If you haven’t trained your teams on Medicare Part D changes for 2025, hop to it. Or reach out to me. These are January 1 issues and we’re about to hit October….

Let me clear my throat. The STAT news breaking news headline read “Sanders says pharmacy benefit managers (PBMs) won’t penalize Novo for cutting Ozempic, Wegovy prices.” I think I read it 3 or 4 times and then closed my email and took the dog for a walk. There might have been some muttering under my breath. This headline implies so much in what seems like a simple sentence. And yet so naïve.

Let’s backtrack. On Tuesday, the Senate Health, Education, Labor and Pensions Committee held a hearing where the CEO of Novo Nordisk testified. Novo Nordisk is the manufacturer of Ozempic (diabetes)/Wegovy (obesity). The purpose of the hearing was to try make a show of the prices of these drugs in the United States, particularly compared to other countries. And it is true that these drugs are more expensive in the United States than other countries but not nearly by the magnitude that Senator Sanders (I-VT) said. Nor it is fair to say that the drug could be made for $5 and that is what the price should be.

Part of the issue is that list price (the price quoted as outrageous by Senator Sanders) gets discounted and rebated by manufacturers so that PBMs/plans are often paying much less. But patients often pay a copay or coinsurance that can be based on that list price. For example, take a drug that has a list price of $1,000. A patient cost-sharing could be 25% or $250. And the plan get a rebate of 50% ($500) and pay $500 but get $250 in cost-sharing so the plan is out $250. The high price, high rebate means that instead of paying 75% of the cost of the drug, the plan is paying 25%. High cost, high rebate does that.

But let’s say the list price goes down to $500 and there is no more rebate. The patient’s 25% is $125 (a win!) but the plan has to pick up $375. That’s $125 more. PBMs and plans have repeatedly preferred products with high cost, high rebates. Case studies abound in insulins and biosimilars.

PBMs said they won’t penalize Novo if they do this. Oh, well if they said so. What does that even mean? Will they keep their tiering? Cost-sharing? Utilization management? Do they decide the formulary coverage and can they make that promise (it would seem so) or is it up to individual plans/employers/etc?

I know I’m getting a little rant-y. But here’s the other thing that bothers me. There is a lot of talk about how high drug prices are, but the VALUE of these products seems to be pretty amazing. Under $1k/month and people are losing weight, improving cardiovascular health, impacting addictions, and whatever else we find out.

Sure, the price may seem untenable now, but we have so many of these drugs on the horizon and eventually we will have generics/biosimilars. Is this the pricing hill we want to die on — with a set of products that really are innovative? Oh that, by the way, are already have supply shortages. Like massive supply shortages. A friend tried getting Wegovy at CVS in the DC area this week and their choices were one location in DC and one in Alexandria and that was that entire DMV area. I’m stepping off my soap box now and going back to regularly scheduled programming.

Tit for Tat. The Federal Trade Commission filed the suit against PBMs that we were waiting for. Why? Preference for high cost, high rebate insulins that artificially drove prices higher for patients.

Playing the Odds. The Congressional Budget Office released a cost estimate for HR 1352, Increasing Access to Biosimilars. The bill would direct the Centers for Medicare & Medicaid Services (CMS) to implement a demonstration project that would increase Medicare payment rates for biosimilar products covered under Medicare Part B. CBO says that there is only a 50% chance that the Chief Actuary at CMS could say that the demonstration save money and, if it did move forward, chances are it would increase costs. Which makes sense because you’d only use the demonstration authority when biosimilars costs less than the reference product and you’d want to create a little more reimbursement parity so that biosimilars were a little more profitable for providers. But if we don’t support biosimilars, then they won’t exist and that seems like it would cost more in the long run.