Missouri only driving records for your employees. You can do this a few different ways:
i. Require the employee to get his/her driving record from the local license office ($2.82 + $2.00 processing fee). And deliver it to you.
ii. If you decide to get the MVR for the employee – Complete the Request from Driver License Record Holder form – https://dor.mo.gov/forms/4681.pdf (must include employee signature and notary signature) and pay the fee at the license office ($2.82 + $2.00 processing fee).
iii. By Mail or Fax – Submit the same form – https://dor.mo.gov/forms/4681.pdf and pay the fee (I believe it’s $2.00 +$.50/page).
iv. There is also a provision for requesting multiple driver records on a regular business (which is likely what you’ll be doing) – Request a security access code https://dor.mo.gov/forms/4678.pdf and establish an account. You would then dial in and receive the records by mail or fax. You’ll also need to complete the form with the employee signature as mentioned above.
v. Here is the link to the Driver records website – https://dor.mo.gov/drivers/records.php#record
b. Nationwide Search
i. IIX – Website is https://www.verisk.com/iix/ There is a $75 cost to set up an account. Phone number – 800-683-8553
ii. You can call or setup an account online.
iii. Cost is typically based on quantity. They may offer a discount if you use the MVR and background check service.
c. Nationwide Search
i. HireRight – Website is https://www.hireright.com/ Phone Number – 800-400-2761
ii. Call or setup an account online.
iii. Again, cost is typically based on quantity and if your using their software for other services.
For more information contact Scott Wilson, 636.537.5041 or firstname.lastname@example.org
– The Workers Compensation Perspective, shared info from Brad Young with Harris Dowell Fisher & Young L.C.
I have been contacted by multiple employers and insurance carriers over the past week, asking how a potential coronavirus outbreak would be handled from a workers compensation perspective in Missouri and Illinois.
Let me first say this: the medical evidence related to the coronavirus is very clear – – there is not currently any widespread outbreak in the United States, most people who are infected make a full recovery, it primarily affects individuals over the age of 60, but there is about a 2% fatality rate.
From a workers compensation perspective, I see 2 categories of employees – – those who have tested positive and those who have not tested positive but may be quarantined or working from home.
THOSE WHO TEST POSITIVE
In both Missouri and Illinois, the standard for compensability would be similar – – the employment must place the claimant at a greater risk to contract the disease than the claimant would otherwise be exposed as a member of the general public. This can be best explained with the following example:
1. If the coronavirus breaks out generally in a community, and a person at Acme company happens to get it, claimant would have to prove that the workplace placed him/her at a greater risk of contracting the virus. If the virus is in the general community, this would be difficult to prove.
2. If the coronavirus is not in a given community to any significant degree, but multiple people at Acme company contract the virus, then the claimant MAY be able to show that the employment placed the claimant at a greater risk to contract the virus. In this scenario, the condition COULD be compensable depending on the specific evidence.
If a claimant can meet the “greater risk” threshold, then the Employer/Insurer would be liable for:
• Medical benefits
• TTD for time missed from work
• No PPD if, like the vast majority of coronavirus cases, the claimant eventually makes a full recovery
• Death benefits if the worst-case scenario happens (currently around a 2% fatality rate)
FOR THOSE WHO ARE QUARANTINED AT HOME
If workers are sent home because of possible exposure, there would be no entitlement to workers compensation benefits unless they are actually infected. Workers who are sent home and who do not test positive for anything have no entitlement to workers compensation benefits because they have not been injured.
This is similar to needle-stick cases where claimants are afraid that they might develop AIDS. If nothing develops, there is no entitlement to benefits.
If a quarantined worker eventually does test positive, the analysis in the section above would apply.
Please understand that I have left out a lot of analysis for the sake of brevity (i.e. psych claims). If you want to discuss this in greater detail, just let me know.
Bradley (Brad) Young
Harris Dowell Fisher & Young L.C.
15400 South Outer 40, Suite 202, Chesterfield, MO 63017
Office: (636) 532-0300 | Cell: (314) 406-3095 | Fax: (636) 532-0246
Email: email@example.com Website: www.harrisdowell.com
Global insurers face quiet strain from hacker ransom demands
These hackers use malicious programs known as ransomware to take down systems controlling everything from supply chains to payments to manufacturing. The hackers have grown more sophisticated during the past year, cybersecurity experts say, shifting from individuals and mom-and-pop operations to larger companies that can afford bigger ransoms.
