Another Day, Another Example of 340B Abuse Featured in a National Newspaper

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INFLECTION POINT/ 340B In the Land of Oz

340B is having a moment. In the past three months, we’ve seen three stories from the three most important national newspapers outlining the subtle ways that the program is being abused. 

The New York Times had its piece on Apexus, the Wall Street Journal took on the middlemen directing 340B prices to employers, and now the Washington Post is on the record with a piece about a Mehmet Oz-associated enterprise that looks and feels a lot like the companies that the WSJ profiled. 

The Post article is very Post-y, focused on the potential conflicts of interest that might be posed by Zorro Rx, a firm that appears to be run by Oz’s son and once counted Oz the elder as a co-founder. What Zorro Rx does is not crystal clear: no one associated with the company spoke to the Post and the website isn’t exactly explicit on how everything fits together. 

But it sure seems like it follows an increasingly popular template: Work with employers to drive employees to hospital systems for telehealth care and then 340B meds, profiting off of the symbiosis. At best, the arrangement is “abuse.” That’s not my word. That’s how Shawn Gremminger of the National Alliance described it to the Post. 

If you want to give Oz the benefit of the doubt, it’s not clear this is a real company. I don’t see any evidence that there are, you know, paying clients. (Maybe I’m wrong on this, and if you know more, please hit me up.) 

But that’s not really a good reason to dismiss the story. The reality is that people who understand the health care system at a deep level are looking at 340B and seeing a geyser of money that can be tapped without a whole lot of oversight. 

No, wait. Scratch that. We’re actually seeing a lot more oversight. 

Unfortunately, it’s coming from the press, not the actual people in charge of overseeing the program. But I’ll take what I can get. 

QUICK TURNS/ Amvuttra Pricing, UK Regulation, and the Danger of the Ivory Tower

The wages of travel is an overfilled inbox, and I spent some quality time this weekend going through everything I missed while I was on the road. Here’s what broke over the weekend, along with some items that slipped through the cracks last week.

• Alnylam won an expanded indication for Amvuttra, its drug for ATTR. The med will now compete in the larger -- and more competitive -- cardiomyopathy space. It’s not a new drug, so it’s not included in my broader analysis, but it’s worth mentioning that Alnylam acknowledged in its analyst presentation that it was maintaining the price (it’s far higher than other ATTR-CM meds) but that it expects it “will decrease net price over time as patient uptake increases.” 

• Sometimes, academics are accused of being out of touch with the way the real world operates, and this STAT op-ed is a good example of why. It proposes philanthropy as the solution to R&D funding ills while appearing to ignore the fundamental risk-reward tradeoff that goes into biotech. And that’s leaving aside the really weird parts of the piece that cast industry as some sort of anti-development villain.

• I missed the dustup last week over how medicines are priced in the UK. It’s all fairly byzantine, but the upshot is that the government has the ability to claw back a certain percentage of revenue if overall spend gets too high, and that’s been happening way more than expected, leading to a backlash of sorts. This FirstWord story is better than the Reuters version. All of this is extra noteworthy because the government and industry just had this exact confrontation two years ago, and the compromise forged at that time is already non-operative (as they say).

• Also triaged was this STAT piece about how rural hospitals aren’t using a special designation designed to steer them millions. That’s happening, in part, because the “emergency designation” would cut off access to 340B prices, and there is pretty much no amount of federal money that can convince a 340B hospital to walk away from those discounts. 

• In addition, I had bookmarked this Biospace piece on GLP-1s and PD-1s on Wednesday. The piece presents the two classes as analogs, and if there is one thing I love, it’s drawing analogies between meds. That’s some meaningful percentage of my consulting business!
  
  But I just can’t get behind the idea that PD-1s (perhaps the highest-spend class right now) shares a lot with GLP-1s (the high-spending class of the future). There are a lot of factors that prevent price competition in cancer meds, and I don’t think those factors will hold for GLP-1s. PD-1s are a shining example of how the status quo works. GLP-1s: not so much.

• It is a given that the IRA is going to screw up the marketplace for standalone Medicare Part D drug plans by pushing more costs to the plans with few options -- other than higher premiums -- to deal with those costs. But the non-cost implications of that haven’t been explored as closely. This Health Affairs Forefront piece begins to pick apart at what happens to the patient experience as seniors are forced off of plans that they understand into more uncharted waters. It’s a good reminder not to forget about the person at the end of the chain.

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 [email protected].