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INFLECTION POINT/ ICER’s Analysis on Obesity Meds Misses Half the Conversation
We’re screwing up the obesity conversation.
I don’t want to sugar-coat things: Obesity drugs create an enormous dilemma, pretty much unlike anything the health care system has seen. We have medicines that are cost-effective — and getting more cost-effective over time — that are nonetheless budget busters.
So we need to have a deep and thoughtful conversation about what to do. And we’re not off to a very good start.
The latest evidence for that is ICER’s new white paper on how to pay for obesity medicines, which suggests a range of tactics, which are mostly aimed at payers and which are mostly designed to tamp down the use of the drugs.
The first item on ICER’s list is literally “Temporary Coverage Denial.”
I could go down the list and roll my eyes at each one**, but it would be more expeditious to just send you to this NPC analysis, which makes the argument more thoughtfully than I can.
The ICER solutions are reasonable only if your goal is to control spend***. But if the goal is to drive the biggest improvement in health possible, then these solutions aren’t going to get us there.
Do I have better ideas?
I mean, my take here has never been particularly realistic, but we should be open to finding the money somewhere. It’s a big economy! Fewer questionable back surgeries? Two less nuclear submarines a year? Closing the carried interest tax loophole?
The United States, as the richest society in the history of the planet, should be able to fund cost-effective medical interventions.
To ICER’s credit, they’re talking about the topic on a public webinar in a couple of weeks. If my big criticism is “we need to be having a dialogue,” then it would be hypocritical not to give them props for hosting that conversation. We gotta start somewhere.
** I will give partial credit to ICER’s call for creative payment solutions and even carve-out approaches, assuming that neither of those is just used as a fig leaf to deny care.
*** I’m also disappointed in the focus on budget impact to the exclusion of any discussion of cost-effectiveness here. I want to be clear: ICER believes these medicines are cost-effective, a fact that somehow doesn’t make the ICER press release. And the meds are cost-effective at net price assumptions that are probably higher than real-world prices. (Indeed, the chart in the white paper on net prices uses figures that are substantially higher than the cash-pay prices now available.)
At one juncture, the report acknowledges the critical place that cost-effectiveness plays in this conversation: “ICER does not disavow the importance of considering long-term cost-effectiveness as the most appropriate foundation of fair pricing for innovative drugs.”
The next word is “However,” which is pretty much where the rest of the report lives.
INFLECTION POINT/ Pharma Tariffs Are Dumb
I have nothing insightful to say about pharma tariffs, which are still coming, per the president last night.
They are dumb. They will create shortages that will harm Americans. They will suck away revenue that would otherwise have gone to R&D. They will not prompt a meaningful onshoring of manufacturing.
I’m not making an argument here. I’m stating the consensus position of pretty much everyone who works in or examines the U.S. health care system. If there is a coherent alternative take on this, please send it along, and I’ll share. But I don’t think it exists.
Anyway: That brief rant was all just organ music to highlight a point from Brooks Conway that I hadn’t appreciated in this context: The United States government is the largest payer for pharmaceuticals in this country.
If prices rise, the government will be on the hook. We’re pissing into the wind.
QUICK TURNS/ Avalere on PDABs and the IRA in Court
This is an elegant new assessment from Avalere on how payers would react to a state that set an “upper payment limit” on medicines via a PDAB. In short, payers would boost cost-sharing and increase premiums. Not great for affordability! It’s a reminder that the problem that PDABs solve for is not patient access. That’s not to say that there’s no benefit — government gets a smaller bill — but we need more honesty about the winners and the losers here.
I need to block an hour to listen to the oral argument in the Novo Nordisk IRA appeal. Endpoints’ coverage gets at why this is my favorite of all of the IRA lawsuits: It’s the one that most directly questions whether CMS’s implementation of the law has been a bit too fast and loose.
One bonus obesity link: Here is Sen. John Fetterman lobbying the Trump administration, via the New York Times, for full coverage of GLP-1 medicines by Medicare, based on his experience as a user of GLP-1. Weirdly, the piece never mentions that Congress could be taking action. It seems to me like a bill from Congress might be a more effective way for a Senator to drive action than lobbying RFK Jr., but I’m just a newsletter guy.
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.