The effort, known in the cybersecurity industry as “big game hunting,” has been paying off for hackers. It has also been hurting insurers that provide cyber coverage for victims, which are often mid-sized companies desperate to get their systems restored and running quickly.
“They’re large enough to be worth extorting but not large enough to have sufficient network protections to defeat the ransomware,” said Brad Gow, global cyber product leader for insurer Sompo International (8630.T).
Sompo has been fielding a spate of claims related to a ransomware strain known as “Ryuk,” Gow said. He described the victims as companies with annual revenue between $500 million and $1 billion.
The number of attacks and size of ransom demands have been soaring.
Businesses detected 365% more ransomware attacks in the second quarter than they did a year earlier, according to Malwarebytes, which sells cybersecurity software. The average ransom nearly tripled, to $36,295, from $12,762 between the first and second quarters of this year, according to Coveware, a firm that helps negotiate and facilitate cyber-ransom payments.
Criminals who dispatched the Ryuk strain have demanded as much as $5 million in bitcoin, the Federal Bureau of Investigation said in May.
“We’ve seen an unprecedented amount of ransomware attacks in 2019,” said Eireann Leverett, a senior risk researcher at the University of Cambridge Centre for Risk Studies. The size of losses for those attacks poses a serious risk to the business, Leverett said.
Companies that have cyber insurance are often covered for a variety of expenses. They include: data recovery, legal liabilities for exposing sensitive customer information, negotiators fluent in hackers’ native languages and the ultimate ransom payments.
Cyber experts say the criminals launching ransomware against companies are organized gangs in Russia and eastern Europe, or hackers sponsored by foreign governments. Insurers sometimes have restrictions in their policies to avoid covering attacks by nations, but it can be difficult to know for sure what type of criminal is launching an attack.
Insurers interviewed by Reuters said ransomware attacks are accelerating but declined to say how much they have paid in total claims.
Lloyd’s of London insurer Beazley BEZG.L expects to handle double-to-triple the number of ransomware incidents in 2019 as it did last year, including at least another 800 claims by year-end, according to Katherine Keefe, Beazley’s global head of breach response services.
Ransomware incidents during the third quarter increased 37% over the prior year quarter, Beazley said.
Similarly, Chubb Ltd (CB.BN) had already responded to the same number of ransomware events by June of this year as it did for all of 2018, said Michael Tanenbaum, its head of cyber for North America.
The average Ryuk ransomware attack claim from large companies is roughly $2 million, said Wade Chmielinski, a cyber consultant for commercial property insurer FM Global. Claims from smaller companies are typically between $150,000 and $250,000. FM Global does not pay for ransoms, he said.
One prominent attack in March against Norwegian aluminum maker Norsk Hydro (NHY.OL) turned out to be a lot more expensive.
Norsk Hydro is among the few public examples available of ransomware striking a business, because publicizing such events can invite more attacks, experts said.
After its systems were paralyzed by the LockerGoga strain of ransomware, Hydro experienced $60.1 million to $71.1 million (550 million to 650 million Norwegian crowns) in related losses during the first half of 2019, the company said in a filing on Wednesday.
In March, Norsk Hydro identified American International Group Inc (AIG.N) as its lead cyber insurer. An AIG spokesman declined comment.
Norsk received a $3.6 million (33 million Norwegian crowns) insurance payout during the quarter and will report additional payouts when “deemed virtually certain,” the company said on Wednesday.
Global insurers collected $7 billion to $8 billion in cyber-insurance premiums during 2018, up about 13% from 2017, according to ratings agency AM Best.
But insurers are grappling with pricing as ransomware attacks become more common. Many of those attacks occur in the dark, making their frequency hard to know or how severe losses are. Although a simple ransom payment is often the cheapest, easiest solution, it also emboldens hackers, said Robert Hudock, a lawyer in Washington who advises clients on dealing with cyber attacks.
“It’s going to be a hard problem to solve,” he said, “if people keep paying the ransoms and the systems keep getting compromised.”
For the common industries targeted by ransomware and full article:
Interesting read I share, despite the political side one favors or their opinion(s) on big business or free for all. Makes one think and see perception of reality of what is and is unfolding in America.
