Bombshell FTC Lawsuit Against PBMs
The Federal Trade Commission (FTC) unveiled a bombshell lawsuit against the Big 3 pharmacy benefits managers (PBMs) – CVS’ Caremark, Cigna’s Express Scripts, and United’s OptumRx – charging that the PBMs have used formulary placement and rebates to rig the system and disadvantage the American public at the point of sale. The FTC says that the PBMs use the formulary and rebate scheme to line their pockets and to attract business, leaving diabetics dependent on insulin with high prices and often an inability to pay.
Now I have defended PBMs in the past for some of the good they do. I believe the brand drug makers are the real culprits in the drug pricing problem in America. But I also welcome the lawsuit as we need to change the drug price paradigm. Yes, prices are the main culprit and brand drug makers shoulder that blame. But the perverse rebate system also creates high prices, perverse incentives, a lack of transparency, and often means consumers get little or no benefit of discounts at the point of sale. It also materially impacts the adoption of generics and biosimilars in the market. Those rebates are kept by the PBM, health plans, or employer group clients.
In his years at the White House, Donald Trump had proposed eliminating rebates by changing the anti-kickback statute. While there are pros and cons to doing so, I wonder if the time has arrived to go this road. The current construct can no longer be countenanced.
I am a little disturbed by the sole focus on PBMs as the culprits here. Certainly, brand drug makers bear as much blame here. I do not think the so-called manipulation of the market and anti-competitive behavior is limited to the PBMs, although much of it appears to have begun with exclusionary formularies more than a decade ago. The FTC did put brand drug makers on notice they could be next, but should the FTC have waited if they were not ready to file against the brand drug makers?
I would say that the FTC faces an uphill fight to win given the posture of courts of late. But change needs to happen. The suit alone will shine a new light on the PBM transparency movement and usher forward reforms from Capitol Hill.
There is also the question of corporate responsibility. While some companies have done so, why aren’t more companies demanding in their PBM agreements that rebates get passed through at the point of sale?
PBMs and brand drug makers should get ready for the brave new world of antitrust lawsuits and activity. I think a Harris administration will be very active on this front and a Trump administration may be more active than in the past as well.
Additional articles: https://www.fiercehealthcare.com/payers/ftc-formally-sues-pbms-over-insulin-prices-and-warns-manufacturers and https://www.beckershospitalreview.com/legal-regulatory-issues/ftc-sues-nations-3-largest-pbms-10-notes.html and https://www.managedhealthcareexecutive.com/view/ftc-sues-pbms-for-artificially-hiking-insulin-prices
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#pbms #drugpricing #branddrugmakers #ftc #antitrust
https://www.modernhealthcare.com/legal/express-scripts-optum-cvs-caremark-ftc-complaint-insulin
Docs Again Left At The Altar By Congress
You often don’t hear this from me but — poor docs. They constantly get left at the altar by Congress. I think it has been decades now that Medicare docs have not had a reasonable and permanent formula to get paid. They constantly get cut and get a temporary reprieve – it is no way to run Medicare or a physician practice.
Representatives that are members of the House GOP doctors caucus predict that at best docs will get a temporary reprieve from the 2.9% cut that the Centers for Medicare and Medicaid Services (CMS) recommended for Medicare fee-for-service (FFS) program rates.
Everyone understands that it will cost money, but the current construct does not work. It leads to consolidation of practices and the purchase of physicians by hospitals, health systems, and other corporate entities. This causes increased costs elsewhere in the system as their new employers urge docs to change their practice patterns to more costly places of service. So maybe it really won’t cost as much as we think.
At any rate, docs deserve better, especially as we enter the looming healthcare staff shortage. What message are we sending? When will lawmakers get a backbone and prioritize this crisis?
In other news, some lawmakers are looking to expand pharmacists’ ability to administer and prescribe tests, treatments, and vaccinations.
