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The annual Business Group on Health survey of large employers is always chock-a-block with interesting data, and this year is no different.
The headlines are all about the rising health spend, nearly all of which can be attributed to prescription drugs, where the concern remains centered around GLP-1-based medicines for diabetes and obesity. (Cancer, too, is driving some of the attention.)
This is an extension of the broader storyline about how the health system as a whole is dealing with increasingly cost-effective meds … that are being prescribed in huge volumes.
The other narrative buried in the survey data is the deep frustration with PBM business as usual, which didn’t get the same kind of media attention. Eighty-six percent of the 125 large employers who responded to the survey said they were “very concerned” or “concerned” with the lack of transparency in contracting and rebates, and more than half are either implementing or strongly considering adopting a “transparent PBM model.”
I suppose it’s a lot easier to blow off steam when answering a survey than when actually making decisions, so I’m reluctant to suggest that we’re at some sort of an inflection point. Still, interesting datapoints.
Now that the announcement of “maximum fair prices” is in the rear-view mirror, there’s not much to talk about on the IRA** for a few weeks. So it’s worth looking at where the lawsuits over the law stand, because things have gotten a bit spread out. Here’s a visualization:
Some quick notes:
I’m not handicapping any of this. The conventional wisdom is industry has an uphill road with all of these suits, but that there are so many shots on goal that no one seems to be comfortable declaring the game to be over.
PhRMA is closest to getting action on its appeal. Oral arguments in that case were heard in early May.
On the flip side, Merck and Novartis are still waiting for a district court decision. The Novartis case is being heard by the same judge who shot down three other suits, so that’s an especially long shot. The Merck case was the very first lawsuit filed, and the company has asked the judge what’s up with the delay.
The Chamber case is probably the one you can ignore right now: the issues in that case revolve around whether the Chamber has standing to sue, so even if those issues get resolved in favor of the group, there’s still miles to go before the actual constitutional concerns get any attention.
The two most interesting cases remain AstraZeneca and Novo Nordisk, both of which include not just constitutional objections but also allegations that CMS screwed up the way they interpreted the law. I don’t know if those issues will get a more sympathetic audience at the appeals court level, but those approaches remain somewhat novel.
** This is almost certainly an untrue statement, lol. There will be continued sleuthing to put context around the MFPs. We’re going to hear a ton about Part D stabilization. As open enrollment for 2025 gets closer, the volume will increase on conversations about the $2,000 OOP cap and “smoothing.” There will always be a lot to talk about here. But relative to the last week … we should get something of a breather.
The sourcing and details here leave something to be desired, but a source is telling the 340B Report that four of the 10 MFPs are below the 340B price. Without more details, it’s hard to pontificate here, other than affirming the obvious point that the MFP/340B dynamic will blow up a portion of the arbitrage that 340B providers enjoy. And it’s a reminder that adjudicating which medicines get which price is going to be a royal pain in the ass that hasn’t been remotely worked out.
I received a ton of feedback on yesterday’s chart showing how far and fast prices fall when generic drugs are introduced in different countries. The United States looks great when the data is presented as a percentage change, but a lot of you noted that the dramatic drop is as much a function of the fact that prices in the United States are much higher to start, meaning that they have room to fall more dramatically. It’s not a bad point, and I would love to see absolute pricing numbers. But I still think it’s noteworthy that, in a system where so much else doesn’t work, the economics of genericization seem to follow the rules.
CORRECTION: I keep fat-fingering the spelling of “Kamala” when talking about the Vice President. I’ve corrected it in the archives, and I’ve made a promise to never do it again.
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