Bernie Suggests that PBMs Wouldn't Penalize Novo for Price Cuts. The Reality Is More Complicated

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Most of what transpired between Bernie Sanders and Lars Fruergaard Jørgensen yesterday was preordained and, honestly, kind of dull. Jørgensen’s testimony is here, and Sanders’ report -- soberly titled “Greed, Greed, Greed” -- is here. 

To be clear, dull and predictable is a win for Novo and the industry at large. The shelf life of the “Bernie Sanders is yelling at someone” narrative isn’t that long. 

But there was a nugget that’s likely to stay with me, which was a brilliant stunt by Bernie, which made it into the hearing and the coverage but is detailed most clearly in his report. 

Bernie knew that Jørgensen was going to blame the PBMs, so Bernie asked the three PBMs a simple question: if Novo was to bring the list price down to the net price, would the “price reduction by itself result in less favorable formulary placement for Ozempic and Wegovy.”

And all three PBMs said, unequivocally, “no.” 

This was Bernie’s big gotcha moment. (And, in his defense, Jørgensen played it pretty well, expressing genuine surprise and pledging to explore the option.)

But holy moly, there are red flags all over the place. 

First, Bernie conflated Ozempic for diabetes, where there is already fairly widespread coverage and everyone seems content with access, and Wegovy, where there is neither coverage nor contentment. So the question is creating an apples-and-oranges issue straight off the hop.**

Second, Bernie asked specifically about formulary placement, not coverage. In the case of Wegovy, the controversy isn’t about tiering. It’s about whether the medicine is accessible at all. Maybe I’m being overly sensitive to semantics here, but I’m left wondering if Bernie gave the PBMs an escape hatch. 

Third, this really isn’t a question for the PBMs. It’s a question for their clients, the employers and health plans. I can’t imagine a world in which, given a choice between a high-list product (with rebates) and a low-list product (without rebates), a health plan would ever take the low-list option, assuming the net prices*** were equivalent. Neither of the health plans that Bernie cited even hinted that they’d boost coverage if list were lowered to the net level.**** 

Fourth, we have a great example of what happens when this exact scenario plays out in the real world. Insulin manufacturers have, over the past decade or so, have worked to introduce a number of low-list products, and PBMs have made that process as difficult as possible. It’s detailed incredibly clearly in the FTC lawsuit (start reading on page 22). 

I’m not saying that the PBMs aren’t being truthful, only that there’s a good chance that the answers are narrowly tailored to the question and wouldn’t necessarily lead to real-world changes. 

Of course, it’s not like we got this level of discourse from the hearing. Because it’s all a circus. Back to the popcorn. 

** This is most evident in the state of North Carolina’s response to Bernie’s questions, in the appendix to the report. The state treasurer said that OF COURSE the state health plan would welcome an effort to pop the gross-to-net bubble … for Ozempic. The absence of a similar pledge around Wegovy is a tell. 

*** To state the obvious, there is no single, public, agreed-upon “net price,” so a lot of this whole discussion is based on a fantasy-land version of the drug supply chain where these numbers are consistent and widely known. Not the case. Probably makes it easier for PBMs to make commitments, knowing that any effort to move this discussion to the real world is going to create all kinds of loopholes. 

**** Bernie also asked about coverage decisions if the medicines all listed for $100, but that’s a ridiculous hypothetical, so I’m not going to waste the pixels.

Once again, there’s some triage going on today. There’s more to say about the hearing, I still have some commentary bubbling based on other interesting links I’ve seen over the past week, and we have some launch price data. I’ll tackle those in the next few days. Professional obligations call! 

I did want to take a moment to flag one piece today that I think is a well-executed summary of patient concerns about access issues related to the IRA’s price controls. The piece comes from Mellanie True Hills, the leader of StopAfib.org. 

She has far too much first-hand experience with what can happen when a payer decides to lean into utilization management, and she’s concerned that the IRA creates all of the wrong incentives for PBMs. Worth the read.

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