Daily Industry Report - August 12

Your summary of the Voluntary and Healthcare Industry’s most relevant and breaking news; brought to you by the Health & Voluntary Benefits Association®

Jake Velie, CPT
Vice Chairman, President & COO
Health & Voluntary Benefits Association® (HVBA)
Editor-In-Chief
Daily Industry Report (DIR)

Robert S. Shestack, CCSS, CVBS, CFF
Chairman & CEO
Health & Voluntary Benefits Association® (HVBA)
Publisher
Daily Industry Report (DIR)

US states sue over Biden rule extending health insurance to DACA immigrants

By Daniel Wiessner - A group of Republican-led states filed a lawsuit on Thursday seeking to block the Biden administration from allowing up to 200,000 immigrants brought to the U.S. illegally as children to access federally-run health insurance. Read Full Article…

HVBA Article Summary

  1. Legal Challenge to HHS Rule: Fifteen states, led by Kansas Attorney General Kris Kobach, have filed a lawsuit against the U.S. Department of Health and Human Services (HHS), claiming that its recent rule violates federal law. The rule in question, adopted in May, classifies DACA (Deferred Action for Childhood Arrivals) participants as "legally present," thereby allowing them to enroll in healthcare programs under the Affordable Care Act. The states argue that this contradicts federal laws against providing public benefits to individuals without legal immigration status.

  2. Economic Concerns and State Burdens: The lawsuit further contends that the HHS rule improperly encourages DACA recipients to remain in the United States illegally, imposing significant financial burdens on states. According to the states, these burdens come in the form of millions of dollars spent annually on public services for DACA recipients and their families. This aspect of the lawsuit highlights the states' concerns about the economic impact of the federal policy on local resources.

  3. Political Context and Broader Implications: The issue has gained prominence as immigration remains a critical topic in the upcoming presidential election. With former President Donald Trump and Vice President Kamala Harris as key figures in the debate, the lawsuit and the new HHS rule have sparked broader discussions about immigration policy and healthcare access. The rule's implementation, set for November 1, will coincide closely with election day, potentially influencing voter sentiment and the political landscape.

HVBA Poll Question - Please share your insights

What emerging trends in pet benefits do you foresee becoming important in the next five to ten years?

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Our last poll results are in!

43.94%

of Daily Industry Report readers who responded to our last polling question, stated “the need for affordable specialty medicines” is the primary driver of growth in the Pharmacy Benefit Management (PBM) market.

21.52% believe the primary driver of growth in the PBM market is “a favorable regulatory structure in the US and other developed markets.” 18.18% believe the primary driver of growth is the “streamlining of supply chain networks by pharma companies,“ while 16.36% believe it to be the “increasing prevalence of chronic diseases necessitating advanced therapeutics. 

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States want to lower drug prices. A federal law stands in their way.

By Shalina Chatlani - Oliver Lackey opened a pharmacy in his hometown of Fairview, Oklahoma, so he could “provide the best patient care.” He set up shop a decade ago in the local grocery store with “zero prescriptions.” Before long, business took off — yet he was still struggling. Read Full Article…

HVBA Article Summary

  1. Challenges Faced by Independent Pharmacies: Oliver Lackey's experience highlights the difficulties faced by independent pharmacies due to declining reimbursements from insurance companies and Pharmacy Benefit Managers (PBMs). Despite increasing patient numbers and prescription volumes, PBMs' payment policies forced Lackey to close his pharmacy, underscoring the tension between small pharmacies and large healthcare corporations that own PBMs.

  2. Legislative Efforts and Federal Constraints: States, including Oklahoma, have attempted to regulate the influence of PBMs by enacting laws aimed at curbing their power and protecting local pharmacies. However, these state efforts often clash with the Employee Retirement Income Security Act (ERISA), a federal law that exempts self-funded health plans from state regulations, affecting a significant portion of the American workforce.

  3. Ongoing Legal Battles and Potential for Change: The legal struggle reached a critical point with Oklahoma's appeal to the U.S. Supreme Court to uphold its PBM law, which was initially blocked under ERISA rules. The outcome of this case could set a precedent that enables states to regulate health plans more effectively, potentially reshaping how health benefits are managed across the country, especially concerning prescription drug costs.

Trust in Doctors, Hospitals Plummets 31%

By Christopher Cheney - Trust in physicians and hospitals fell from 71.5% in April 2020 to 40.1% in January 2024, according to a new research article. The trust patients place in physicians and hospitals is an important concern for CMOs and public health officials. Read Full Article…

HVBA Article Summary

  1. Trust and Vaccination Rates: Higher trust in physicians and hospitals correlates significantly with higher vaccination rates for COVID-19 and influenza, as well as the uptake of COVID-19 boosters. Trust plays a pivotal role in patients' willingness to follow health recommendations, including vaccinations.

  2. Factors Contributing to Loss of Trust: The study identifies several factors leading to diminished trust, including poor patient care experiences, perceived financial motives overriding patient well-being, influence from external entities, and experiences of discrimination or bias within the healthcare system.

