Daily Industry Report - February 2

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)
Daily Industry Report (DIR)

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

Few Americans say they know how much health care will cost: Gallup

By Lauren Sforza - Less than 20 percent of Americans say they know how much they will have to pay before receiving health care treatments, according to a report. Read Full Article…

VBA Article Summary

  1. Lack of Cost Transparency and Quality Concerns: The Bentley-Gallup Business in Society Report reveals that a significant majority of Americans (79%) are unaware of health care costs prior to receiving care. Furthermore, 95% believe health care providers should make costs more transparent. Additionally, 56% of respondents feel that the quality of care received does not justify the costs, indicating a disconnect between health care expenses and perceived value.

  2. Rising Health Care Spending: The report aligns with federal data showing a substantial increase in U.S. health care spending. In 2022, health care expenditure in the United States rose by 4.1% from the previous year, amounting to a total of $4.5 trillion or roughly $13,493 per person. This trend of escalating costs underscores the growing financial burden of health care on Americans.

  3. Deferred Medical Treatments Due to Cost: Echoing these concerns about health care affordability, a separate Gallup poll from last year highlighted that a record-high 38% of Americans had postponed medical treatment due to financial constraints. This indicates a critical issue where cost is a major barrier to accessing necessary health care services. The recent survey, conducted with 5,458 U.S. adults, has a margin of error of 1.8 percentage points, reinforcing the significance of these findings.

HVBA Poll Question - Please share your insights

Would you advise clients to import specialty or high cost brand drugs like Ozempic, Mounjaro, Wegovy from abroad to save 35-50% off U.S. prices of $850, $1,070, $1,670 per month respectively?

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Our last poll results are in!


of Daily Industry Report readers who responded to our last polling question think Eli Lilly’s direct-to-consumer website for Telehealth prescriptions and drug delivery, feel this will somewhat positively affect patient access and disrupt the traditional drug supply chain.

24.03% of respondents are neutral or uncertain, 22.79% feel it will negatively affect patient access and have minimal or adverse effects on the supply chain while 16.61% are highly positive this will affect and and improve patient access and disrupt the traditional supply chain.

Have a poll question you’d like to suggest? Let us know!

Medicare drug price negotiations start after Biden administration makes initial offers

By Tami Luhby - The Biden administration is sending its initial offers to the drugmakers participating in the historic first round of Medicare drug price negotiations on Thursday. Read Full Article…

VBA Article Summary

  1. Medicare Drug Price Negotiations Initiated: The Centers for Medicare and Medicaid Services have commenced a six-month negotiation period with drug manufacturers, as part of President Joe Biden's efforts to reduce drug prices. This move, happening ahead of the November presidential election, is marked by Biden's announcement that Medicare is negotiating fair prices for 10 expensive and widely used drugs, a first in history. The process, facing opposition and lawsuits from pharmaceutical companies, aims to establish maximum fair prices by September 1, effective from 2026.

  2. Key Drugs and Industry Response: The initial list of 10 drugs includes treatments for heart disease, cancer, diabetes, and autoimmune diseases, which accounted for significant costs to Medicare and enrollees in 2022. Major pharmaceutical companies involved, such as Bristol Myers Squibb, Merck, and Johnson & Johnson, are challenging the negotiation process in court, arguing constitutional violations. Industry groups criticize the government's approach, citing a lack of transparency and potential long-term impacts on patients.

  3. Negotiation Details and Future Prospects: The negotiation process, facilitated by the Inflation Reduction Act of 2022, involves considering clinical benefits, drug alternatives, and patient input. Discounts are expected to range from 25% to 60%. This initial phase focuses on Part D drugs, with plans to expand to Part B drugs in 2028. The Congressional Budget Office anticipates nearly $100 billion in Medicare savings over 10 years, although the exact savings for enrollees remain uncertain. The program will expand to cover more drugs in subsequent years, enhancing Medicare's bargaining power.