Additional articles: https://insidehealthpolicy.com/inside-drug-pricing-daily-news/bucshon-hopes-attach-pharmacist-reimbursement-bill-lame-duck-package
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#providers #reimbursement #rates #medicare
CMS Will Issue Regs For Hospital Cybersecurity
Criticized for its lack of a cyber plan and slow-witted response to the Change Healthcare cyberattack, the Centers for Medicare and Medicaid Services (CMS) will issue regulations requiring hospitals to build basic systems and adopt processes that reduce the likelihood they will be victims of a cyberattack. CMS also plans to issue regulations related to healthcare clearinghouses.
While it says it will work with the health insurance industry to promote cybersecurity resilience, the feds still have no plan. What’s more, while some hospitals are well-healed, other hospitals and providers do not have the resources, expertise, or finances to get to where they need to be on cybersecurity. The nation needs a comprehensive plan from CMS and funding to protect the nation. CMS’ plans are half-hearted.
(Article may require a subscription.)
#cybersecurity #hospitals #providers
https://www.modernhealthcare.com/policy/cybersecurity-plan-data-breaches-cms-jonathan-blum
Private Equity Firms Having Trouble Selling Physician Groups
Private equity firms are struggling to find buyers for physician groups. This is caused by interest rates, lower valuations, increased oversight and financial pressure, and tougher regulations at the state level. This is not all bad for healthcare. Private equity is blamed for some devastating impacts on entities that were acquired, including Steward Health Care.
(Article may require a subscription.)
#privateequityfirms #healthcare #manda #acquisitions
https://www.modernhealthcare.com/providers/private-equity-firms-physican-groups-mergers-buyouts
UnitedHealth Group Had To “Start Over” On Change Healthcare Systems
UnitedHealth Group has told a prominent tech publication that it literally had to start over in rebuilding the Change Healthcare infrastructure that led to the biggest cyberattack in healthcare history. The real question to ask is how the largest healthcare company in the nation could have so missed the mark on security all these years. The publication will be exhibit #1 in the myriad of lawsuits from providers and others terribly damaged by the cyberattack.
#changehealthcare #cyberattacks
Terrible Advice For MA Open Enrollment
Former healthcare executive Stacy Mays is urging Medicare beneficiaries to opt for traditional Medicare over Medicare Advantage (MA) this open enrollment season. Mays views MA as too volatile right now.
While she may be well-intended, it is terrible advice. Yes, we will see major benefit reductions and premium hikes. Folks in rural areas will need to be very cautious given some high-profile provider terminations of MA plans. But a blanket recommendation to avoid MA is just wrong-headed. The program will remain vibrant in most areas. While things may cost more in MA, it certainly beats the traditional Medicare fee-for-service (FFS) program, especially if you cannot afford a supplement plan.
#medicareadvantage
New Employer Survey Sees Healthcare Costs Increasing
As with other surveys, the 2025 Segal Health Plan Cost Trends Survey says employers expect drug costs to increase an average of 8% in 2025. Price inflation and GLP-1 adoption are two major factors. Outpatient prescription drugs are expected to increase 11.4%, up from a robust 9.9% last year.
#drugpricing #employercoverage
Healthcare Will Be Issue in Swing States
I have argued that healthcare will be an issue in swing states. BMA says that protecting Medicare, including Medicare Advantage (MA), is the top issue for senior voters in the key battleground states of Pennsylvania and Michigan. About 84% of seniors in both states rate the issue as “very important.” A supermajority of seniors in both states say protecting MA would motivate their vote in November, — 90% of senior voters in Pennsylvania and 89% in Michigan said so.
#healthcare #medicareadvantage #medicare #election2024
https://bettermedicarealliance.org/news/battleground-poll-protecting-medicare-top-issue-seniors/
KFF Reviews NC Plan To Retire Medical Debt Through Medicaid
The Kaiser Family Foundation has a good briefer on North Carolina’s Medicaid waiver to incentivize hospitals with enhanced Medicaid payments to relieve up to $4 billion in existing medical debt for nearly two million people. The program would also prevent future medical debt.
#kff #medicaldebt #nc
https://www.kff.org/policy-watch/north-carolinas-effort-to-relieve-medical-debt/
— Marc S. Ryan