Quinn Nystrom is carrying the thing that saves her life in two large brown bags. The 32-year-old from Minnesota is one of a busload of diabetics who have made the journey from the US to a pharmacy in Canada to stock up on vital supplies of the drug insulin. Only minutes’ drive from the border, they are paying a tenth of what they would at home.
Outside the pharmacy in Windsor, Ontario, a crowd has gathered to show solidarity. Nystrom, who is wearing a grey T-shirt bearing the words “Insulin is a human right”, launches into an impromptu speech. The diabetes activist seethes as she tells them how, as a consequence of soaring drug prices, one in four American diabetics now rations their use of insulin.
“We know that our purchase today in this Canadian pharmacy was not a charity. Right?” she tells the onlookers. “We know that [the drugmakers] made a profit, though far less profit than they do from Americans. But what they’re doing to Americans is price-gouging us and they are holding us hostage. And people are dying. People are being forced to go to emergency rooms. People are having their legs amputated. They are going blind. They are having heart disease, liver damage. When does it stop?”
Inside the pharmacy, a white-haired man in a suit tells people he wants to make it stop. Bernie Sanders, US senator from Vermont and Democratic presidential candidate, has helped organize the trip with the activist group Insulin4All to highlight patients’ suffering.
He listens intently as a mother tells him how she shares one child’s insulin between her three diabetic kids (type 1 diabetes has a genetic element). Another woman tells him how she spent her twenties in and out of intensive care because of complications from rationing insulin.
Democratic presidential candidate Bernie Sanders addresses the crowd at an Insulin4All ‘caravan’ to Canada in July. Insulin can be bought for one-tenth of its US price in Canada
The sky-high price of many drugs — and the increasing contribution expected even from insured patients — is a potent subject ahead of the 2020 US election. Sixty-two per cent of voters say healthcare is the most or the second most important issue for the future of America.
President Donald Trump knows this: at the last election, he pledged to bring down the cost of prescriptions. His opponents, too, see an opportunity to propose more ambitious plans as, three years into his term, Trump has not yet helped patients at the pharmacy counter.
Increasingly, politicians on both sides of the aisle are looking for solutions — to Canada and beyond. Patient “caravans” such as Insulin4All’s — the medical equivalent of a booze cruise — are currently allowed to bring back a three-month supply for personal use. But the president and a number of other candidates have proposed legalizing mass importation from Canada, while some are also looking to peg US prices to those in other developed countries.
Sanders’s hair dances in the breeze as he begins his address to the gathering outside the pharmacy. He is adamant he would go further than stopgap measures that rely on pricing policies in other countries. If he becomes president, he would instruct his attorney-general to use antitrust laws to break up industry monopolies and end price fixing.
“Three huge drug companies, which made $14.5bn in profit last year, control 90 per cent of the insulin market,” he says, referring to insulin makers Eli Lilly, Sanofi and Novo Nordisk. “And as I think the patients here will tell you, it is an amazing coincidence that, year after year, prices go up and up and up at the same level for the same companies. So what you do is you throw these people in jail if they engage in price fixing.”
Drugmakers — often forgotten in countries where medicines are cheap — loom large in the lives of Americans like those on the trip. Kathy Segos from Indiana describes how their decisions have dictated her life. The insulin she buys for her son Hunter costs her $1,200 a month (until the family reach their “deductible”, an annual limit on out-of-pocket costs, after which the insurance pays the rest).
It is her household’s single-biggest expense — prioritized above everything else. She says she has sat in the dark when her electricity was cut off because she chose to pay for insulin to keep Hunter alive.
When Hunter discovered this, he tried to ration his insulin, affecting his performance at college. “It was pretty scary to know that your son felt that he was a burden to you,” says Segos, tears welling. “I will sacrifice everything I have to keep my child alive. Yet my son, through no fault of his own, his pancreas doesn’t work.”
How politicians attempt to limit drug prices will dictate the way Segos — and many others — vote next year. “I grew up very conservative, a very straight-ticket GOP Republican girl. But when Hunter was diagnosed, my husband and I both changed our views a little bit,” she says. “I vote strictly based on healthcare: how are you going to fix this problem? Because he’s gonna be 23 next month, and he’s got his whole life ahead of him.”
Almost a quarter of American patients have trouble affording their prescriptions, according to a survey by health research institute the Kaiser Family Foundation. Some 43 per cent of US adults under 65 are on “high-deductible” plans, so their insurance only kicks in after they have spent thousands of dollars.
