So Much 340B: SCOTUS Weighs In, a Georgia System Nets $700M+ in Profit, and More

One of the most important needs in the biopharma industry is communicators who can make the case not only for innovation but also for the broader policy and business environment that makes that innovation possible. 

That’s why I was so excited to see the news today that Sarah Alspach will be the new Chief Communications Officer at the Biotechnology Innovation Organization. It’s great news for Sarah, but the entire industry will end up as the big winner here

I have this great fear that writing about 340B all. the. freaking. time. is not going to work out well for me as a content creator (lol). 340B is not intuitive and it’s not a fun topic for those who aren’t already in the 340B deep end. I worry that I’m trying the patience of you all. 

On the other hand: holy moly, this is important stuff. 

So here are six things you ought to read about 340B today: 

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The Supreme Court just declined to hear PhRMA’s appeal in a suit centered around an Arkansas law that bars manufacturers from placing restrictions around contract pharmacies. I suspect there will be more commentary on this by tomorrow’s Curve. 

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I’m impressed by this effort to dissect the 340B balance sheet for one hospital -- Atlanta’s Northside -- that was pulled together by the analysts at Health Data Atlas. (I also appreciated the reference to The Wire** in the headline.)

The follow-the-money bits here are complicated, natch, but the overall conclusion is that Northside made at least $735 million off of the 340B program. That is a lot more than the system is paying in community benefit (HDA says that number is $434 million). 

Nice work if you can get it. 

The great hope is that more transparency can allow more analyses like this and force hospitals to either affirm the numbers and explain where the dollars are going … or provide their own numbers that will allow policymakers and others to judge whether the 340B program is accomplishing what its architects imagined. 

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You should gulp down everything that Shawn Gremminger at the National Alliance of Healthcare Purchaser Coalitions writes about 340B, including and especially this LinkedIn post from last week on the Minnesota 340B transparency report. 

Shawn boils things down to a critical question: “Who benefits?” The answer is obvious to you all (you’re 300 words deep in a newsletter about 340B!), but I imagine it will be shocking to people new to the conversation. The hospitals that make the most from the program are not the ones that need that money the most. 

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This is a solid overview, from Bloomberg Law’s Nyah Phengsitthy, of the recent legal battles over the “rebate model.” You should read it quick because it could be out-of-date quickly … I assume other manufacturers are getting ready to jump on this bandwagon. 

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Excellent, too, is this Medscape overview of why docs should care about 340B. It’s by the Coalition of State Rheumatology Organization’s Mattie Feldman. Feldman has done a ton of work raising the alarm on PBMs, so it’s notable that she’s getting engaged here. 

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Axios has a decent review of the current politics of 340B. A lot gets lost in the usually well-placed Axios obsession with SmartBrevity, but it’s probably important that Axios thinks 340B is important enough to devote a whole newsletter to. 

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** If you have not watched The Wire, I highly suggest you set aside 13 hours or so during this holiday season to watch the first season. The Wire really can’t be multitasked, so you can’t have it on “in the background.” I know it’s a big investment of your time. But you can trust me on this. 

There was some discussion over here about pharmacy trends last week, driven by a new Health Affairs paper that suggested that pharmacy numbers -- including independent pharmacy numbers -- are cratering. 

Adam Fein has a LinkedIn post up arguing that the paper’s headline, abstract, and coverage obscured the fact the trend is actually headed in the other direction. He points to data from the Health Affairs study itself showing that independents are continuing to grow across the board. Heck, the “Results” section of the paper makes it all plain:

“[T]he number of pharmacies in the US increased by 7.7 percent during the study period, from 59,902 in 2010 to 64,530 in 2021. During this period, 26,145 pharmacies closed, and 30,773 opened. However, during 2018–21, the number of pharmacy closures exceeded pharmacy openings, resulting in a 2.1 percent loss of pharmacies over the course of the three-year period. This decline was primarily due to chain pharmacy closures … whereas the number of independent pharmacies grew 2.3 percent.”

In some ways, all of this raises as many questions as answers. (Are there really 30,000 new independents? How solid is this data? What has happened since 2021?) I’m hoping that we continue to get the research we need in this area because it feels like it’s important that we get this right. 

ELSEWHERE: 

• I am absolutely riveted by the partisan breakdown of how Americans see health care coverage and quality. (I’m looking at new Gallup data). In some ways, this ought not be a surprise -- there’s lots of evidence that Americans now view everything through the lens of their party affiliation -- but it’s still jarring to see it made so plain out like this. 

• My line on obesity is getting tired, but: the solution here is an adult conversation about how to best allocate the resources of society. Part of the equation is understanding the cost offsets associated with weight loss, and this fantastic new paper from Emory researchers puts some numbers to that savings in JAMA Network Open. At 5% weight loss in an employer plan, there’s about a $700 drop in medical costs. For 25% weight loss in a Medicare patient, we’re talking more like $5,000+. 

• Novo dropped the price of a couple more of its insulins by 70%. Yes, there was some industry-trade coverage. And Reuters managed to write 80 words on the topic. But given the gallons and gallons of ink spilled on insulin prices, it’s weird to see this kind of thing get basically zero national attention. 

• Illuminating work on who tends to have very, very high medicine bills: older folks, men, those identifying as non-Hispanic Black, and those with Obamacare rather than employer coverage. Driving the trends: “Human immunodeficiency virus, inflammatory conditions, multiple sclerosis, and cancer accounted for the largest share of costs among this group.”

• Love this: Mark Cuban being interviewed about health policy by Zeke Emanuel in front of a standing-room audience of hundreds at Penn. I didn’t think I’d live to see the day when PBM dynamics was such a hot topic that students would go out of their way to engage. That’s the Cuban Effect for you.

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].