Let’s Get Horizontal. Arkansas just passed a law banning pharmacy benefit managers (PBMs) from owning pharmacies in the state. Other states like Vermont and New York are considering it. This also includes mail order and specialty pharmacy.
Lately the economics of independent pharmacies are getting covered in the media showcasing how they often lose money on branded scripts. If you own the plan, pharmacy and PBM (vertical integration), it is much easier to move the money around as opposed to an independent pharmacy. Big guys win, small guys lose. // story to Medicare Advantage and Part D but that’s another story, another day. The law goes into effect in January, CVS has announced it will close 20 pharmacies in the state.
If This, Then That. The National Institutes of Health is the backbone of this country’s basic research. But getting from gem to jewel takes additional money and risk, so it isn’t all that surprising that the National Pharmaceutical Council found a decline in post-approval pharmaceutical R&D after the passage of the Inflation Reduction Act. The IRA sets up negotiation for small molecule drugs at 9 years post approval and 13 years for large molecule. This limits the window that additional indications can make additional revenue. At best it is a blip until things shake out in terms of IRA impact, at worst, we have possible indications that will never get Food and Drug Administration approval. The long-term loss is when the drug goes off patent and we don’t have a generic/biosimilar for treatment for that indication. Kudos to NPC for doing this type of research; telling the story of potential unintended consequences through data is so important.
A Little Jab will Do Ya. JAMA published research on the use of preventive services. The research found that ~30% of people with employer-sponsored health insurance used a no-cost preventive service with screenings for cervical cancer, hepatitis C and HIV topping the list.
If a Tree Falls in the Forest… Starting this January, Medicare Part D beneficiaries have had the opportunity to enroll in the Medicare Prescription Payment Plan to spread their out-of-pocket costs over the course of the year. Unfortunately, very few beneficiaries have enrolled. Milliman provided the first look at enrollment data and it shows that only 0.4% of Medicare beneficiaries (179,000) enrolled in the program. And while the program isn’t a great fit for everyone, there are a lot more people who it could help. In fact, the Centers for Medicare & Medicaid Services estimate that 2.4 million beneficiaries have high enough cost-sharing that could benefit from the program.
Expectations were low but maybe not this low. I have hope. Education around the program was light and so people may not know about it. A few weeks ago, the Partnership to Fight Chronic Disease released a survey that found that 74% of seniors said they’ve heard little to no information on the program but, after learning about it, almost half of those who spend >$1,000 per year said they would likely use it.
We are in our first year, so fingers crossed that enrollment improves over time and/or the right people find the program if they want to use it. Remember a lot of beneficiaries might have been spending thousands of dollars each month so when the pharmacist said $2,000 and they were done for the year, they might have been okay enough to hand over a credit card and figure it out later. And those who are enrolled do have cost-sharing that suggests that they are the right people in the program.
Learning Something New Every Day. This study in Health Affairs Scholar felt a little, well, scholarly at first. It talks about the variability in savings for Medicare Part D beneficiaries now that there is a Part D out-of-pocket cap of $2,000 for 2025. Which I nodded through because, yes, of course beneficiaries will have different levels of savings because they are on different drugs in different plans, etc. And then there is this line, “And a third, and possibly more, of high-spending beneficiaries will also be unaffected because they already had coverage from Part D or other sources that limit their financial liability to levels below the cap.” My brain sort of exploded. It is mostly retiree private group insurance that wraps around and covers these costs. I mean I should have known – my mom had this – but yet the 1/3 number just knocked me over.
More HHS Fun. Budget rumblings and restructuring plans for the Department of Health and Human Services (HHS) outlined in this Washington Post article.
If you missed it… Senator Cassidy’s 340B report.