Drug prices have soared: America spent $334bn on prescription drugs in 2017, up 41 per cent from 10 years ago, according to National Health Expenditure data. The opaque US health system makes it hard to draw drug-by-drug comparisons with prices abroad. But the OECD estimates that the US spent about 47 per cent more per capita on prescription drugs than Canada in 2018 and 160 per cent more than the UK.
Some of the worst instances of price hikes have been well publicized, such as when so-called “pharma bro” Martin Shkreli increased the price of an Aids and cancer drug from $13.50 to $750 per pill. But more patients are affected by frequent smaller rises from big pharmaceutical companies. In the first quarter of this year, thousands of drugs rose by an average of 10 per cent, according to data compiled by RX Savings Solutions, which sells software that tracks pharmacy prices.
All over the world, drugmakers are granted time-limited monopolies — in the form of patents — to encourage innovation. But America is one of the only countries that does not combine this carrot with the stick of price controls.
The US government’s refusal to negotiate prices has contributed to spiraling healthcare costs which, said billionaire investor Warren Buffett last year, act “as a hungry tapeworm on the American economy”. Medical bills are the primary reason why Americans go bankrupt. Employers foot much of the bill for the majority of health-insurance plans for working-age adults, creating a huge cost for business.
In February, Congress called in executives from seven of the world’s largest pharmaceutical companies and asked them: why do drugs here cost so much? The drugmakers’ answer is that America is carrying the cost of research and development for the rest of the world. They argue that if Americans stopped paying such high prices for drugs, investment in innovative treatments would fall. President Trump agrees with this argument, in line with his “America first” narrative, which sees other countries as guilty of freeloading.
For the patients on the trip, the notion is galling: insulin was discovered 100 years ago, by scientists in Canada who sold the patent to the University of Toronto for just $1. The medication has been improved since then but there seems to have been no major innovation to justify tripling the list price for insulin, as happened in the US between 2002 and 2013.
Other drugs are more innovative — and their development undeniably expensive. According to Tufts University, the average is $2.6bn per drug, up 145 per cent in the past 10 years. Most drug candidates fail; those that do make it to later stages must go through expensive clinical trials. In support of the drug companies’ argument, one 2015 study found that for every extra $2.5bn a company made in sales, it produced one extra drug.
When the pharma executives testified before Congress earlier this year, they were also asked what kept them up at night. Many said it was the concern that the market would no longer allow them to make risky bets that could result in medicines that save lives. Kenneth Frazier, CEO of Merck, said: “What keeps me up . . . is the concern that we will not have a viable, predictable market that will allow people to continue to put the very large amounts of money up at risk for a very long period of time, in an attempt to find solutions to some of the hardest problems like Alzheimer’s.”
Discovering new drugs is getting harder, added Jennifer Taubert, executive vice-president at Janssen Pharmaceuticals, the drugmaking division of J&J. “The easy diseases have largely been solved. It gets harder and harder as we go after new treatments for ever more challenging diseases.”
Yet the biggest single funder of innovation in the US remains the government. In 2017, the US National Institutes of Health spent more than $32bn on research, compared with an estimated $71bn from all the members of PhRMA, the major pharmaceutical industry lobbying association.
One recent controversy concerned the high price of Truvada, an HIV-prevention drug, which many claim was developed largely as a result of taxpayer-funded investment. (The company, Gilead, denies this.) The case has led to questions about how the government can ensure that its research is used to create affordable medicines.
Andrew Witty, the former chief executive of GlaxoSmithKline, said last year that the “$1bn-plus” cost of developing a single drug was “one of the great myths of the industry” because it is an average of the money spent on drugs, including those that ultimately fail.
Ken Kaitin, director of Tufts Center for the Study of Drug Development, says that pharma companies do not factor in what they spent developing a drug when they come to price it. “In the vast majority of cases, the price of the drug is a reflection of value, the competitive landscape and the willingness of payers: what the market will bear,” he says.
Missing from the US landscape are authorities such as the National Institute for Health and Care Excellence (Nice) in the UK or the Patented Medicine Prices Review Board in Canada, which negotiate prices and consider value for money. By contrast, once the US Food and Drug Administration has approved a drug as safe and effective, insurers are faced with a simple decision: to pay up or not. They fear that if they do not, their business will be damaged by patients leaving their plans.
