January 14, 2025

Outgoing Biden FTC Fires Another Shot At PBMs

CVS Caremark, Express Scripts and OptumRx – the Big 3 pharmacy benefits managers (PBMs) — dramatically mark up specialty generic drugs to affiliated pharmacies, according to a new report from the Federal Trade Commission (FTC). This is the second of two scathing reports.

The FTC analyzed 51 specialty generic drugs from 2017 to 2022 and found that the PBMs’ affiliated pharmacies acquired $7.3 billion in excess revenue when compared to the National Average Drug Acquisition Cost (NADAC), an estimate of what it costs a pharmacy to acquire a drug. Further, the report says the conclusion could be an underestimation.

PBMs generally defended themselves by saying that the report is misleading because it is based on a subset of drugs, that clients not PBMs choose networks, and they bring many savings to the system. But the report does show that PBM-affiliated pharmacy dispensing revenue increased at an annual growth rate of 42% from 2017 to 2021. Further, the top 10 specialty generic drugs generated more than $6.2 billion of dispensing revenue in excess of NADAC.

The report is sure to lead to further concerns on Capitol Hill regarding vertical integration of big healthcare and the non-arm’s length agreements that occur within the big integrated companies. The commission voted unanimously to release the report. The incoming chairman under Trump is on the commission today and voted for release. He supports ongoing investigation of PBMs.

The report also showed that the PBMs earned $1.4 billion from spread pricing, or when PBMs bill plan sponsors more than they reimburse pharmacies. Banning spread pricing could occur in 2025 on Capitol Hill. It almost passed in 2024.

Additional articles: https://www.modernhealthcare.com/politics-policy/cvs-caremark-express-scripts-optumrx-drug-markups-ftc-report and https://www.beckershospitalreview.com/pharmacy/ftc-finds-top-3-pbms-inflated-drug-prices-by-7-3b.html and https://www.healthcaredive.com/news/ftc-second-pharmacy-benefit-manager-report-caremark-express-scripts-unitedhealth/737249/ and https://thehill.com/homenews/administration/5083218-trump-greenland-denmark-ozempic-tariffs/?tbref=hp

(Some articles may require a subscription.)

#pbms #drugpricing #ftc #anitrust

https://www.fiercehealthcare.com/payers/ftc-big-3-pbms-generated-73b-specialty-generic-drug-markups

Tariffs Could Impact Ozempic Price

President-elect Trump’s threat to place tariffs in general on goods as well as his specific to levy tariffs on Denmark if it opposes his plans on Greenland could disrupt the export of and increase the cost of GLP-1 weight-loss drug Ozempic. Ozempic costs in excess of $1,000 per month on a list basis. A tariff could drive the price higher. Compounded versions continue to be available right now.

Showing the outrageousness of the price and how foreign brand drug makers are living off of U.S. consumers, Novo Nordisk was estimated to be responsible for half of Denmark’s gross domestic product growth in 2024.

#glp1s #weightlossdrugs #branddrugmakers #trump

https://thehill.com/homenews/administration/5083218-trump-greenland-denmark-ozempic-tariffs/?tbref=hp

HHS Releases AI Strategic Plan

The Department of Health and Human Services (HHS) released a strategic plan on artificial intelligence last week with short- and long-term goals for medical research and discovery, medical product development, healthcare delivery, human services delivery, public health, cybersecurity and critical infrastructure protection, and internal operations.

AI innovation will be promoted via grants to support research on best practices, federal programs, and publication of information to help organizations decide how to invest in AI.

HHS says it may require healthcare organizations to form internal committees to assess how AI is being deployed in their organization. It also may set minimum standards for AI risk assessment.

#ai #regulation #healthcare

https://www.fiercehealthcare.com/regulatory/hhs-new-ai-strategic-plan-promises-increased-guidance-and-funding

House GOP Floats Trillions In Healthcare Cuts

House Republicans are floating $2.2 trillion in Medicaid cuts, which includes:

  • Medicaid work requirements
  • Per-capita caps
  • Elimination of enhanced federal funding for the Medicaid expansion population
  • Reversal of the Biden administration’s eligibility rule
  • Rolling back the enhanced Affordable Care Act credits
  • $46 billion in savings from recapturing excessive premium tax credits or requiring people to repay a larger amount of any subsidy overpayments
  • $55 million in savings by funding cost-sharing reductions instead of excessive premium subsidies in the Silver plan

In Medicare, the House GOP proposes:

  • Site neutral payments
  • Medical education and uncompensated care reform

It also wants to dismantle much of the Inflation Reduction Act (IRA).

The GOP would also attack fraud, waste, and abuse as well as reverse regulatory burdens.

See my blog on possible cuts: https://www.healthcarelabyrinth.com/what-could-healthcare-spending-cuts-look-like/ .

(Article may require a subscription.)

#healthcare #cuts #medicaid #medicare

https://insidehealthpolicy.com/daily-news/house-budget-republicans-float-medicare-medicaid-aca-cuts

Public Citizen Wants To Eliminate MA

The leaders of the non-profit watchdog Public Citizen want a seat at the table for the Department of Government Efficiency (DOGE) commission to ensure consumer voices are heard. Public Citizen also wants to eliminate Medicare Advantage (MA), which it says could save $83 billion and rising due to overpayments. Trump is unlikely to give them a position. The Republicans like MA. Public Citizen’s overpayment amount is simply wrong.

(Article may require a subscription.)

#medicareadvantage #doge #healthcare

https://insidehealthpolicy.com/daily-news/public-citizen-seeks-seat-doge-commission-wants-cut-medicare-advantage

Wakely Unveils Brief On The Impact of The Final 2026 Federal Actuarial Value Calculator Updates

See Wakely’s brief on the impact of final 2026 federal actuarial value calculator updates, which is a critical tool in designing Exchange benefits.

#exchanges #aca #obamacare

https://www.wakely.com/blog/impact-of-final-2026-federal-actuarial-value-calculator-updates/

— Marc S. Ryan

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