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The ARC/ The Five Biggest Stories in Health Care:
I often talk about the “biggest story in health care” or “the second biggest story in health care” as a tongue-in-cheek way of emphasizing the importance of some issues that don’t otherwise immediately register as hugely consequential.
I do it mostly for my own amusement, and I hadn’t defined the list. But that feels like a fun exercise. To be clear, this isn’t a list of the actual biggest stories in health care. The real ranking would have to have the Trump-catalyzed threat to the innovation ecosystem as #1.
Instead, consider this a list of topics with very high importance-to-attention ratios. Nearly all of these issues have been under-covered:
Death of retail pharmacy. I’ve been talking about this as the biggest story in health care for a while, in part because retail pharmacy is so intertwined with a Richard Scarry view of American business. There’s been a lot more attention on this issue over the past year, and it’s not as under-covered as it used to be, but I’m committed to the bit.
The rise of “pseudo-pharma companies.” I don’t know quite what to call the often-offshore PBM affiliates that take biosimilar meds, white-label them, and slap them in preferred formulary positions, so I use the “pseudo-pharma” label. It’s a wild form of vertical integration that shows exactly how creative PBMs can be in extracting value from the supply chain. These businesses have done a great job of driving biosimilar adoption but probably stall a move to a true lowest-net-cost environment.
The “pharm to table” movement. I wrote earlier this week about the early efforts from Lilly, Pfizer, and Novo to create models in which the companies have moved closer to the patient, encouraging telehealth and, in some cases, offering cash prices. Where that evolves in the next five years will be fascinating. (Again, I credit Halle Tecco for the “pharm-to-table” verbiage.)
340B abuse. 340B’s rules and oversight are so vague that it’s hard to call anything “fraud” with any confidence. But there is a huge cottage industry of for-profit companies trying to grab the dollar bills that fall from the sky as a $60 billion program expands, often by engineering the system in ways that don’t remotely “stretch federal dollars.”
Employers and benefit design. To make a huge generalization, employers have generally ignored the finer points of insurance benefit design. This used to be a good-enough approach, but — whether due to lawsuits for or the continued shaming by Mark Cuban — we’re now entering an era where HR chiefs are increasingly under fire for not knowing what their health plan is paying for abiraterone.
What else am I missing? What are the biggest stories with the smallest profiles? My DMs are open, as they say.
QUICK TURNS/ Billionaires Battle (Almost), More “Pharm to Table,” and Go Terriers
John Arnold and Mark Cuban appeared on stage together this week to discuss health care prices. I was super-pumped to read about what I figured would be fireworks: the two guys have very different ideas on how to change the system (though they both agree that change is no longer optional).
So I was disappointed that the coverage of the event didn’t get to any meaningful back-and-forth between Cuban and Arnold, instead briefly summarizing Arnold’s belief that consolidation had to be countered with price caps and giving more of the airtime to Cuban’s pro-transparency arguments.
ELSEWHERE:
Two big pieces of news out of Madison, Wis. First, the Boston University Terriers women’s ice hockey team has arrived for their big NCAA tournament tilt against Clarkson tonight. Reid Strategic has relocated its HQ to Madison for the rest of the week to support its social media manager.
Second, pass-through PBM Navitus’ Lumicera unit has struck a deal to sell Anda/Teva’s Stelara biosimilar. That’s probably not a huge deal. But the price might be: Adam Fein talked to the company and said that the price will come in at a 96% discount to brand-name Stelara. Whoa.
CMS’ Innovation Center is going to deep-six the embryonic $2 generics effort and a related pilot to tie Medicare reimbursement to the completion of confirmatory trials. This probably isn’t a surprise — Trump pushed out an executive order suggesting those pilots would be killed — and neither program was really rolling. This would be a throw-away news story, except that it’s probably a political cudgel now. “$2 generics” had a ring to it.
In pharm-to-table news, a bunch of senators are asking questions of Pfizer and Lilly’s telehealth partners, looking for evidence of anti-kickback violations. It’s nice work by STAT, but my suspicion is that these efforts have been massively lawyered and that there are no legal seams showing here.
Liz Warren is asking the HHS’ OIG to look into GSK’s decision to move from brand-name inhalers to authorized generics. That move that slashed list prices but maybe raised net prices and definitely dented coverage. We’re over a year into this effort by Warren, and I still don’t have a good handle on even the ballpark net price numbers needed to really make sense of this. (A lot of commentary — and continued questions — have been on what Medicaid is paying, but Medicaid discounts are weird, and the Medicaid number is probably not the most illuminating figure in understanding what’s going on with coverage.)
I don’t have a Pink Sheet login, so I can’t read this story. But the headline alone raises an interesting possibility. “Health Insurers May Sue if CMS Finalizes Obesity Drug Coverage Expansion.”
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.
