I don’t want to brag, but I was right about the debate, which featured nothing on health policy beyond a couple of throwaway lines … and Trump’s memorable quip about repealing the Affordable Care Act: “I have concepts of a plan.”
Instead, I spent the time watching an instant-classic, five-set Nebraska-Creighton volleyball match. Unlike those who watched the debate, I have no regrets about my evening. #GBR
There’s a PBM hearing this afternoon, which came as a little bit of a surprise to me. The House Judiciary event was apparently announced fairly late on Monday, so I don’t feel too bad about my lack of preparation, but still …
There shouldn’t be fireworks. The panelists are all academics or think-tank folks, which means that the hearing should be illuminating but lacking in the kind of show-trial red meat that generates a lot of media attention.
I’m always curious about the token pro-industry voice during these events. That role will be filled today by DePaul’s Tony LoSasso, whose advocacy for PBMs includes kicking dirt at independent pharmacies. I don’t know if that’s a thoughtful or defensible position, but it’s a brave one.
The other person worth watching is USC’s Karen Van Nuys. Van Nuys and her colleagues just published — in JAMA — what is likely to be one of the definitive analyses of PBM consolidation. The idea that there is a lot of concentration in the market is not novel, but the USC team went one step further, showing market power for each payer type: commercial, Part D, Medicaid, etc.
Turns out that no matter how you slice the market, there are really only five PBMs that matter. And when the authors looked at that data through the lens of the Justice Department’s metric for reviewing the anticompetitive impact of mergers, they found that every one of those markets is “highly concentrated.”
Of course, the big unknown is what policymakers do with that information. Sniffing around that question may make today’s hearing worth tuning into.
(Speaking of hearings, Senate Finance is — according to Axios — thinking about doing a hearing about the IRA’s drug-pricing components. I’m going to put a marker down right now: if that hearing happens, it’s going to be a partisan gong show, elevating concerns about the CMS Part D “stabilization” demo and prompting lots of headlines about a “bailout” of the IRA. You heard it here first.)
The second-biggest health care story in the country right now is also one of the most undertold stories: the effort of PBMs to quietly expand their vertical integration into the actual marketing of pharmaceuticals.
And that’s a story that took another leap yesterday, with Reuters reporting (and several others following) on OptumRx’s August formulary update. OptumRx’s pseudo-pharma company, Nuvaila, will market both a Humira biosimilar as well as the first Stelara biosimilar. (In both instances, it looks like Nuvaila will be white-labeling Amgen drugs.)
In the case of Humira, Humira itself will be excluded from the OptumRx formulary, and Nuvaila will have one of the preferred drugs. For Stelara, the brand-name product and the Nuvaila drug will be co-preferred.
In other words, the PBM unit of the ninth largest company in the world will be favoring two medicines that it owns (or, at least, that it sells) in competitive markets, despite the availability of lower-priced alternatives. Given today’s top story — concerns about the concentration of PBM power — this additional vertical integration ought to make everyone uncomfortable.
But the reality is that its not clear how these new entities are working, exactly. My assumption that they’re taking part of the biosimilar manufacturer’s cut in a transaction that looks — financially — like a the usual rebate-to-get-on-formulary play. That probably delivers lower prices, to be sure, but at the expense of both the short- and long-term viability of the biosimilar market.
How this all fits together remains a mystery, at least to me, beyond this fascinating-but-limited STAT story on “rebate credits.”
Old-timers will recall that there was once integration between PBMs and pharmaceutical manufacturers, and that didn’t go well, legally, for anyone. Which is why all of the drug companies dropped their PBM businesses. Is there a reason why the current phenomenon isn’t just the 1990s all over again?
If today was less busy, I’d spend a little extra time riffing off this Reuters story, which carries the headline, “Weight-loss market to see 16 new drugs by 2029, report estimates.” On the merits, it’s kind of a silly piece — there’s not room for 16 new drugs, and undifferentiated compounds are likely to end up the R&D trash heap — but it gets a deeper truth.
Even if the number if off by 50%, that would mean we’d have something like a dozen obesity meds within five years, all jockeying for space in a super-competitive market.
There is only one way that prices will go in that scenario: down.
So any analysis that estimates what the future budget impact of obesity meds might be using today’s prices is almost certainly going to end up being way wrong.
Elsewhere:
Yesterday, I wrote this big thing about how there’s nothing out there for consumers about IRA smoothing/M3P/Medicare Prescription Payment Plan/MPPP, unaware that just hours earlier, CMS had pushed live a fairly helpful video and website explaining the basics of the program. I still think we have a goat rodeo in the making, but CMS did a good job of detailing some of the elements of the program that are going to be confusing.
Arkansas is going to try to throw sand in the gears of J&J’s effort to implement a rebate model for 340B sales around two of its drugs, according to 340B Report. I assume this means litigation, and — as with most litigation — the only thing I can predict with certainty is that the 340B lawyers are going to do quite well.
I don’t think that the Access to Medicines Foundation’s work is particularly useful as a quantitative assessment of how drug companies are doing with international access policies, but, from a descriptive POV, the group’s report might have some value. STAT has coverage, though it leans to the quantitative side of things.
The Maryland PDAB is a masterclass in bureaucratic process, but I should note that the group, yesterday, approved the process for moving forward with their price-setting plans. The state’s Legislative Policy Committee must now rule on the plan within a 45-day window. This is not just me bellyaching about process: I get the feeling the board, too, has had it will all of the bureaucracy, too.
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