Digging Even Deeper Into the Treasure Trove of the Cassidy Report on 340B

Thing I learned yesterday: Shel Silverstein wrote “A Boy Named Sue.” I had no idea.

REBOUND (1)/ More Cassidy 340B Reactions, More Cassidy 340B Angles

I was one of those terrible geeks who had read the whole Game of Thrones series before the HBO show started, so friends would occasionally ask me, “So, what’s the story here? What’s this show about?” 

And I’d stand there, staring at the sky, gathering my thoughts, rendered speechless by the challenge of trying to summarize the complexity of a half-dozen books and a million characters. Where to start?

Anyway: I feel the same way about the Cassidy 340B report. We toplined it yesterday, but there are a paralyzing number of subplots. Where to start? 

Here’s one approach: 

One of the more illuminating parts to me was the way that the report started to tease apart the money that contract pharmacies/third-party administrators/PBMs are taking out of the system. 

This chart, showing the fees CVS collected, is especially wild to me: A billion dollars over three years in fees (not counting the dollars for actually dispensing the scripts)? This feels like a lot of money to be sloshing around a program designed to improve care for the poor. 

Nailing down exactly how much of the 340B dollar flows to for-profit entities has always been something that’s required a lot of guesswork, and Cassidy’s report makes that whole world suddenly less opaque … and, perhaps, more concerning. 

***

There was a lot of commentary on the Cassidy report out yesterday.**

Fierce has quotes from PhRMA and 340B Health. 340B Report has comments from two of the drugmakers included in the report (J&J and Amgen). 

But my favorite statement is this one from AHA, which makes me wonder if I was reading the same report as the hospitals:  

Um. I’m not sure that’s what the report demonstrated … 

** Lots of commentary, but not a lot of media attention. Yes, there was some good trade coverage (Fierce, Endpoints) and a small amount of bare-bones inside-the-Beltway stories (e.g. Axios). But beyond that, it was pretty quiet. 

REBOUND (2)/ CEOs Are Talking

I wrote some on earnings yesterday, but the conference calls — which I didn’t capture before hitting “send” — were packed with great commentary. 

• Pharma economics are just weird. Here is a real quote from Merck CEO Rob Davis yesterday: “As a reminder, we lowered the list prices for the Januvia family of products in the US at the beginning of 2025. The lower list prices reduced the rebate amount our company pays to Medicaid. As a result, we expect higher net sales for these products in 2025.”
  
  List prices go down so that net prices can go up. I know that you all understand this dynamic, but still …

• Speaking of the Merck call, Davis also addressed concerns over the difference in prices between the U.S. and Europe. Here’s Fierce’s story on that.

• And good stuff from the BMS call on that topic, too. Here’s CEO Chris Boerner:
  
  “With respect to ex-U.S. net prices, we actually agree with the administration. Countries outside of the U.S. need to be allocating more health care spending to innovative medicines. … In terms of the U.S. pricing environment, I think our perspective really is unchanged here. We have to address the complexity of the U.S. health care system. 65 cents of every dollar spent on pharmaceutical products in the U.S. goes to middlemen. These are entities that don't discover, develop, or deliver medicines to patients.”
  
  That’s just a piece of a larger answer -- which touches on 340B -- but it’s clear CEOs are ready for this topic.

• Here’s Sanofi’s Paul Hudson touching a lot of bases: “The executive order from last week was reasonably explicit in its intensity. It stepped back a little bit from most favored nation, stepped forward a little bit into what it means for patients and what it could mean for out-of-pocket, and importantly, brought in 340B and PBMs into that narrative.”

QUICK TURNS/ A CMS Ghost Link and a Bizarre New Campaign from PCMA

So this is interesting: CMS has updated its webpage on “negotiations” and price controls with some details on the plumbing of how the “maximum fair price” will be implemented:

The word “here” has a hyperlink … but it’s to a broken page. Very 2025. Sigh. 

ELSEWHERE:

• I don’t get this new PCMA “ad campaign” at all. PCMA is trying to get pharma companies to take down the list price of medicines? That’s what PBMs think the problem with affordability is? The only reason anyone is subject to the list price is because PBMs set up benefit designs connected to list price.
  
  And where pharma companies have pushed down list prices without lowering net price -- think the move from Flovent to an authorized generic -- PBMs have restricted coverage. CMS has gotten tons of feedback raising concerns that PBMs will restrict access to “negotiated” drugs with lower list prices.  
  
  So the whole campaign feels like nihilistic pharma-bashing, not some sort of constructive dialogue. Attacking list prices doesn’t solve any underlying issues.

• Holy moly, is Alzheimer’s ever an expensive disease. New government-funded data from the USC Schaeffer folks suggests the economic toll is close to $800 billion.

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].