  3. Restoring Trust in Healthcare: Roy Perlis emphasizes the need to restore trust to support future public health initiatives. Strategies for rebuilding trust should address specific concerns such as improving transparency regarding financial interests, combating misinformation, and enhancing patient engagement and care experiences, particularly for those who have previously had negative interactions with the healthcare system.

Inflation, weight loss drugs drive ACA premiums higher

By Kristen Beckman - Premiums for Affordable Care Act (ACA) health plans will increase 7% on average across 324 insurers next year. This increase is on par with premium increases for 2024, according to Peterson-KFF's Health System Tracker. Read Full Article…

HVBA Article Summary

  1. Range and Distribution of Premium Changes: For 2025, proposed health insurance premium changes vary widely, with some ACA insurers proposing decreases up to 14% while others suggest increases as high as 51%. The majority of changes are more modest, falling between increases of 2% and 10%. Out of 324 ACA insurers, 50 have proposed decreasing their premiums, whereas 85 have requested increases that exceed 10%.

  2. Factors Influencing Premium Adjustments: The upward revisions in health insurance premiums are primarily driven by the escalating costs of healthcare services, inflation, and the increased usage of specialized drugs like weight loss medications. This year, medical inflation has begun to surpass general economic inflation after trailing behind it during 2021-2023 due to unusually high economic inflation rates. Insurers also point to heightened staffing costs and overhead expenses, influenced by economic inflation, as well as impacts from hospital market consolidation and workforce shortages, all contributing to the rise in premiums for 2025.

  3. Specific Drug Costs and Policy Measures: The surging demand for GLP-1 drugs such as Ozempic and Wegovy, primarily used for diabetes management and weight loss, is noticeably pushing prescription drug spending higher. Insurers are implementing strategies like prior authorization, step therapy, and quantity limits to control the use of these drugs, particularly to curb off-label usage for weight loss. Additionally, the emergence of costly new gene therapies is further driving premium increases. However, pandemic-related costs and the effects of the Medicaid continuous enrollment unwinding, which began in April 2023, are reported to have minimal impact on the upcoming year’s premium adjustments.

Lilly says to ‘take some caution’ on other companies’ early-stage obesity data, calls out compounders

By Kyle LaHucik - After posting a blowout quarter of financial results, Eli Lilly has almost made the obesity business look easy. But amid investors’ enthusiasm for weight loss drugs, the company’s top scientist warned of the challenges of bringing competitive new molecules through the pipeline and to market. Read Full Article…

HVBA Article Summary

  1. Cautious Optimism in Drug Development: Lilly’s Chief Scientific Officer, Dan Skovronsky, expressed a conservative stance on getting excited about new drug competitors based on early-stage clinical data. He emphasized the importance of robust Phase 2 data before considering a drug candidate seriously competitive. This reflects Lilly's approach of prioritizing strong scientific validation over initial hype in drug development.

  2. Strategic Investments and Expansion: Lilly has heavily invested in manufacturing capabilities and is actively pursuing label expansions for existing drugs to treat conditions like sleep apnea and heart failure. These efforts underscore the company's strategy to not only innovate in drug development but also to enhance the market reach and application of their existing portfolio, highlighting the significance of manufacturing investments in sustaining long-term competitiveness.

  3. Legal and Regulatory Challenges: The company is actively addressing the challenges posed by compounding pharmacies and small medical clinics that offer compounded versions of their weight loss drugs. This involves legal actions and close coordination with regulators to ensure patient safety and drug integrity. Lilly's proactive stance in this area reflects its commitment to maintaining high safety standards and protecting its market share amidst growing competition and regulatory complexities.

PBMs Are Stacking the Deck Against Patients and Independent Physician Practices

By Erica R. Cohen, MD - I often hear my patients ask the same questions: Why do I need to change to another infusible biosimilar again? Why do I need to get my infusion therapy sent by a specialty pharmacy? Will I be able to continue my therapy on time? Read Full Article…

HVBA Article Summary

  1. Biosimilars and Insurance Challenges: Biosimilars, introduced to the U.S. market in 2016 as cost-effective alternatives to original therapies, face significant barriers due to stringent insurance and pharmacy benefit managers' policies. These entities enforce the use of specific "preferred" biosimilars, complicating treatment for patients like Savannah with chronic conditions, where consistent and effective medication is crucial for remission.

  2. Financial and Operational Hurdles for Healthcare Providers: The reimbursement rates set by insurance companies often do not cover the costs that medical practices incur when purchasing these biosimilars. This discrepancy forces practices to procure drugs through specialty pharmacies, which not only increases administrative burdens but also leads to significant therapy delays due to additional prior authorization requirements.

  3. Impact on Patient Care and Systemic Issues: The restrictive policies and financial models employed by PBMs and insurance companies contribute to a risky trend that compromises patient care and could shift more procedures to hospital settings, thereby increasing overall healthcare costs. The Federal Trade Commission has criticized these anticompetitive practices, highlighting the urgent need for policy reform to prioritize patient health and enable physicians to administer the necessary drugs without undue delays or financial risks.

Can Intensive Lifestyle Changes Slow or Reverse Early Alzheimer's Disease?

