New PostBoth Novo and the WaPo Define the Obesity-Med Challenge Well. Defining the Solutions is Another Matter.

I’ve been on the record for a while now arguing that the conversation around obesity medicines ought not be a debate about whether the medicines are “worth it” — it seems clear that they are — but rather a discussion about how, exactly, we’re going to pay for them. 

We’re not having that discussion yet, but a couple of news items today suggest that we’re inching closer. First, Novo Nordisk CEO Lars Fruergaard Jørgensen told the Financial Times that yes, obesity medicines require some upfront spending for long-term savings, but “we need to share that risk to get going.” 

And then the Washington Post’s editorial board weighed in with a piece with a provocative headline: “How to make powerful new obesity drugs available to all.”

That’s all good news. 

The dark cloud within that silver lining, however, is that no one seems to have a great idea of exactly the mechanism to “make powerful new obesity drugs available to all.” The WaPo suggests, unhelpfully, that “buying the medicines in bulk” might help. They also suggest that price controls might be the ticket. The FT piece floats risk-sharing approaches being tested by gene therapy companies. 

None of those ideas seem particularly well-suited for the task at hand, unless “buying in bulk” is code for some of the “Netflix-style” approaches that have been piloted around hepatitis C medicines,. That probably isn’t the solution to the entire how-to-cover-everyone question, but might be a solution to a part of the problem. 

But we’re probably in a “let a million flowers bloom” period right now. The more ideas we can chew on, the better. 

A QUICK ASIDE: the WaPo piece says that ICER doesn’t think weight-loss drugs are cost-effective, which isn’t really true. I’ve said it before, and I’ll probably keep repeating myself, but ICER officials have said that — given the size of the rebates — the medicines probably do meet their cost-effectiveness thresholds. The group’s earlier analysis assumed smaller rebates than the ones we’re seeing in the real world. 

ANOTHER QUICK ASIDE: Speaking of rebates in the real world, the Raleigh News & Observer has a great piece on the size of the rebates that the state has been getting on obesity medicines … and the effort to make sure that those rebates stay secret. It’s a good yarn about transparency, and it includes some now-redacted charts spelling out rebate data.

I partook in many Thanksgiving traditions this year. I ate too much pie. I cooked a turkey that maybe erred on the side of “dry” (but salmonella-free!). I listened to Alice’s Restaurant. 

And I also discussed health care — and drug prices — with family members. It’s always an eye-opening experience. I mean, I swim in this stuff day after day, so it’s helpful to get perspective from those who are smart and well-read but don’t necessarily have a Google Alert set for “Elizabeth Fowler.”

There were two big takeaways from the discussion. The first is that no one remotely understands the IRA, especially the $2,000 out-of-pocket cap. My informal poll of the Medicare beneficiaries in my living room suggests that that provision should be a big hit … only no one was really tracking on it. 

That aligns with a lot of polling on the topic. If you’re a pessimistic Democrat, it illustrates something of a messaging failure on the part of Joe Biden. If you’re an optimist, it suggests that there is a lot of upside in talking about the cap. 

(Incidentally, the OOP cap was a lot more interesting to folks than price controls. I think “negotiation” makes for good soundbites. But it’s hard to understand exactly how price setting is going to impact an individual’s personal financial situation.)

The second takeaway is that no one has a great sense of what anything actually costs. We had a little discussion about the price of Ozempic. One of my guests guessed it could be had for around $50 a month on GoodRx, which is off by $850. That’s good context for me about how non-wonks perceive prices. 

I know I’m not the only one who has these conversations around the holidays, so I’m curious about the insights and learnings from your own gatherings …

The biotechnology industry is really struggling. That’s blindingly obvious to everyone following biotech and probably a mild surprise to everyone else (including most policymakers, who act as if the industry is a cash-printing machine). That makes this Bloomberg piece on the impact of tight money — and the IRA! — on R&D investment an important read. 

I haven’t really been paying attention to all of the lawsuits alleging a conspiracy to keep insulin prices high, in part because of my decided non-legal belief that the historical problems in the insulin market are a “don’t hate the players, hate the game” kind of thing. But there sure is a lot of litigation, and the Washington Post flagged three suits in Virginia to add to the list. 

Modern Healthcare has a nice writeup of Merritt Research numbers on charity care at nonprofit hospitals. The key point is that charity care — as a percentage of operating expenses — is at its lowest point in more than two decades. The MH article gives the whole thing a sympathetic shading, noting the financial squeeze on hospitals, and doesn’t go down any 340B-related rabbit holes.