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This is big week for meaningful survey data. Not garbage election polls, mind you, but serious looks at specific health topics that give us a glimpse into where things are going. Yesterday, it was the Ipsos “Patient Experience Survey.” Today, it’s the National Alliance of Healthcare Purchaser Coalitions, which took the temperature of 188 employers on health care costs.
You should click through the whole thing, which gives insight into everything from obesity meds to biosimilars. There’s also a ton on where employers would like their PBM services to go.
But before I get there, a brief reality check is warranted: The employers that responded to the National Alliance survey are worried about drug costs. Ninety-nine percent of them said that drug prices were a “significant threat” to affordability. Hospital prices came in at 79%. Consolidation was 54%.
“Drug prices” is a fairly large catch-all concept, but the fact that medicine costs is a universal concern can’t be hand-waved away.
Still, the answer to controlling drug costs is, in part, a factor of better managing drug benefits. And employers have a lot of ideas on how they can do that better. And most of those ideas involve flipping the script with PBMs, demanding better service.
A narrow majority of employers are ready to jettison their PBM, and the survey makes clear what those employers are looking for: full disclosure of all revenue streams (25% of employers have this now, another 61% want to put it in place) and a better definition of “rebate” to include fees and the like (30% have it, 58% want it).
It’s that rebate piece that’s most interesting. The survey found that companies that use a value-based formulary, as compared to one driven by rebates, “are nearly three times more likely to have lower spending than average.”
Caveats abound.
It might be that even though value-based formularies are seen as leading to lower spending, it’s still not what employers, in their heart of hearts, actually want. (I’m referring here to the Adam Fein “alternative (but admittedly evil) hypothesis” on health plan decision-making.)
And the big PBMs are fully capable of delivering value-based formularies, so I don’t want to suggest this is some sort of dark warning to those dominating the market. (Indeed, the big-PBM response to the survey, as recorded by Axios, is essentially, “Eh, our customers seem pretty happy.”)
Still, it sure seems like a big chunk of employers increasingly understand what’s going on here.
This is useless: CMS’ Meena Seshamani has a STAT op-ed explaining how the process worked for the first 10 IRA “negotiations.” It had exactly zero details that haven’t already been made public, and it includes exactly zero insight on how, exactly, CMS came up with prices. If you have a cynical bent, this is probably a preview of how detailed the agency will be in disclosing its thinking next year, as required by the law.
I flagged this LinkedIn poll on 340B from Rep. Jake Auchincloss last week, and it’s worth peeping the results. About 75% of those who voted said that Congress is the group that is going to catalyze reform. I think that’s the right answer, even though I recorded a protest vote of sorts, and it means that we’re in for a long slog.
Speaking of stuff from last week: I spent some time knocking down as useless a new analysis from a PBMs that suggested GLP-1 weren’t delivering on their promise. But the analysis was even more useless than I originally thought: it seems to have been driven in part on list prices, which is not remotely the right way to look at things. The conclusion of the analysis noted that “per individual starting a GLP-1 for obesity without DM, expect a two-year $11,200 investment at standard drug prices, prior to discounts …” Again, we need to have a sensible discussion about these costs, and this kind of slight of hand makes that a lot more difficult.
We’re going to get two hours of appeals court arguments tomorrow on three of the IRA appeals: those for J&J, BMS, and AZ. There’s a certain level of fatigue around this stuff, and the consensus remains that the constitutional issues at the heart of these cases are long shots. Still, it’s hard to dismiss the possibility that a shot on goal, even a tough-angle shot, could end up in the back of the net.
Overviews of the Harris/Trump positions are old hat and particularly unhelpful for people who follow things as closely as Cost Curve readers do, but this Biospace effort was well above average for that kind of thing.
Howard Dean is writing 340B op-eds for Real Clear. I don’t know what juice Dean has (and I’m unconvinced that Real Clear pieces are driving any conversations), but he has the right arguments, and every bit of awareness helps.
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