It’s the New Year. It’s a time to refresh and reflect and reconnect.
In that spirit, I have two asks of you:
First: If you find the newsletter useful, please take 30 seconds out of your day tell a friend.
Second: If you aren’t getting what you need, hit “reply” and let me know where the gaps might exist so I can build a better Cost Curve in 2025.
Yesterday, I mentioned the Medicare Prescription Payment Plan**, the program under which Medicare beneficiaries can spread their out-of-pocket costs evenly throughout the year, rather than getting whomped with a $2,000 bill to start the year. It’s the first year such an option is available to seniors.
How is that effort going? Not great, Bob!
Bill Saraille estimated that signups were essentially nil, but — in theory! — that could/should change. According to CMS’ guidance on how the program is supposed to run, “The [IRA] requires Part D sponsors to ensure that a pharmacy, after receiving such a notification from the plan sponsor, informs the Part D enrollee that it is likely that the Part D enrollee may benefit from the Medicare Prescription Payment Plan.”
CMS said that the “likely to benefit” threshold should be set at $600. So, in theory, anyone who walked into a pharmacy in the last week with a $600+ script should have triggered an MPPP explainer. (Yes, this sure feels like a pain in the ass for pharmacies.)
But I’ve heard from at least one pharmacist who said that’s not happening. The Part D plans don’t appear to have systems set up to identify those who exceed the $600 cutoff.
Now, it’s still early, and my sample size isn’t that large. But it suggests that all may not be well with IRA implementation.
When it comes to “smoothing,” maybe that’s mostly OK. But if the system can’t bake this kind of relatively minor change into its processes, where will we be in a year, where much more fundamental changes (namely, the “maximum fair prices”) hit the Part D system?
MPPP is a little bit of a dry run for any IRA-related alterations to the supply chain. And, right now, that dry run suggests some danger lies ahead.
(If you’re a reporter and want to get deep here, I should be able to send you in some fruitful directions.)
** AKA “smoothing,” AKA “M3P,” AKA “MPPP”
I’ve published a couple of tranches of “2025 advice” from you all, the readers of Cost Curve. Most of the advice was squarely centered on changing the health care system, as opposed to, say, life hacks. You all are focused.
This is probably a good time for me to take a turn. My initial thought was to lean into some “connect outside your silo” counsel, because we’re really, really bad at that in health care. But that’s pretty unoriginal, and you deserve better.
So, instead, let me push some less-conventional advice: Make 2025 the year where you file some lawsuits. That’s the takeaway when it comes to celebrity spats, but I’m finding the same phenomenon has played out this year in health care. Want the media to pay attention to 340B? File a lawsuit. Want people talking about ERISA and fiduciary responsibility? File a lawsuit. Want to draw sunlight to the black box of accumulators and maximizers? File a lawsuit.
I’m kidding here! Mostly!
I’m a comms guy, and I’m not suggesting that the health care industry should be launching spurious legal action just for the PR benefit.
But it is incredibly clear that there is a lot of synergy between lawsuits and public attention, and that synergy can be leveraged far more effectively than generally happens. So perhaps 2025 is the year in which you make friends with some litigators and make sure that your comms/policy agenda is well-integrated with what the legal eagles are up to.
To the extent that you want to read the tea leaves, 2025 might be a good year. My optimism is based here on the thinnest of reeds: By and large, the media decided to stop treating beginning-of-the-year pharma price changes as a stop-the-presses moment.
In part, that may be based on a growing realization drugmakers are simply not meaningfully raising prices on medicines, and have not done so in some time. If you need additional evidence, Adam Fein has a well-constructed analysis of the data — including SSR prices — through 2024.
Now, price changes aren’t the only price factors worth talking about (you’re going to hear a lot from me about launch prices this year), but they’ve traditionally consumed a disproportionate share of the oxygen in the room. Hoping Adam’s new post helps keep things in perspective.
ELSEWHERE:
ICER going to look at a new SMA treatment and review some of the therapies it’s assessed in the past. I continue to believe that a focus on ultra-orphan diseases might not be the best bang for ICER’s buck, but I know they don’t make these choices lightly.
My view on the “how much does it cost to bring a drug to market” is informed by STAT’s Matt Herper, who suggested a long time ago that you should take a “top-down” approach: just figure out the total R&D investment and divide by the number of drugs that get approved. The “bottom-up” alternative is to try to assess every cost that’s incurred during the development process, add ‘em up, and present that as the number. The latest effort to present a bottom-up number was just pushed out by JAMA Network Open, and I’m not sure it’s illuminating.
I’m working on a journal publication on recent drug launches, so I’m super-curious about anyone looking back at the Class of 2024. Endpoints, Fierce, and Nature Reviews Drug Discovery all have good retrospectives, each including slightly different facets.
Cost Curve is produced by Reid Strategic, a consultancy that helps companies and organizations in life sciences communicate more clearly and more loudly about issues of value, access, and pricing. We offer a range of services, from strategic planning to tactical execution, designed to shatter the complexity that hampers constructive conversations.
To learn more about how Reid Strategic can help you, email Brian Reid at brian@reidstrategic.com.
