Thanks for your patience over the past couple of days. The graduation was lovely, Montreal was beautiful, and I couldn’t be prouder of my daughter. These were not, frankly, easy years to be a college student. Everyone in a mortar board this year deserves an additional honorary degree in perseverance.
If you want to search Cost Curve back issues or link to anything you read here, the web links and archive are online at costcurve.beehiiv.com. You can subscribe there, too.
It’s Cost Curve’s first birthday, and I want to thank all of you. It started with a first couple hundred subscribers who invited me into their inboxes with this first edition, and there are now more than 200 daily missives in the archives.
Looking over those 200 newsletters, I’ve found one recurrent theme: the most powerful force in the economics of medicines is complexity. On nearly every topic I’ve covered, complexity is a sword and a shield against a sensibly functioning health system.
Complexity operates on a couple of different levels.
From a practical point of view, complexity gives power to those who can best understand and leverage a certain system. That’s how PBMs managed to seed such enormous growth without meaningful oversight. They knew the rules better than anyone, and they escaped scrutiny, for many years, based on the opacity that complexity provides.
More broadly, convoluted systems lock in the status quo. It’s hard for policymakers to untangle the knotted-up health system, especially in the face of pro-complexity forces. That either dampens design for reform or leads to reform that, ironically, adds more complexity. Here, 340B is instructive. The program has become infinitely more complex in its three decades of existence, and hospitals are banking on impatience with intricacy to freeze the status quo.
The idea that complexity is a capital-P Problem is not a new one. KFF’s Larry Levitt and Drew Altman had a great piece on it last fall. But until I looked back over the past year, I didn’t realize how pervasive it was.
Complexity is at the heart of the IRA’s core failing, which rewards the development of more-complicated biologics over small molecules. Policymakers who wanted to incentivize simplicity would have been wise to pass a law promoting pills — simpler to make, simpler to copy, simpler to regulate — instead. And complexity has worsened controversies over drug pricing, where the price is never the price, leaving lay audiences frustrated and suspicious.
There are reverberations in the political realm, too. The IRA’s price controls aren’t easy to explain: only certain medicines are being “negotiated,” at certain times, under a system that lacks standardization. No wonder awareness of this key Biden administration victory is so low. It’s just too complicated. (Better to talk about $35 insulin, which is almost meaningless … but everyone understands. See this just-release Biden campaign ad for an example of insulin being promoted instead of price controls because you just can’t talk price regulation in a 30-second spot.)
The cure here feels like it should be straightforward. Simplicity — in communication and in policymaking — should be prioritized and celebrated. But to suggest that there is a magic wand that can bring order to the chaos is a special kind of wishful thinking. The forces pushing against simplicity are just too great.
That doesn’t mean there’s no path forward. Just as complexity builds on itself, so can simplicity. It has to be a driving factor in how we talk and think about the health care system. We have to ask, over and over: “Does this intervention or explanation make health care simpler?” And if the answer is “no,” that’s a red flag.
I’ll conclude here by talking my book. I’m a communicator, so I have a special responsibility around simplicity. Part of the point of this newsletter is to create a common set of understandings so that we can have a more inclusive dialogue, one where complexity is not a barrier to entry.
But I can do more — here at Cost Curve and on behalf of my clients** — to push for plain language and understandable policy.
That’s the goal for year two, and I appreciate you all being along for the ride.
** This is my semi-regular reminder that this newsletter is a side hustle, or — more accurately — a labor of love. My real business is in providing PR counsel around the economics of health care. If you have a need there, I’d love to help. The email is brian@reidstrategic.com.
There have been a ton of 340B state lawsuits filed in the past week. I talked about one of them (Novartis in Maryland) on Friday, but you can add Novartis and PhRMA both suing in West Virginia and PhRMA taking action in Mississippi. Reuters has the overview. If you want to be incredibly premature, if industry wins in either Maryland/West Virginia OR Mississippi AND having an appeals court upholds that decision, the 340B issue would be ripe for Supreme Court consideration.
Speaking of 340B, there was a congressional hearing yesterday. The coverage was pretty good — MedPage Today’s take is representative — but I’m not sure what the news was. At a minimum, it sure seems like we’re seeing the battle lines being drawn, with Democrats coming down on the side of hospitals and Republicans expressing concern about abuses.
Speaking of hearings, there was NOT a PBM hearing yesterday, despite — per a STAT story two weeks ago — a request that the PBMs appear before the House Oversight Committee. Curious to see if anyone bothers keeping the pressure up.
NBC went deep on price caps for inhalers, many of which took effect last week. I’m not sure I have ever seen an expansion of patient assistance get as much as positive attention as the inhaler effort has received. It’s a communications triumph and an instant case study. (I don’t have any inhaler-company clients. I just want to recognize great work when I see it.)
The idea that the IRA is going to send Part D premiums up is one that you’re going to hear more and more about. Here’s Sally Pipes in forbes.com sounding that alarm.
Last weekend, we hit an interesting milestone: the 1 millionth op-ed about march-in rights was published. (That’s not true, even if it feels like it. But this new opinion piece in The Hill, by an erstwhile federal appeals court judge who argues that pushing march-in for as a pricing tool is unsupported by the legal text, is worth reading.)
340B op-eds are also popping up like mushrooms after a June rain, spurred in part by the fact that the issue resonates at the local level. The latest is this Buffalo News piece by a Black Women’s Health Imperative official that calls into question charity spending by 340B hospitals in New York.
Header image via Flickr user A♥.
