Tag Archives: health care

UnitedHealth sees further losses for Obamacare insurance

The logo of Down Jones Industrial Average stock market index listed company UnitedHealthcare is shown in Cypress, California

By Caroline Humer

(Reuters) – UnitedHealth Group Inc is still losing money on the individual insurance business created under U.S. President Barack Obama’s national healthcare reform law due to customers’ high medical costs, the company said on Tuesday.

The largest U.S. health insurer said that it was booking $200 million in losses in the second quarter to cover higher-than-anticipated use of medical services by customers this year. UnitedHealth and other insurers have blamed those costs for their losses from the exchange business.

The company said it expected the program, often called Obamacare, to reduce 2016 earnings by about $850 million, up from $475 million in 2015.

Next year, it will exit most of the two dozen states where it sells individual insurance on the exchanges but still has plans to sell in Nevada, New York and Virginia.

“We do not expect any meaningful financial exposure on 2017 business from the three or fewer exchange markets where we currently plan to remain,” Chief Executive Officer Stephen Hemsley said on a conference call with analysts to discuss second-quarter financial results.

Individual exchange customers this year have more severe chronic conditions, such as diabetes, chronic obstructive pulmonary disease and HIV, and attrition has been lower than expected, UnitedHealth said. It expects to end 2016 with 750,000 exchange members.

The company said its other businesses, including pharmacy benefit management and the technology and consulting divisions, were strong, and it reported higher-than-expected earnings and revenue for the second quarter.

UnitedHealth, which also sells employer-based insurance as well as Medicare and Medicaid, raised the low end of its full-year profit outlook to $7.80 per share from $7.75 and kept the high end at $7.95.

Shares of UnitedHealth were up 0.5 percent at $141.42. It is the only large insurer not involved in any of the major consolidation deals under review by antitrust regulators.

Other insurers were off slightly on the announcement but lost ground after a report that antitrust regulators were planning to block their deals. Aetna Inc was off 3.6 percent at $114.90, while Anthem Inc fell 2.9 percent to $131.11. Cigna Corp was down 2.3 percent at $130.02 and Humana Inc gave up 5.3 percent to $151.10.

Mizuho analyst Sheryl Skolnick said UnitedHealth’s Obamacare business could further weigh on 2016 profit, given that more members have stayed on than expected and will have higher expenses during the second half.

“They have tried as much as they can… to take as much of the losses as they can,” Skolnick said.

Revenue from the company’s Optum business, which manages drug benefits and offers healthcare data analytics services, rose 51.5 percent to $20.6 billion from a year earlier.

Net earnings rose to $1.75 billion, or $1.81 per share, from $1.59 billion, or $1.64 per share, a year earlier.

(Reporting by Caroline Humer in New York and Amrutha Penumudi in Bengaluru; Editing by Lisa Von Ahn)

American’s pay highest cancer drug prices in the the world

Four-year-old Niuniu sits on a bench while his mother pays his medical bills at Shanghai Children's Hospital

By Deena Beasley

CHICAGO (Reuters) – Americans pay the highest prices in the world for cancer drugs, but the treatments are least affordable in lower income countries, according to the results of a new study released on Monday.

The study of cancer drug prices in seven countries, which did not take into account discounts or rebates to list prices, was presented at the annual meeting of the American Society of Clinical Oncology in Chicago.

The lowest drug prices were found in India and South Africa. But after calculating price as a percentage of wealth adjusted for the cost of living, cancer drugs appeared to be least affordable in India and China.

Researchers at Rabin Medical Center in Petah-Tikvah, Israel, calculated monthly drug doses for 15 generic and eight brand-name cancer drugs used to treat a wide range of cancer types and stages. List prices in Australia, China, India, South Africa, the United Kingdom, Israel, and the United States were obtained from government websites.

The high prices commanded by modern cancer drugs are generating increased resistance and demands for price discounts from politicians, health care providers, insurers, patients and some doctors.

Drug companies argue that they need to make a profit to pay for the billions of dollars needed for drug research. Many companies also have extensive low-cost or free access schemes for patients who cannot afford their medicines.

The study researchers used gross domestic product and cost of living statistics from the International Monetary Fund to estimate drug price affordability.

Median monthly prices for branded drugs ranged from $1,515 in India to $8,694 in the United States. For generics, median prices were highest in the United States, at $654, and lowest in South Africa, $120, and India, $159.

In terms of ability to pay, the study found cancer drugs to be most affordable in Australia, where generic drugs were priced at 3 percent of “domestic product per capita at purchasing power parity” and patented drugs were 71 percent of the same measure.

In China, the study found generic drug prices were 48 percent and patented drugs were 288 percent of wealth adjusted for the cost of living.

In India, the cost of generics was 33 percent of that measure, while patented drugs were 313 percent.

In the United States, generics were found to be priced at 14 percent of wealth adjusted for the cost of living, and patented cancer drugs were 192 percent of the same measure.

The study did not take into account that drug costs are paid by either the government, health insurers, or patients themselves, depending on each country’s health insurance system.

Worldwide spending on cancer medicines will exceed $150 billion by 2020, driven by the emergence of expensive new therapies that help the immune system to attack tumors, according to a forecast earlier this year from IMS Health Holdings <IMS.N>.

(Reporting By Deena Beasley; Editing by Bill Rigby)