Provider groups, bipartisan lawmakers rally around bills supporting healthcare worker safety, mental well-being

By Dave Muoio - Provider groups and their legislative allies took to the field this week to drum up more support for bills designed to protect the healthcare workforce’s physical and mental well-being. Read Full Article…

VBA Article Summary

  1. SAVE Act Briefing and Support: The American Hospital Association (AHA) and the American College of Emergency Physicians (ACEP) co-hosted a briefing to support the Safety from Violence for Healthcare Employees (SAVE) Act. The event, attended by almost 100 House and Senate staff, featured a panel including executives from Jefferson Health, WVU Medicine, and other provider organizations. Key points included the SAVE Act’s aim to make assaulting a healthcare worker a federal crime and provide grants for tailored protection solutions. The briefing emphasized the need for enhanced safety for healthcare workers, with Rep. Madeleine Dean and Rep. Larry Bucshon highlighting the urgency of the situation.

  2. Rising Violence and Labor Shortages: A recent ACEP member survey showed an increase in violent incidents in emergency departments, leading to high-profile health systems enhancing their security infrastructure. Panelists at the briefing stressed that safeguarding healthcare workers is crucial for addressing labor shortages and maintaining quality patient care. Dr. Aisha Terry, president of ACEP, emphasized the ongoing nature of these safety concerns in emergency departments nationwide. The briefing followed a letter from nine healthcare provider organizations in support of the SAVE Act, citing the marked increase in attacks against healthcare workers.

  3. Extension of Dr. Lorna Breen Act for Mental Health Support: In parallel, bipartisan legislators are seeking to extend the Dr. Lorna Breen Health Care Provider Protection Act, which has directed over $100 million in funding towards mental healthcare for healthcare providers. This reauthorization, introduced concurrently with the SAVE Act briefing, aims to extend the grant programs for another five years. Supported by over 40 healthcare professional organizations, it focuses on training programs, employee education, and awareness campaigns to reduce burnout and address mental health issues among healthcare workers. The reauthorization responds to increased signs of burnout and stress among healthcare professionals since the COVID-19 pandemic.

Medicare to kick off first drug price negotiations, and it could get heated

By Berkeley Lovelace Jr. - The government is set to begin negotiating prices on the 10 costliest prescription drugs covered by Medicare this week, setting the stage for a fierce tug of war between U.S. officials and drugmakers as the Biden administration attempts to lower soaring prescription drug costs for older adults. Read Full Article…

VBA Article Summary

  1. Medicare Drug Price Negotiations Underway: As part of the Inflation Reduction Act, Medicare is entering uncharted territory by directly negotiating drug prices with pharmaceutical companies. The negotiations focus on 10 specific drugs, including treatments for diabetes, heart failure, and blood cancers. These drugs currently have U.S. retail prices significantly higher than in other comparable countries. The negotiations, which involve intense back-and-forth between Medicare and drugmakers, are expected to lead to substantial price cuts, potentially up to 60% for older drugs. This initiative aims to reduce the financial burden on the more than 65 million people covered by Medicare in the U.S.

  2. Impact on Drug Prices and Medicare Beneficiaries: The price reductions from these negotiations are expected to take effect in 2026. Early estimates suggest that even a 25% discount on these drugs could result in significant savings for the federal government and Medicare recipients. For example, a 25% discount on the blood cancer drug Imbruvica could save about $560 million. These savings are anticipated to lower out-of-pocket costs and monthly premiums for Medicare beneficiaries, with further price negotiations planned to cover more drugs in subsequent years.

  3. Legal Challenges and Concerns: The drug price negotiations, while potentially beneficial for Medicare recipients, are facing legal challenges from pharmaceutical companies. Several drugmakers, including Merck, Johnson & Johnson, and AstraZeneca, have filed lawsuits seeking to dismantle the Inflation Reduction Act's negotiation provision. These legal battles, along with concerns raised by industry groups about the lack of transparency and potential negative impact on patient interests, indicate a potentially difficult path ahead for the Biden administration's efforts to control drug prices.