Where else is the money from high drug prices going? Major pharma companies make about twice as much in profit each quarter as they spend on R&D. And most spend significantly more on sales and marketing — particularly in the US, where TV advertising is allowed.
The industry is also spending more money on M&A and share buybacks. Increasingly, big pharma is outsourcing innovation to smaller biotechs, then buying the companies before they have a product on the market and using their own commercial machines to sell the drugs widely.
When they are not buying companies, they are often buying back shares. Unlike dividends, buybacks boost earnings per share, helping executives meet targets and bag bonuses. From 2006 to 2015, 18 major pharma companies spent $261bn on buying back shares, 57 per cent of what they spent on R&D, according to William Lazonick, a professor of economics at the University of Massachusetts Lowell.
He says the drug companies and their lobbyists “are talking out of both sides of their mouth”. “Either the purpose of a drug company and the people managing it is to take the profits and reinvest them . . . to do drug development. That I have no problem with,” he says. “Or it is to distribute money to shareholders, which is in fact what they are doing.”
Inside Windsor’s Olde Walkerville pharmacy, where traditional brown medicine bottles line the shelves, 30-year-old Stephanie Odette from Michigan tells Sanders how it felt when she rationed insulin. “It’s like the world’s worst hangover. Except you didn’t drink anything,” she half-laughs.
Diabetic ketoacidosis is so life-threatening that it has landed Odette in intensive care 74 times in 10 years. Interrupting, Sanders sees the opportunity to highlight the “dysfunctionality” of the US healthcare system. “You’ve been forced to go to the hospital 74 times. I imagine at huge cost to the system,” he says. “How much money we spend on emergency-room care but somehow we can’t have affordable medicine in the United States.”
The US spends twice as much on healthcare per capita than economists would expect based on its income — and yet, it is ranked only 29th on a list of countries where most people survive treatable ailments, with Canada and the UK above it and Iceland at the top.
Darius Lakdawalla, a health economist at the University of Southern California, says that in terms of pharma spending, the argument that smaller countries are “freeloading” holds a certain amount of weight; as the largest market in the world, the US’s high prices inevitably subsidize some global innovation. “Let’s say we are talking about Belgium, as an example of a wealthy country, where there are relatively small market quantities. Drug manufacturers don’t have that much to lose if Belgium demands a lower price.”
But he calls the US system a “big hot mess”, where no one is incentivized to pay true value for money. “Pharma in this market can charge prices that are not at all aligned to value. They are all bundled together for consumers — and moreover, it’s often not the consumer buying, but the employer.”
Pharmaceutical companies point the finger at the pharmacy benefit managers who work for insurers. Each insurer has a list that shows which drugs it will pay for and in what order. Pharma companies want to be at the top of the list, so they pay rebates to PBMs to ensure good placements. The money is split with the insurers.
The drugmakers argue that rebates are the problem. They say that list prices look high but are rarely what an insurer or patient pays. People do pay list price, however, if they are uninsured, and they pay a proportion of it if their plan has co-insurance, requiring them to pay, for example, 20 per cent of prescription costs.
On the journey across the border, patients who have never met before share similar war stories of battling with insurance companies. Hunter Segos’s insurer refused to cover his insulin when he used a discount card the pharmacist had given him to try to make it cheaper.
Odette’s husband’s insurer will not pay for the type of insulin that her doctor says she needs, so she has to take other medicines to compensate for side effects. “I can get the insulin I was supposed to be on for three years for the first time today,” she says.
Insulin is unusual as it can be bought in Canada without a prescription. For every other drug, a US patient must get a Canadian prescription, either from a US doctor who is also licensed in Canada, which some are along the border, or a Canadian doctor who co-signs prescriptions.
President Trump is among the supporters of capping drug prices by outsourcing. He has said he is working on an executive order where the US would get the best prices in the world because of a “most favored nation” status, as well as a more thoroughly outlined proposal to create an “international price index” for some drugs covered by Medicare. Sanders has written a bill to benchmark the prices of drugs to those abroad, even if they are paid for by private insurance.
Supporters of more importation from Canada say it would cut costs and stop bad actors such as Shkreli abusing monopolies. Gabriel Levitt, president of pharmacychecker.com, which helps patients verify that foreign pharmacies are licensed, says: “Drug companies and their backers in Congress will say importation is really importing drug-price controls but it’s much more than that: it is a way to crack open the market.”
