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ON LOOP/ A Video About 340BLTs
The first step in getting to a more sensible 340B program is getting people to understand how 340B works. That is a challenge. The program is not particularly intuitive. But while I was hoarding foreign-made goods last week (got to beat the tariffs, y’know), I hit upon a metaphor.
It’s goofy. It involves mayonnaise. It involves me stepping out of my comfort zone.
But if you find it useful in explaining what’s going on, please share.
If you’re too hip for LinkedIn and want to amplify elsewhere, here’s the TikTok.
INFLECTION POINT/ Trump Administration Walks Away from Medicare Coverage of Obesity Meds
The Trump administration will not move forward with a Biden-era plan to cover obesity medicines under Medicare.
This received a lot of coverage, but it doesn’t feel like much of a surprise. Moving ahead would have been expensive — really expensive — at a time where government investment in anything, no matter how valuable, is being treated as a moral failing. Plus, the HHS secretary doesn’t like GLP-1s.
So this was doomed to fail.
That doesn’t mean that it’s not the right idea. People who believe in value-based health care should line up behind this kind of effort. Indeed, Zeke Emanuel, who is not traditionally closely aligned with the pharmaceutical industry, called it a “big mistake” on LinkedIn. And Alison Sexton Ward and Dana Goldman from USC nailed that point in a WaPo op-ed this morning.
The value-based argument is two-fold. First, Medicare spends a ton of money on expensive interventions that don’t yield much, and a sensible payer would work harder to reject low-value care and replace it with efforts such as obesity meds, which are higher-value care.
Second, part of the challenge with obesity meds is that the financial benefits they’re likely to deliver occur far in the future. Dropping 10% of your body weight today probably isn’t going to change your health care spending meaningfully tomorrow, but a decade from now, you’ll probably be far cheaper to insure.
That’s a challenge for commercial insurers. But Medicare is going to have 65-year-olds for the rest of their lives. If any payer is going to benefit from the long-term trade-off, it’s probably Medicare.
I suspect we’re not done with this. There are a lot of moving pieces. Prices are coming down. Physicians are figuring out the adherence element. We’re a year and a half away from price-controlled Wegovy.
There’s still plenty of opportunity for this to break the right way. It’s just not happening right now.
QUICK TURNS/ More Obesity Cost Concerns, Plus New Research on Prevention Costs and Biosimilars
Speaking of obesity, the Associated Press has a piece on state-level concerns about providing the medicines under Medicaid. My general comment on this subject applies here, too: The budget impact is real. So is the value. This is exactly the kind of thing society needs to get better at resolving. But I’m not sure that grappling with big, complex tradeoffs is really what American society is good at circa 2025.
I can’t tell if this new JAMA Forum paper from Harvard’s Amitabh Chandra and Chicago’s Katherine Baicker is bashing employee wellness programs, encouraging a looser economic standard for prevention efforts, or both. It’s worth noting, regardless, that the authors seem to have a pretty narrow definition of what constitutes value. (Hat tip to Frank David for flagging the paper … and the thinking on value.)
While we’re talking new papers, here’s a good one from the lab of Vanderbilt’s Stacie Dusetzina that finds that state-level biosimilar interchangeability rules do impact utilization.
Again, the machinations of the FDA are of great interest to me personally but not super central to this newsletter. Still: This WSJ interview with ousted FDA biologics head Peter Marks is all anyone was talking about this weekend.
Here’s a STAT interview with a big-time biotech investor, which includes this quote: “The later-stage stuff, I think, is getting screwed, and the super early-stage research is getting screwed.” If you talk to insiders, there is an emerging consensus that the IRA is already warping decisions about drug development — especially the early-stage decisions — in a bad way, so this comment only underscores that this is becoming conventional wisdom.
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.
