It’s hard to say that there’s big news today. Once again, it’s another day of plenty of smaller (but still thought-provoking bits).
Tomorrow should be different.
Tomorrow kicks off earnings season.
My enthusiasm for earnings season goes back to my first real job, working at Bloomberg News in the late 1990s. There, the quarterly parade of financial disclosures were treated as something of a regular celebration, a chance for reporters, analysts, and investors to garner insights into numbers that are shrouded in uncertainty the other 361 days a year.
And earnings calls! Wonderful, hour-long opportunities to get even the most reclusive CEO on the record, with (almost, kind of) nowhere to hide! Reporters just cleared their calendars for the better part of a month, brushed up on accounting standards, and dug in.
This season is going to be particularly interesting because it’s going to start, as it usually does, with UnitedHealth Group’s earnings. United, as you may have heard, had a rough quarter because of the Change Healthcare cyberattack, which fouled up huge swaths of the health care system.
“Rough” is a relative term, though. Tomorrow, we’ll learn exactly how it actually affected commerce, at least from United’s POV. (David Wainer at WSJ has early thinking on some of the possibilities.)
My goal, tomorrow, will be to take a step back, though, and leave the gnashing of teeth about Change to others. I expect that United’s Optum unit — including its OptumRx PBM — is going to again have record revenue and record profits. The question is not “is Optum growing?” but “how fast?”
So stay tuned.
(BTW: Johnson & Johnson also reports tomorrow, though the company is so large and diversified — Band-Aids! Contact lenses! CAR-T therapy! Artificial joints! — that it’s sometimes hard to read too much into the company-wide figures.)
HHS Secretary Xavier Becerra sat down with Yahoo News for a video interview, and a surprisingly small portion of the conversation had to do with drug prices. Here’s the only real mention: “And what we’re doing in this very moment is negotiating with 10 companies on 10 of the 10 most expensive drugs to the Medicare program.” I’m a little grumpy about the precision here: it’s not 10 companies, and just because they’re high-spend medicines doesn’t make them “the most expensive.” But I’m also a little surprised that the messaging from an administration official isn’t tighter. And here is where I mention the fact that Becerra never mentions PBMs.
Speaking of PBMs, here is an anti-PBM broadside by a couple of guys affiliated with the Pioneer Institute. The focus of the piece is about the Flovent brouhaha, where PBMs are refusing to cover the lower-list-price Flovent generic. But the piece, like all the coverage and commentary on the topic, lacks the numbers that would truly illuminate this: what was the net price of Flovent before, and what’s the net price now? Without that data, it’s just too easy to spin whatever narrative is most convenient.
STAT has coverage of the end of a Colorado effort to remove orphan drugs from the purview of the state’s prescription drug affordability board. Revised legislation would guarantee closer consideration of the unique reality of orphan meds, but it would stop short of giving a free pass to such drugs.
There is a clear counter-narrative emerging around accelerated approval that points out that even when the system “works” — when confirmatory testing falls short and medicines are removed from the market — there will still have been huge sums of money spent. Bloomberg captures this counter-narrative well in this piece, though it never really acknowledges the benefits of the program for everyone else.
This thoughtful AP story on why the use of Leqembi is slower than originally expected is mercifully free of a lot of questions about the price or value of the drug. That’s progress, right?
Speaking of Alzheimer’s: this op-ed from The Hill makes the case for treating Alzheimer’s a bit like dialysis: let Medicare pay for diagnosis and treatment for everyone, not just Medicare beneficiaries, and carve out an exception that would allow price controls for the drugs earlier than scheduled. The piece is predicated on the assumption that this would unlock use of the medicines and that the government-set price would be high enough to stimulate innovation, which is probably a dangerous assumption.
The whole WuXi thing is fascinating, but it’s beyond the scope of Cost Curve. That said, I found this NYT piece to provide a good overview of the intersection between WuXi and the biopharma industry. But what really caught my eye was the way that the paper emphasized how effective Vertex’s suite of cystic fibrosis drugs (supplied via assistance from WuXi): as of January, Make-a-Wish no longer automatically grants wishes to kids with CF. That’s how big the transformation of the disease has been. As patient advocacy consultant Vasily Tolmachov wrote on LinkedIn: “Talk about #goals.”
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