By Kathrin LaFaver, MD - I have the great pleasure today of talking to Dr Dean Ornish, a pioneer in the field of lifestyle medicine. He has many accolades to his name and is well known for bringing lifestyle medicine approaches to cardiovascular disease. But the reason we're talking today is the recently published study in Alzheimer's Research & Therapy on intensive lifestyle interventions for mild cognitive impairment and early AD. So, welcome, Dr Ornish. Read Full Article…

HVBA Article Summary

  1. Study Background and Methodology: Dr. Ornish compares the current understanding of Alzheimer's disease (AD) to the early perspectives on coronary heart disease, highlighting a similar potential for lifestyle interventions to mitigate disease progression. The study involved a randomized controlled trial using a comprehensive lifestyle intervention—including a whole-foods, plant-based diet, moderate exercise, stress-management techniques, and support groups—to treat individuals with mild cognitive impairment or early-stage AD.

  2. Significant Findings and Outcomes: The results after 20 weeks showed significant cognitive and functional improvements in participants, marking a notable discovery in the treatment of AD without pharmaceutical intervention. This finding is critical as it offers an alternative to drug therapies, which are not only costly but have also shown limited efficacy and potential adverse effects. The study uses established cognitive function measures similar to those in FDA drug trials, showing significant benefits in the lifestyle intervention group compared to the control group.

  3. Potential of Lifestyle Changes Over Drug Therapies: Dr. Ornish emphasizes the broader implications of the study, suggesting that lifestyle changes might be more effective than current antiamyloid drugs, which target only one aspect of the disease’s pathophysiology. He advocates for the integration of lifestyle modifications as a viable and cost-effective approach to not only slow but possibly reverse the progression of AD, providing a new sense of hope and improved quality of life for patients.

Zepbound shortages ease, but Lilly cautions pharmacy availability may remain ‘choppy’

By Delilah Alvarado - Eli Lilly is making progress resolving the supply strains that for months have made its in-demand obesity and diabetes medicines difficult to get. However, even as shortages ease, the drugs’ availability at the pharmacy counter may remain in flux. Read Full Article…

HVBA Article Summary

  1. FDA Drug Shortage Update and Lilly's Response: Earlier this month, the Food and Drug Administration updated its drug shortage database to reflect that all doses of tirzepatide, marketed as Zepbound for obesity and Mounjaro for diabetes, are now available. This update marks a change from previous listings that showed limited accessibility for certain dose strengths. Lilly CEO David Ricks highlighted on an earnings call that although all dosage forms are available for billing as orders come in, this doesn't guarantee immediate availability at all pharmacies, indicating a "real-time fulfillment" scenario rather than an abundant supply.

  2. Impact on Pharmacy Experience and Production Expansion: Despite the FDA’s update, Ricks cautioned that the pharmacy experience might remain inconsistent, with potential delays for patients in obtaining their prescriptions. To address the high demand for Mounjaro and Zepbound, Lilly has invested significantly in expanding its manufacturing capabilities, including a recent commitment of $5 billion towards a new site in Lebanon, Indiana. This is part of Lilly's strategy to enhance production capacity, although the new facilities will take time to become operational.

  3. Competitive Landscape and Market Impact: The strong demand for Lilly’s tirzepatide is evident in its robust sales figures, with Mounjaro generating $3.1 billion and Zepbound over $1.2 billion in the second quarter alone. In response to similar supply challenges, competitor Novo Nordisk has also expanded production capacity. However, Novo faced a setback as Wegovy sales underperformed market expectations, and certain doses of its drugs, including a starter dose of Wegovy, are still listed as having limited availability by the FDA.

Phototherapy: How Light Is Helping Patients Heal in New Ways

By Sari Harrar - A surprising therapy is showing promise for chronic pain, vision loss, and muscle recovery, among other conditions. It's not a pill, an injection, or surgery. It's light. Read Full Article…

HVBA Article Summary

  1. Historical and Modern Uses of Light Therapy: Light therapy has ancient roots, with figures like Hippocrates and Florence Nightingale advocating sunlight's healing properties. Today, it's used medically for conditions like jaundice and seasonal affective disorder. Innovations extend its application to chronic conditions and skin treatments, illustrating how ancient practices are refined with modern science to offer therapeutic benefits.

  2. Advancements in Treating Age-Related Macular Degeneration (AMD): The Valeda Light Delivery System represents a significant advancement in treating dry AMD, a common eye condition. Initial trials show promising results, with treated patients experiencing noticeable vision improvements. This device leverages red light therapy, aiming to rejuvenate cellular functions in the retina, enhancing natural repair mechanisms. Its potential FDA approval could mark a breakthrough for early-stage AMD treatment.

  3. Green Light Therapy for Pain Management: Exploratory research by Dr. Mohab Ibrahim has shown that green light can significantly reduce migraine frequency and intensity. This therapy's potential extends beyond pain relief to improving overall quality of life, reducing the need for pain medications, and offering a non-invasive treatment option. The precise wavelengths of green light play a crucial role in its efficacy, underscoring the importance of scientific validation in therapeutic uses of light.