U.S. taking aim at drug-plan rebates
The legal status of drug-plan rebates that the Trump administration has blamed for helping keep prices high would be limited under a proposal U.S. health officials rolled out Thursday.
The measure, released by the Department of Health and Human Services, would roll back so-called safe-harbor protections for such rebates, which kept them from running afoul of federal anti-kickback laws. The plan isn't final and will be subject to a 60-day period for public comment.
In a statement, Health and Human Services Secretary Alex Azar blasted the rebate system as "a hidden system of kickbacks to middlemen" that increases drug costs for Americans every day.
Under the proposal, safe-harbor protection would be eliminated for rebates drugmakers pay to pharmacy-benefit managers, Medicare Part D plans and Medicaid managed-care organizations. A new safe harbor would be created for rebates on drug discounts offered directly to patients, as well as fixed-fee service arrangements between drugmakers and pharmacy-benefit managers. Without safe-harbor protections, rebate money pocketed by the managers could be considered an illegal kickback.
Under the proposal, premiums for Medicare drug plans could increase anywhere from 8 percent to 22 percent while average costs patients pay out of pocket would fall 9 percent to 14 percent, according to the plan. The premium increases would be shouldered by all beneficiaries while the cost decreases would be most helpful for those who take the priciest drugs.
-- Bloomberg News
Shut by cold, 6 Tyson plants back on job
Six Tyson Foods plants in the upper Midwest resumed production Thursday after ceasing operations Wednesday because of frigid temperatures, a company spokesman said.
Springdale-based Tyson did not say which facilities were affected but, according to the company's map, there are plants in Wisconsin, Iowa, Illinois and Indiana.
Temperatures were well below freezing Thursday morning across the upper Midwest and Eastern United States with wind chills recorded at 50 degrees below zero in Minnesota.
Pork producers Smithfield Foods and Hormel Foods have also reportedly adjusted their operations during the cold snap. Industry publication Meatingplace reported that a Hormel supplier did not operate Wednesday in Minnesota, while Smithfield took precautions but continued operations.
Transportation disruptions related to highway conditions for truckers hauling livestock and worker shortages in the meat plants were industry concerns.
-- Nathan Owens
Jobless-aid applications up by 53,000
WASHINGTON -- The number of Americans applying for unemployment checks hit the highest mark since September 2017, but they're still low enough that most workers continue to enjoy job security.
The Labor Department said Thursday that weekly applications for jobless aid rose by 53,000 last week to 253,000 from a 49-year low of 200,000 the week before. The four-week average, which is less volatile, rose by 5,000 to 220,250.
The number of federal workers seeking unemployment benefits fell 42 percent, to 14,739. A 35-day partial shutdown of the federal government ended last week.
Claims are a proxy for layoffs. Unemployment has dropped to 3.9 percent. Employers last month went on a hiring spree and added 312,000 jobs. The January jobs report, out today, is expected to show they began 2019 by hiring 165,000.
-- The Associated Press
Electrolux set to shut in Memphis by '21
MEMPHIS -- Swedish appliance maker Electrolux said Thursday it plans to stop production within two years at its factory in Memphis while investing $250 million in a separate facility in the state.
The maker of Frigidaire products said it is consolidating all U.S. cooking manufacturing into its facility in Springfield, Tenn. The company had said in March that it was putting its plant expansion in Springfield on hold, citing President Donald Trump's tariff announcement as the reason. Springfield is about 30 miles north of Nashville.
Electrolux said production at the Memphis facility is expected to continue through 2020. Buttressed by about $150 million in financial incentives from Memphis, Shelby County and the state of Tennessee, the company opened its Memphis factory in 2014 with the goal of producing 600,000 ovens annually, while employing 1,200 workers.
When it opened, the factory was viewed by local politicians as a long-term job producer. But critics decried the incentives, which came at a time when Memphis was experiencing budget problems.
About 530 people currently work at the Memphis factory, company spokesman Eloise Hale said.
-- The Associated Press
Court blocks ad warnings for soft drinks
SAN FRANCISCO -- A federal appeals court on Thursday blocked a San Francisco law requiring health warnings on advertisements for soda and other sugary drinks in a victory for beverage and retail groups that sued to block the ordinance.
The law violates constitutionally protected commercial speech, the 9th U.S. Circuit Court of Appeals said in a unanimous ruling.
The judges granted a preliminary injunction that prevents the ordinance from taking effect and kicked the case back to a lower court.
The required warnings "offend plaintiffs' First Amendment rights by chilling protected speech," the judges wrote.
The American Beverage Association, which represents Coca-Cola, PepsiCo and others, joined retail and advertising organizations to argue in court that the rules should be blocked.
The law passed by San Francisco in 2015 would require beverage advertisements within city limits to include warnings that drinking sugary drinks contributes to health problems.
-- The Associated Press
Tennessee lab settles kickback claims
NASHVILLE, Tenn. -- A prosecutor says a pathology laboratory has agreed to pay $63.5 million to settle claims that its relationships with referring doctors violated federal kickback law.
U.S. Attorney Don Cochran's office in Nashville said Thursday that the settlement by Irving, Texas-based Inform Diagnostics stems from allegations in three whistleblower lawsuits.
The prosecutor's office says the settlement resolves allegations that the company formerly known as Miraca Life Sciences Inc. provided subsidies for electronic health records systems and free or discounted technology consulting to referring doctors and physicians groups.
-- The Associated Press
Business on 02/01/2019
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