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Look, 340B has been much in the news lately — yup, there’s a 340B piece below — and there is a chance to really go deep on the topic soon: Adam Fein is doing a webinar on the topic on June 21. You can sign up here.
Bernie Sanders wants to haul Novo Nordisk before his Senate committee to harangue them about drug prices. He’s calling for a vote next week to subpoena the company’s president, even though Novo has been clear that they’ve responded to every Sanders request to date and that they’re perfectly cool with sending their CEO to testify.
I’m going to write on this a bit more in the next week or so, because the targeting of Novo is getting more and more absurd. There’s not a policy hook here. The company isn’t alleged to have done anything wrong, and Sanders’ broader concern seems to be systematic. I get that populist politics leads to this kind of thing, but that doesn’t make the gestures any less empty.
Indeed, it’s the exact opposite narrative that probably needs an airing. The GLP-1 medicines are an incredible success story: decades of steady innovation, a hugely effective intervention, a giant population that can benefit, lots of competition, falling prices.
And yet, these guys are the poster child for pharma excess? That’s upside-down, funhouse-mirror thinking. This is the exact model we want to see repeated, not condemned.
I dream of living in a world where the pharmaceutical industry produces nothing but GLP-1-level successes. What does Bernie dream about?
Last month, CEO of UnitedHealth Group Andrew Witty told a congressional committee in no uncertain terms: “We do not own any drug manufacturers.”
I raised my eyebrows at the time: “I don’t take this as a commitment that United wouldn’t follow their lead, but there’s now a paper trail in the event Optum tries to launch a Cordavis or Quallent-type object.”
(Cordavis and Quallent are the generic-drug arms of CVS and Cigna, respectively.)
Now comes a hint that — yup! — United is thinking about launching its own drug company. There’s a trademark filing that hit last week to protect the name Nuvaila** The description of what Nuvaila would do: “procuring biosimilar pharmaceuticals and selling pharmaceuticals to wholesale pharmaceutical distributors.”
If you want to be pedantic, “procuring biosimilar pharmaceuticals and selling pharmaceuticals to wholesale pharmaceutical distributors” is not quite “drug manufacturing.” United isn’t going to be going through the process of actually making the stuff (and all of the regulatory and compliance hurdles that come with development and manufacturing). They’re probably just going to buy wholesale, slam their label on it, and jam it into a supply chain they already control.
So maybe Witty wasn’t pulling a fast one on Congress. Maybe he sees this gambit as something other than “own[ing] any drug manufacturers.”
But the idea of relabeling meds that someone else is making is, perhaps, even worse.
In a system with way too many middlemen, the PBMs (and their insurance-company parents) have figured out a way to inject another middleman — this time adding a pseudo-pharmaceutical-marketer between the factory and the wholesaler — that would seem to have no benefit other than allowing additional vertical integration of the supply chain.
I mean, no benefit to most of us. Expanding the Middleman Nation is obviously a huge benefit to PBMs.
** Sounds like a shampoo.
This is a must-read post from Drug Channels Institute that lays out the current state of play around 340B contract pharmacies. The overall conclusion is not a surprising one. There are a lot more contract pharmacies than their used to be … the trend is not abating. But even I was surprised at the size of the growth of contract pharmacies linked to PBMs. The relationships between PBMs-owned retail and specialty/mail-order pharmacies has absolutely skyrocketed in just the past four years. (It’s the last chart in the post.) Yowsa.
I don’t know what the legal impact will be of the lawsuit that alleges that J&J did a terrible time picking a PBM and a drug-benefit plan for its employees, but it’s a great object lessons in the danger of assumpting that big PBMs are automatically an employers best friend. SmithRx founder Jake Frenz goes deeper on this thinking in a STAT First Opinion today.
States really want the ability to regulate PBMs more closely, so a group of 32 attorneys general are throwing in with a legal effort to overturn an appeals court decision that ruled federal law preempted the ability of Oklahoma to add new guardrails around PBM behavior.
Patients for Affordable Drugs is using its platform to press for lower prices for cell and gene therapy in this Managed Healthcare Executive video, raising the specter of gene therapies “bankrupting” states. Unsuprirsingly, I disagree with this line of reasoning, and I’m flagging it here so I can make a point: the true danger is around gene therapy is not that they’re going to be overused and bankrupt states. The real danger — based on what’s happening in the real world — is that they’ll be underused, investment will dry up, and the most revolutionary medical technology of the new millenium will be rendered commercially unviable. That’s what keeps me up at night.
