I didn’t realize, when I woke up on Monday morning, that this would be PBM Week — a close cousin to Shark Week — but here we are.
There’s a ton of PBM-related news out there this morning, piling on to the FTC report that is providing the tentpole for PBM Week. Let me see if I can wrangle it all.
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The most significant item is the news that the FTC is weighing a lawsuit against PBMs over the way that rebates around insulin have been handled. The Wall Street Journal broke the story, and now every major outlet has matched the reporting. Something is afoot.
Exactly what is afoot remains kind of murky. A close reading of the WSJ story (Politico also has some strong reporting) suggests that the suit will go beyond insulin (to other highly rebated drugs) and beyond PBMs (to include manufacturers). But there’s no real detail beyond that, so it’s hard to tell what’s really coming next.
I’m a pragmatist, so I’m not quite sure what the endgame is here. The insulin supply chain was hugely messed up for a long time, but that seems to no longer be the case, especially from the consumer POV. (I feel the same way about state and local efforts in similar suits, though I confess to not having followed those super-closely.)
It certainly seems possible that the FTC can find some embarrassing elements to highlight, but unless there is a more fundamentally, legally sound case against rebates in general, I don’t see how this threatens to re-order the world.
Happy to take alternative viewpoints, though!
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But “embarrassing elements” have power of their own, and it’s creating a clear environment of hostility toward PBMs. And that environment isn’t going to get any less hostile.
STAT broke the news that PBM leaders are going to get hauled to the Hill in a couple of weeks for a House Oversight Committee hearing on July 23. That’s going to lead to a new round of coverage.
There will be another round when the FTC lawsuit actually lands. I would imagine that the New York Times is going to take at least two or three more swings at the industry.
In other words, the hits are going to keep coming.
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Layered on top of this is going to a renewed interest in alternatives. Modern Healthcare has a strong piece today that looks at smaller employers that have jumped ship to more nimble, transparent PBMs. This has mostly been a curiosity — the smaller players don’t have meaningful share — but it’s only going to boost awareness of how PBMs operate.
There were some gems in the Modern Healthcare piece, including this quote from Geisinger’s chief pharmacy officer: “One of the big three comes in and says, ‘Geisinger has been giving you $30 million, and we’re going to give you $55 million in rebates.’ What they don’t understand is they have to spend $3 for every dollar they get in return.”
Modern Healthcare is not going to be the last outlet to tell this story, and each one is going to reinforce the same narrative.
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Reality check: This is not the end for PBMs. It’s not the beginning of the end. It’s probably not even the end of the beginning. UnitedHealth Group has added more than $15 billion in market cap over the past five days. CVS and Cigna are both trading up.
Make of that what you will.
In non-PBM news:
The Bernie Sanders media tour continues. He spoke to Reuters about his quest for lower obesity med prices, expressing confidence that he can will prices down. Good luck with that. Reuters did ask Bernie about PBMs, too, but he kind of punted and pivoted back to bashing pharma.
Axios said that Senators are checking with colleagues to see if there is interest in passing some patent reforms via unanimous consent. A bipartisan package has already cleared the Senate Judiciary Committee. What’s being shopped is apparently a watered-down version of that legislation: efforts to address patent thickets are in, efforts to tackle product-hopping are out.
