PBMs Are All Over the Place Today: On the Hill, In the Media, At the Courthouse

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The PBM issue has been a bit below the radar. As we talked about earlier this week, it seems to be off the table for any of the initial budget bills, and there haven’t been a lot of fireworks. 

That changed over the past 24 hours. While there’s no huge news, there were a ton of small reminders that, yeah, there’s some unfinished business: 

• As we speak, there is a House committee hearing on PBMs. Weirdly, I don’t think a single one of the four witnesses will be speaking from a pro-PBM standpoint. We’ve had a lot of PBM hearings, and I don’t think this one will move the needle. But it’s a reminder that the issue has not gone away. 

• Probably not coincidentally, the PBM lobby has gone on a mini-publicity blitz, making the case that the industry is a necessary part of the health care system’s machinery. You can see the PCMA slick “Innovation” webpage on their good deeds here, and PCMA honcho JC Scott made the rounds, doing interviews with The Hill and Axios. Scott is playing a bad hand well, unlike the op-ed I made fun of yesterday.

• Remember the FTC? It’s still gathering data for its investigation of the industry, and the agency just won a legal victory over CVS. The two sides were squabbling over what information CVS had to pass along to the agency.

• And there’s an FTC lawsuit, too. I mentioned last week that a federal judge rejected an effort by the big PBMs to kill that lawsuit (the PBMs argued that the FTC shouldn’t have brought the case in its in-house administrative court). The PBMs have now appealed that case, so the story isn’t over.

We know what the first set of health care battles to be fought in Trump 2.0 will be focused on: Medicaid. If this wasn’t obvious before, it became obvious yesterday, when the House passed a budget blueprint that will require the House Energy and Commerce Committee to find $880 billion to cut. 

Given that the committee pretty much only oversees Medicare and Medicaid, and given that Medicare is allegedly off the table, that leaves only one route. 

I don’t have a deep fluency with Medicaid, but getting more conversant was one of two New Year’s resolutions I made this year. 

So I was happy to see this detailed Axios piece from last week on all the different ways that Medicaid could be slashed in the service of tax cuts and other budget priorities. The piece wasn’t particularly predictive or prescriptive. It made clear there are a lot of different directions things might go, but the one theme that dominated is that no matter what, providers are in the line of fire. 

That got me thinking about 340B, another place where providers are, increasingly, in the line of fire. 

Leaving aside the question of whether 340B dollars should be serving as a blank check for nonprofit hospitals and clinics**, it’s a program that is injecting $60 billion or so into the industry every year with very few questions asked. 

Sixty billion dollars is a big number, but it’s going to feel a lot bigger if Medicaid payments start shrinking. Right now, in most cases, the $60 billion provides a profit cushion. It’s a nice-to-have, not a need-to-have. In a world where nearly a trillion dollars could be sucked out of Medicaid, though, it feels like attacks on 340B will get even more existential for providers. 

To be clear: 340B was not designed as a supplemental hospital funding mechanism, and I don’t want to concede that point. 

But if you’re the hospital lobby and you see this Medicaid freight train bearing down on you, you’re probably going to fight all the harder to protect the 340B status quo, right? Like, this might even be a point of negotiation. 

It’s possible that I’m overthinking this. Stil: I have to wonder if the politics of 340B get intertwined with the politics of Medicaid. 

** The answer to that question is, “No, they shouldn’t,” BTW.

• Yesterday, I said that All Things Biosimilars’ Andrew Bourgoin thought that the mystery partner in the middle of the J&J/Samsung Stelata dustup was United. That wasn’t right: Andrew’s bet is actually on Cigna/Quallent.

• The EPIC Act, a bill that would fix the disparity between small molecules and biologics in the IRA, has been reintroduced. Ed Silverman at STAT has good coverage of where the battle lines are.

• Love this new white paper from the American Benefits Council on the impact of 340B on employers. I don’t think any of the information will be new to all of you 340B mavens, but it ought to be a great educational resource.

• While we’re talking 340B, the most interesting rabbit hole around the program is the fate of Sagebrush, a small health system with a creative approach to grabbing 340B dollars. There are overlapping narratives, but one of those stories -- Sagebrush’s legal effort to force the government to let some of its clinics back into 340B -- is now on pause. Sagebrush withdrew their suit and will apparently work directly with HRSA on the reinstatements, per 340B Report.

• Nice piece by BIO CEO John Crowley, who weaves together his own experiences and Rare Disease Day to push for the ORPHAN Cures Act and a resurrection of the Pediatric Priority Review Voucher program.

• NPR/KFF have a nice story elevating an interesting dynamic: The American people really want efforts to address health care prices, but that’s not a need that anyone in power seems to be taking particularly seriously. Then again, I’m not sure there are any easy moves here. Health care is all about tradeoffs.

• Merck said in its 10-K annual filing with the SEC that it expects Keytruda to be on the list for IRA “negotiations” next year. That is 100% not a surprise, but it’s noteworthy that Merck is talking about it. That’s not the only interesting bit in the Merck 10-K … more on that document tomorrow. 

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