"Are insurance policies saving patients money, or keeping them from the treatment they need?" by Bob Tedeschi, August 22, 2016
As science makes once-unthinkable treatments available, patients are increasingly facing a harsh reality: Insurance companies are forcing them to try older, less expensive therapies for months before covering pricier ones.
Insurers have long relied on a cautious approach to control costs and spare patients from expensive medications they might not need. But in more than a dozen interviews with doctors and patients, a picture has emerged of insurers growing more aggressive as they respond to financial pressures.
The result is a reliance on what is known as “step therapy,” whereby patients are forced to try cheaper treatments before they graduate to more expensive ones, even when health care providers are confident the inexpensive treatments will not work.
In one example, a woman with lupus said her vision was severely affected after an insurer forced her to try multiple medications before paying for one that her doctor initially wanted to prescribe. In another, a patient with lung cancer took a break from a successful chemotherapy regimen, then was blocked by her insurer from resuming it until she had tried other drugs.
Spurred by stories like these, state legislators, who regulate Medicaid plans and much of the nation’s private insurance, have begun pushing back. In recent months, at least five states, including California and Indiana, have passed legislation to rein in step therapy approaches, known by critics as “fail first” policies. More than a dozen other states now have such laws on the books.
Insurers argue that, “Step therapy is addressing the problem of making sure patients get the right treatment at the right time, and if there’s an affordable alternative, they have access to it first,” said Clare Krusing, a spokeswoman for America’s Health Insurance Plans, a trade group.
Doctors and ethicists generally do not dispute that theory, but....
There is an “important nuance” when it comes to your health and well-being.
What patient likes hearing that, huh?
No nuances when it comes to ca$h:
"Foreign investors eye local lab sites" by Robert Weisman Globe Staff August 21, 2016
After years of snapping up Boston-area office buildings and high-end housing projects, international investors are now going after a new market: laboratory space that is in tight supply as the region’s life sciences industry booms.
In recent months, large funds and wealthy individuals from Europe, Asia, and the Middle East have made first-time bids for biomedical research properties in Kendall Square in Cambridge, Boston’s Longwood Medical Area, and elsewhere, according to commercial real estate brokers. Investors see an opportunity to profit from rising rents and property values.
Some think the trend could be accelerated by the United Kingdom’s surprise vote in June to leave the European Union, creating more volatility across the Atlantic and clouding the outlook for investors traditionally drawn to London and other European markets. Overseas investors also are joining funds pooled by US real estate firms.
“International capital is knocking on the lab door,” said Frank Petz, managing director at JLL Capital Markets, who oversees the real estate firm’s business in New England. “There’s a greater appreciation of that asset class, and the Boston area is considered a safe haven.”
Nearly half of last year’s roughly $46 billion in commercial real estate purchases in the area were made by foreign buyers, driving up prices for competing buyers but boosting profits for sellers.
Until recently, overseas buyers have stayed clear of biopharma space, a niche seen as historically risky and dominated by a handful of connected domestic players led by Alexandria Real Estate Equities, BioMed Realty, and MIT.
Established players say new entrants need to understand the roster of potential lab tenants and their financial backers as well as the business of biotech startups. Such companies grow rapidly and need to move to larger laboratories during drug research, even though they are burning through venture capital and won’t generate earnings for a decade or more.
“The asset class has tended to attract investors with a track record and an existing portfolio of space, which gives tenants more options,” said Bill Kane, the Boston-based senior vice president of Biomed, which owns more than 3 million square feet of area office and lab space.
Foreign investors lacking that background “used to want downtown offices and they wouldn’t look at life sciences properties or medical offices,” said Rob Griffin, US head of capital markets at real estate service firm Newmark Grubb Knight Frank, who this month hosted a group of deep-pocketed Asian investors studying Boston area lab buildings. “There’s been a sea change in the parameters of international investors and what they’re looking for.”
Their risk aversion was allayed in part by Ariad Pharmaceutical Inc.’s ease in subleasing large parts of its planned new Alexandria Center headquarters and lab campus on Binney Street in Cambridge to IBM Watson Health and other tenants in the past two years. That move, coming after a regulatory setback forced Ariad to cuts its workforce and scale back on its own space requirements, underscored the robust demand for space in Cambridge, where the vacancy rate is 3.4 percent, according to a report issued last week by brokerage firm Transwestern.
Last year’s $4.8 billion buyout of BioMed by Blackstone Group LP also seemed to validate the strength of the market for lab space — a market concentrated in US biopharma hubs such as Greater Boston, San Diego, and the San Francisco Bay Area. New York-based Blackstone, the world’s biggest private-equity firm, is considered a savvy real estate investor.
David Begelfer, chief executive of NAIOP Massachusetts, a commercial real estate trade group, said, “There’s a learning process that you need to have. I don’t think you can just come in, plunk down a bid, and walk away with these types of [lab] properties.”
But the learning curve isn’t deterring foreign investors. Transwestern partner Bob Richards fielded bids from China, Korea, and the Middle East for part-ownership in a lab building in the Longwood Medical Area, home to Harvard Medical School and a cluster of teaching hospitals.
“We’re seeing a whole lot of [potential] buyers not previously seen here,” he said.
Thus far, only a few biomedical buildings have been successfully purchased by overseas buyers, led by a pair of German-owned firms. An investment arm of Deutsche Bank last year paid $123 million for a building at 50 Staniford St., near Massachusetts General Hospital.
Jamestown LP, which invests funds raised from wealthy Germans in properties that include Newbury Street’s brownstone retail boutiques, bought Boston Design Center — a former military warehouse in the Seaport District renovated for labs and office — for $72.7 million in 2013.
The firm paid $193 million the same year to buy 245 First St., a Kendall Square biotech building. Three years later, it is preparing to sell it for more than $300 million to a group that includes a Norges Bank sovereign wealth fund that invests North Sea oil revenue.
Norges also reportedly bid earlier this year for One Kendall Square, an eight-acre warren of biotech buildings that is one of the area’s best-known startup spaces, but the property was sold to Alexandria for $725 million. Other foreign investors that have eyed lab Boston area biomedical buildings include Chinese fund Evergrande Group, Dubai-based sovereign wealth fund Safanad Ltd., and Samsung SRA Asset Management Co., an arm of the Korean conglomerate, according to real estate insiders.
Overseas institutions, which typically manage pooled funds from multiple investors, are often secretive. Representatives from Jamestown, Norges, Evergrande, Safanad, and Samsung all declined to discuss their interest in lab space or didn’t respond to inquiries.
While the trend is just beginning, buyers and sellers say it’s only a matter of time before more biomedical lab space in the area is snapped up by international investors. This month, Chinese developer Greenland Holdings and two partners disclosed they had put more than $1 billion into a biotech industrial park south of San Francisco.
“It’s part of the maturation of the life sciences buildings as a mainstream asset rather than a niche product,” said Tom Andrews, executive vice president and Greater Boston regional market director for Alexandria.
Riaz Cassum, senior managing director at Boston commercial real estate agency HFF, said he recently visited Asia, where he met with investors seeking to “play across the spectrum” by acquiring lab buildings or even firms that own portfolios of lab buildings.
“They love the Boston market because of the educational and research institutions here,” Cassum said.
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