Hoo Boy, What a Day: An FTC PBM Report, NYT Goes Deep on 340B, #JPM25 Stuff, and More

So. Much. To. Cover. Today.  

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You should probably stop what you’re doing right now and read this New York Times investigative piece on the 340B program. 

It’s a great piece of journalism for a couple of reasons. 

First, it does a good job of explaining what 340B actually is to a lay audience. After a compelling anecdote to introduce the piece, the NYT’s Ellen Gabler drops this paragraph of exposition:

In 75 words, she captures like 90% of the whole gist of 340B. Impressive. 

Second, it pulls back the curtain on a specific part of the 340B ecosystem -- Apexus, the federal grantee that oversees the program -- in a way that makes clear what the problems are with both Apexus and with the program as a whole. 

Apexus comes off as a company that built on the idea that all program growth is good growth, and the piece details all of the ways that the company sought to monetize an ever-larger 340B ecosystem. 

And by illustrating that, the article gets at both the fecklessness of the government oversight and the reality that 340B is -- for a huge swath of the health care system -- just a money grab. 

It’s hard not to read the NYT piece and fail to conclude that this is program due for a hard look and some serious reform.

***

While we’re on the subject: Remember the lawsuit filed by a handful of pharma companies against a random clinic in Nevada that was signing up for-profit private practices -- largely in oncology and rheumatology -- declaring those practices “subgrantees” under a sexually transmitted disease program, and securing 340B prices for those practices?

Well, HRSA has told the clinic, Sagebrush Health, to knock it off. It turns out that some abuses are beyond the pale, even for HRSA. Hat tip to 340B Report. (And put a pin in this. I hope to come back to the topic on a saner day.)

Last week, 46Brooklyn’s Antonio Ciaccia posted a legal filing in the case of the big PBMs against the FTC. The motion was a request asking the judge to force the FTC to send along “all communications” with Antonio. 

Antonio joked on LinkedIn about the PBM obsession with him. I posted a Mean Girls gif in the comments. 

Yesterday, it became clear why the big PBMs are so keen to go after the FTC/Ciaccia connection: the agency dropped its second report on PBMs, voting unanimously to push it out. 

The report focuses on specialty generic drugs, which are frequently marked up by obscene amounts. (How obscene is “obscene”? The FTC said that 22% of the medicines it examined were marked up by 1,000% or more.)

This idea is not particularly novel: Antonio has been banging this drum for years, joined, recently, by Mark Cuban. (The PBMs would like to see FTC communications with Cuban, too). But the practice of specialty markups is indeed fairly egregious, and -- per the FTC -- fairly common. 

What’s more, the FTC accused the PBMs of trying to steer those marked-up scripts to their own pharmacies, pocketing even more of the dollars. The community pharmacists are not amused. 

The PBM industry has largely taken the tack some drugs don’t drive much (if any) revenue for a PBM, markups on specialty generics help fill that hole, and that this is all arguing about a small slice of a broad, integrated business. The WSJ does a good job of getting broad comment here.

As with all of this stuff, you’re best off reading the source material. If you’d rather not -- and, let’s face it, this week is pretty nuts -- just open the document and look at the pictures, which make a compelling case all by themselves.

Here are the #JPM25 highlights. I’m skipping a lot of he vaccine stuff, not because it’s not important, but because a) it’s all fairly predictable, and b) it’s not clear what exactly the enemy looks like, policy-wise. 

Anyway … here are some bon mots: 

GSK’s Emma Walmsley opted to highlight threats to the IP system and PBM reform:

Sanofi’s Paul Hudson bragged about his company’s low exposure to the IRA and had the only reference to 340B that I heard (let me know if there were others!):

And Lilly’s David Ricks hit PBM reform and coverage of anti-obesity meds hard. But what caught my eye was the framing of the IRA:

• This is a fascinating poll by Gallup that looks at people’s expectations around drug policy efforts under the Trump administration. The topline findings are interesting enough -- most Americans don’t think there will be much action on health in the next four years -- but the breakdown by party is just wild. It’s no longer particularly insightful to say that everyone looks at issues through the lens of their own partisanship, but the spread between Dems and Republicans continues to astound me.

• I talked some yesterday about oversimplified metrics to assess launch prices, and Adam Fein reminded me that he’s done a great analysis of this topic in the past. Required reading if you’re into the topic and a reminder that I should play around with patient-population weighting. 

• The NIH issued rules governing how it should license its technologies in the future, and Ed Silverman has coverage. The core of the new approach is centered around the idea that licensees must show the government a plan for ensuring access to the technology, and that plan must be constantly updated. I assume that the Trump administration will kill this, and I’m sympathetic to the argument that this is all too convoluted to pull off in reality. 

• One of the low-key -- but consistent -- arguments about the IRA is that it incentivizes health plans to play games with formularies and access, given that the medicines with low, government-set prices will not necessarily be the most profitable for plans. This Health Affairs Forefront piece delves into that concern and advocates for a CMS that is more aggressive in patrolling that kind of behavior. 

• A STAT op-ed by Joey Mattingly and Kelly Anderson suggested that PBM reform is not enough to change the trajectory of retail pharmacies.

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