Wegovy Comes Up Big In an Outcomes Study, Adding Fuel to the Reimbursement Fire

The news today that Wegovy can have a stunningly positive effect on cardiovascalar outcomes in patients who don’t have diabetes is a big deal. To be sure, it’s a big deal for the science and for the patients. But it’s also about to put the debate over reimbursement into overdrive.

This is the first block in what is likely going to be a cathedral of evidence that weight-loss drugs have all kinds of positive impacts on outcomes. Every positive study is going to make the cost-effectiveness of these medicines look better.

And that’s going to create problems.

Because the medicines will still be expensive, screwing up budgets even if the treatments are mathematically “worth it.” And if there is one thing the United States CANNOT do, it’s deal with cost-effective interventions that have a large budget impact. (The best example of this is hep C, where massively cost-effective treatments are, at the same time, massively underused.)

In theory, this calls for a national conversation. We ought to be paying for these meds, but if we want to keep our spending in check, we’re going to need to spend less on something. Like back surgeries or aircraft carriers or tax loopholes or whatever. The other alternative is to ration based on ability to pay (either at the individual or employer level). I fear that we’re headed toward “the other alterantive.” Because America.

Part of my schtick over the past five years has been shouting, sometimes in all caps, that DRUG PRICES AREN'T SKYROCKETING. The important caveat, of course, is that “drug prices” here means “net prices.”

(There is an important discussion to have about list prices, but that’s usually not what people are talking about when they talk about net prices. A discussion for another day.)

The idea that net prices are, at best, tracking inflation and, in most cases, actually falling is not new or particularly controversial. So I shouldn’t find it surprising or remarkable that a new Health Affairs paper looked at the introduction of competitive products between 2011 and 2019 and concluded that new entrants into a market drove down net prices. But it’s still a nice and supportive datapoint.

The study was led by Inma Hernandez (University of California San Diego) and Sean Dickson (formerly of West Health) who have a way of estimating net prices to allow for this kind of analysis.

One read of the study is that it shows that PBMs are driving down costs and are therefore a useful, untouchable part of the health care system. Hernandez knocked down that idea in a LinkedIn post: “PBM reform as discussed in Congress is focused on transparency, misalignment of incentives, anti-competitiveness, and barriers to pharmacy access.All critical issues that need to be addressed regardless of the effectiveness of PBMs in leveraging competition to generate savings.”

The amusing bit is that Dickson is now an SVP at AHIP, where he is in the uncomfortable position of both promoting his research, which shows that drug prices are falling, and toeing the AHIP line that drug prices are out of control. That leads to funny outcomes, such as the AHIP release on the study which toggles between the argument that prices are falling and invective about price increases.

• STAT spotted this OMB notice that regulations on TV advertising of drugs might be coming. But the STAT reporting makes clear that no one has any idea what is in those regs, which have been dormant for more than a decade.

• Last week, I listed all of the people I could find who had given feedback to Senators looking for background on 340B. Two more to add to the list: Drug Channels/Adam Fein and the Federation of American Hospitals.

• I don’t think that the California effort to source cheap, generic insulin is ever going to deliver the goods, but if you want a more optimistic take (that nonetheless acknowledges the challenges), here’s a JAMA Internal Medicine piece.

• There is some new research that tries to estimate what Germany’s willingness-to-pay standards are around varying drugs and therapeutic areas. I haven’t gone real deep, but if you’re interested in what the standards are in a country that is generally considered to be friendly to innovation (non-U.S. division), it’s worth bookmarking.