GSK settles another Zantac lawsuit in California

By Reuters - GSK (GSK.L), opens new tab said on Thursday it had agreed to settle another lawsuit in California that alleged its discontinued heartburn drug Zantac caused cancer, the latest in a series of settlements to end costly litigation. Read Full Article…

VBA Article Summary

  1. Settlement and Dismissal of Zantac Case: The lawsuit against GSK concerning the drug Zantac was scheduled for trial on February 20, but will now be dismissed following a confidential settlement. GSK stated that they have not admitted any liability in this matter. The legal action originated from concerns in 2019 about Zantac's active ingredient, ranitidine, potentially forming a cancer-causing chemical, NDMA, over time. This led to the halting of Zantac sales by some manufacturers and pharmacies, and the eventual removal of Zantac and its generic versions from the market by the FDA in 2020.

  2. Background and Impact of Zantac: Zantac, approved over four decades ago, was once the world's best-selling medicine in 1988 and was one of the first drugs to exceed $1 billion in annual sales. As of October, GSK was facing approximately 79,000 related cases in the United States, predominantly in Delaware, with California being a notably challenging legal environment for multinational companies due to its plaintiff-friendly courts.

  3. Financial and Market Implications for GSK: Analysts have estimated GSK's total settlement costs to be around $5 billion. Despite this, shares in GSK, a FTSE 100 firm, closed up 2% on Wednesday, bolstered by better-than-expected fourth-quarter results and a positive outlook for 2024. This optimism is attributed to the growth of GSK’s vaccines and cancer drugs pipeline. The company's shares remained steady in early Thursday trade.\

Pharma companies lose fight over venue for states’ price-fixing lawsuits

By Mike Scarcella - Dozens of drug makers have lost their bid to keep a group of price-fixing lawsuits joined together in Pennsylvania federal court, after a court panel on Wednesday said Connecticut and other state plaintiffs could press their own cases separately. Read Full Article…

VBA Article Summary

  1. Jurisdiction Transfer Approved: The federal Judicial Panel on Multidistrict Litigation has agreed to a request from Connecticut and 45 other states to move their antitrust lawsuits back to Connecticut federal court. Originally filed in 2016 in Connecticut, these cases were part of a larger multidistrict litigation (MDL) in Pennsylvania, where approximately 40 pharmaceutical companies are accused of conspiring to keep generic drug prices high.

  2. Impact of New Federal Law: The court panel's decision to send the state cases back to Connecticut was influenced by a new federal law enacted in late 2022. This law grants state attorneys general similar authority to the U.S. Justice Department in choosing where to litigate antitrust actions. Although the panel recognized this might temporarily disrupt the ongoing MDL in Pennsylvania, they noted that prior rulings involving the states' claims should remain valid and that coordination between parties and courts is still possible.

  3. Reactions and Implications: Pharmaceutical companies like Teva, Sandoz, and Aurobindo Pharma, which are part of the MDL, objected to the panel's decision, fearing it would create litigation "chaos." They argued against fighting the same claims in different courts. However, Connecticut Attorney General William Tong welcomed the decision, emphasizing the need for fair competition in the generic drug industry. The case, known as "In re Generic Pharmaceuticals Pricing Antitrust Litigation," continues to be a significant legal battle over drug pricing practices.

AI can crack open the 'black box' of effective mental health therapy at scale, study finds

By Heather Landi - As artificial intelligence advances in different areas of healthcare, there are concerns that technology and AI-based chatbots will replace the human connections between patients and practitioners.. Read Full Article…

VBA Article Summary

  1. Large-Scale AI Analysis of Counseling Sessions: A groundbreaking study, published in JAMA Open, utilized AI to analyze over 20 million text conversations from counseling sessions. This marks the largest study of its kind, examining more than 160,000 anonymized, text-based sessions. The AI models were able to predict patient satisfaction and clinical outcomes successfully, setting a new benchmark in mental health research.