There are downsides to either importing or pegging the price of drugs, especially for the other countries, where drugmakers seem unlikely to ship extra supplies. “I almost can’t comprehend what would happen if it actually got passed. It would be chaos and probably global chaos,” says Katie Gudiksen, a senior health policy researcher at UC Hastings in San Francisco.
Canadian authorities say they oppose any US plan that could cause shortages or a rise in costs in a country with only a tenth of the population of the US. A recent study suggested that any such measure is only likely to help US consumers modestly, while substantially hurting those in Canada. (Pharmaceutical companies are likely to be more aggressive in negotiations with smaller countries, if they will end up affecting prices in their biggest market.)
For Nystrom, mass importation from Canada would be a “cop-out”. “I don’t understand why we don’t force the drug companies to lower list prices or set up, like Canada did, a patented-medicine review board, to protect our citizens,” she says.
Such a revolution in US healthcare would be fiercely resisted. Drug prices have only risen since the last time Sanders led a trip to buy drugs in Canada, for women with breast cancer 20 years ago. Many of the diabetic patients on the trip — not all of them Sanders supporters — admired how long he has been fighting for patients. Now they are glad that high prices are finally an important electoral issue.
Focusing on healthcare helped the Democrats win back the House of Representatives at the midterms last year, and Democratic speaker Nancy Pelosi aims to capitalize by pushing through a bill to lower drug prices this autumn. Her plan might be scuppered — or supported — by the president, who not only wants to be seen to be cutting prices, but also wants to make sure he gets the credit.
While Trump wants to tackle high drug prices in isolation, Sanders has a much more radical plan for “Medicare-for-all” — the expansion to the rest of the population of the government-backed plan for seniors. Elizabeth Warren, another senator and presidential candidate, supports this. Warren also has a bill that would allow the government to manufacture generic drugs if faced with little or no competition, critical shortages or exorbitant prices.
Even more moderate Democratic party presidential candidates such as former vice-president Joe Biden, senator Amy Klobuchar and mayor Pete Buttigieg have railed against high drug prices. Both Biden and Klobuchar want to enable Medicare to negotiate drug prices — which, for many Americans, has long stunk of socialism.
In 1961, long before he became president, actor Ronald Reagan was hired by the American Medical Association to argue against “socialized medicine” in a radio recording, saying it opened the door for federal programmes invading freedom and, eventually, socialism.
“One of the traditional methods of imposing statism or socialism on a people has been by way of medicine,” he said. In contrast, having health insurance was seen as a matter of individual responsibility, says Nancy Tomes, a professor of history at Stony Brook University: “[The idea was] if you really had lived a good life, had some skills that the world values, you would never end up being in this position where you can’t afford healthcare.”
Fear of socialized healthcare remains a huge obstacle for US politicians who want to create a system where drug prices are negotiated — and where some drugs are not covered.
“In this country, we’ve used the inflammatory term ‘death panels’ to hamper, frankly, the discussion that needs to happen with regard to drug pricing,” says Andrew Lo, a professor of finance at MIT Sloan School of Management. The phrase was coined by former Republican vice-presidential candidate Sarah Palin a decade ago in opposition to Barack Obama’s Affordable Care Act. “The America I know and love is not one in which my parents or my baby with Down’s syndrome will have to stand in front of Obama’s ‘death panel’ so his bureaucrats can decide . . . whether they are worthy of health care,” Palin wrote on Facebook.
Public health systems outside the US do refuse to pay for some drugs. In some cases, this can be heartbreaking. For example, English patients with cystic fibrosis have been waiting for years for a deal between Nice and Vertex, a biotech company with a life-changing treatment with a US list price of $272,000 (it is available privately). But, sometimes, it can just mean opting for cheaper alternatives.
One analysis found that, from 2011 to 2016, Medicare spent $26bn on 134 drugs that were not covered by at least one of Australia, Canada or the UK, because they were not seen as being good value. “There is one silver bullet to fix all of this: do what the Canadians and Europeans do,” says Oner Tulum, an academic who studies the “financialisation” of the pharma industry.
But America’s cultural fear is still quietly reinforced by lobbying money from the healthcare and pharmaceutical industries. PhRMA calls price controls “egregious” and stresses how Americans get access to new medicines first. As politicians gear up to reform drug prices, pharma spending on lobbying hit an all-time high in the first half of 2019.