  2. Enhancing Therapeutic Effectiveness with AI: The primary goal of the study was not to replace therapists with AI, but to understand how human therapists deliver behavioral health care and the impact of their interactions on patient satisfaction and clinical outcomes. The research demonstrated a direct correlation between empathetic counseling and improved patient satisfaction and clinical outcomes. AI tools were used to shed light on effective counseling strategies, thereby enhancing the connection between therapists and patients and leading to better treatment outcomes, including symptom reduction.

  3. Implications for Mental Health Therapy and Clinician Training: The study, a collaboration between health tech company Lyssn.io and online therapy company Talkspace, highlights the potential of AI in revolutionizing mental health therapy and clinician training. By analyzing vast amounts of text-based therapy data, AI can identify key factors in effective counseling, such as the importance of empathy and reflective listening. These insights can be used to improve therapist training and ultimately enhance the quality of mental health care, underscoring the significance of the human element in therapy and the supportive role of AI in enhancing it.

Appeals court rejects doctors’ challenge to No Surprises Act

By Rebecca Pifer - Opponents of the No Surprises Act experienced another setback this week after an appeals court dismissed a lawsuit seeking to overturn the law. Read Full Article…

VBA Article Summary

  1. Dismissal of Claims Against the No Surprises Act: A panel from the U.S. Court of Appeals for the Second Circuit dismissed claims challenging the No Surprises Act's constitutionality, brought by physician Daniel Haller and his colleagues at Long Island Surgical. The law, which prohibits out-of-network providers from imposing unexpected medical charges on patients, has faced opposition from some physician groups, particularly emergency medicine providers, due to concerns about reduced profits.

  2. Appeal and Future Repleading Opportunity: The case was initially dismissed by a New York district court in August 2022. On appeal, the physicians argued that the law infringed on their right to sue patients for emergency medical services, effectively constituting an illegal property seizure. The appeals court upheld the district court's decision, citing the doctors' argument as "vague and speculative," but allowed Long Island Surgical the option to replead the case focusing on the right to sue insurers.

  3. Broader Context and Ongoing Litigation: The No Surprises Act has been controversial, leading to multiple lawsuits and challenges regarding its interpretation and implementation, particularly concerning the arbitration process for out-of-network bills. Issues with the law's rollout, including procedural delays and billing dispute backlogs, have been noted by a government watchdog. The Texas Medical Association has filed several lawsuits, including two currently in an appeals court, contesting aspects of the arbitration process under the No Surprises Act.

By Andrea Park - The first human has received Neuralink’s brain-computer interface, which company founder Elon Musk has claimed could one day help the blind see, restore mobility to people with severe paralysis and inextricably link anyone’s brain to their smartphone. Read Full Article…

VBA Article Summary

  1. Neuralink's First Human Trial: Elon Musk announced on his social media platform, X, that Neuralink has commenced its first human clinical trial. The trial, which began last fall, conducted its first brain implant on January 28. This implant, involving a patient who is now recovering well, showed promising results in neuron spike detection. The trial targets volunteers with paralysis due to cervical spinal cord injuries or ALS.

  2. The PRIME Study and Its Technology: The trial, named the PRIME study, employs Neuralink’s R1 robot to implant the N1 device into participants' brains. This device, containing over 1,000 electrodes on several threads, records brain activity and transmits it to an app. Initially, the data will be used to train an algorithm to recognize each patient's unique neurological patterns, aiming to translate brain activity into computer controls for paralyzed participants.

  3. Future Prospects and Regulatory Hurdles: The technology, referred to as Telepathy by Musk, aims to enable control of devices through thought, particularly benefiting individuals with limb paralysis. Despite facing setbacks like slow progress, animal treatment concerns, and a federal investigation, Neuralink received FDA approval for human trials last spring. The PRIME study is expected to last about six years, including an 18-month primary study with regular check-ins and a five-year follow-up period.