Two days after returning from Canada, Sanders took to the stage in Detroit to debate with other Democratic presidential candidates. He described the trip as a way to highlight the prices being charged by the “crooks who run the pharmaceutical industry in America today”.
For Sanders, drugmakers are also a symbol of the abuse of corporate power. “It’s not just the price-fixing and the corruption and the greed of the pharmaceutical industry. It’s what’s going on in the fossil-fuel industry. It’s what’s going on in Wall Street. It’s what’s going on with the prison industrial complex,” he railed.
Suerie Moon, a specialist in global health and drug pricing, says US companies no longer feel bound by “informal social norms” on prices, so they may continue to raise prices as long as they see their peers doing so. “We see some public outrage, political clans making noises. But, frankly, we haven’t seen regulation, so it is perfectly rational to say, ‘Well, if they are not regulating, why not?’” she says.
If politicians fail to go beyond slaps on the wrist to transform the system, Odette is considering a radical move of her own. She has put off having a baby because she’s scared of the costs of a high-risk pregnancy — and the extra bills if the baby inherits her type 1 diabetes. Her husband’s family came from Canada in the 1950s and he has dual citizenship. She fears it would break his grandparents’ hearts if they knew their descendants had moved back, nevertheless the couple are considering emigrating.
If they moved, Odette and her husband would not be far from their family outside Detroit — but it would be a different world for their health and, therefore, their finances. “You walk on the Detroit River and you look across the river and you know you are so close. Things could be so much better if people weren’t so greedy,” she sighs. “That your life doesn’t matter enough to them to not be so greedy is the hard part.”
Hannah Kuchler – Financial Times – Financial Times
Sep 20, 2019, 8:25am EDT
Editor’s note: This story is available as a result of a content partnership with Financial Times. Subscribers will see stories like this every day on our website (and in our daily emails) as an added value to your subscription.
Healthiest Employers 2019 – 250-499 employees
Crane Agency’s wellness program isn’t trying to drastically change your life.
It just wants you to walk a few more steps each day, take a few more coffee breaks and make a few more friends at the office.
Over the years, the $41 million insurance agency has won several awards for its wellness and engagement program. Instead of promoting intense fitness goals, the program hosts various social events that encourage its 269 employees (258 locally) to take small steps toward improving their mental and physical well-being.
“It’s not grilling into them things that they have to do on a daily basis,” said Margot Gruenewald, director of human resources. “Rather, it’s trying to bring people together to do a wide plethora of things that help the mind, body and soul.”
The program encourages individual health (flu shots, biometric screenings), charitable giving (annual volunteering events) and social engagement (last summer, employees teamed up to explore St. Louis in a companywide scavenger hunt). Recently, Crane Agency brought massage chairs into the office so everyone could take a 15-minute massage break. Employees active with the wellness program can win gift cards and get matching payments on their gym memberships.
HR Assistant Lisa Wilke, who organizes the wellness program, said the social events indirectly improve people’s health. She has seen employees bond through the events, then form groups to take walks or go to the gym together.
Gruenewald knows the process from experience. When she served in the Marines, she could easily run 10 miles a day. But staying fit became harder after she joined corporate life. A self-proclaimed workaholic, Gruenewald spent most of her 17 years at Crane Agency glued to her desk. She would enter the office before 9 a.m. and not leave until 6, 7 or 8 p.m. — sometimes much later.
This April, Gruenewald began consistently working out after encouragement from Wilke.
“For the last four months, I have gotten out of the routine of just sitting here at my desk, working and stressing out, and I’ve been joining people and going to the gym with them, just to get in the right frame of mind,” she said.
The incremental changes have paid off — Gruenewald has lost 10 pounds, and now hits the gym two to three times a week.
“No, I never dropped 30 pounds; no, I don’t look like Angelina Jolie,” she said. “But I can tell you that my attitude’s better, I think my work is better, and I’ve gotten to know my population a little bit more, because before I was not getting out of my office.”
Wilke said this kind of social engagement is what the program is all about.
“I think that sometimes mental well-being and social well-being get overlooked when you’re only focusing on the physical,” she said. “And while we do want to promote that, you need to look at the whole person.”
How do you keep your employees engaged in the wellness initiatives? “We keep metrics on the number of participants we have for our activities, and if we have good participation, we continue to do those. We constantly do surveys and listen to informal employee feedback. Then we apply that to what we decide to do the following year in terms of engagement and wellness activities.” – Lisa Wilke, Crane Agency
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