Daily Industry Report - February 27

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)

VIP Admission & CE’s On Us!

Prices for new US drugs rose 35% in 2023, more than the previous year

By Deena Beasley - Pharmaceutical companies last year launched new U.S. drugs at prices 35% higher than in 2022, reflecting in part the industry's embrace of expensive therapies for rare diseases like muscular dystrophy, a Reuters analysis found. Read Full Article…

VBA Article Summary

  1. Rising Prices of New Drugs: The median annual list price for new drugs has seen a significant increase, rising from $180,000 in 2021 for 30 drugs first marketed through mid-July, to $222,000 in 2022, and further to $300,000 in 2023, based on an analysis of 47 medicines. This trend highlights the escalating cost of pharmaceuticals, particularly in the realm of novel treatments.

  2. Focus on Orphan Diseases: A noteworthy portion of the new drugs approved by the FDA in 2023 and 2022 catered to orphan diseases, which affect fewer than 200,000 Americans. More than half of the approvals were for these rare conditions, a slight increase from the 49% rate observed over the previous five years. The high prices of these drugs are often justified by their value to patients and the lack of alternative treatments, granting manufacturers substantial negotiating leverage.

  3. Market Dynamics and Legislative Impact: The analysis discusses the market incentives provided to drug manufacturers for developing orphan disease treatments, including market exclusivity and various forms of financial support. Despite the high list prices of new medicines, the 2022 Inflation Reduction Act aims to curb price increases for treatments under Medicare, although it does not limit the initial pricing of new drugs. The article also notes the potential for savings programs and the role of health insurers in negotiating discounts, alongside the expectation that therapeutic competition might eventually lead to lower prices.

HVBA Poll Question - Please share your insights

What do you believe is the primary factor contributing to the average 20% increase in pharmacy costs as a percentage of total medical spending for businesses:

Login or Subscribe to participate in polls.

Our last poll results are in!


of Daily Industry Report readers who responded to our last polling question “absolutely believe and would engage in the legal importation of specialty medications” when asked if they would advise clients to import speciality 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.

26.83% of respondents have no opinion on the matter or are neutral, neutral or uncertain, 25.25% would consider it, but not too familiar with the process, while 20.41% do not believe or have trust in medications being sourced outside of the U.S. pharmacies.

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

Cyber Attack at Change Healthcare Affects Pharmacies Nationwide

By Pietje Kobus - Georgia-based Change Healthcare, the largest prescription provider in North America, is reporting that it is experiencing an ongoing cybersecurity breach, causing prescription delays for numerous pharmacies, including military pharmacies. Change Healthcare first reported the cyber-attack on Feb 21. Read Full Article…

VBA Article Summary

  1. System Disconnection for Security: Change Healthcare, part of UnitedHealth Group, disconnected its systems to mitigate further impact from a cyberattack. The company believes this issue is isolated to Change Healthcare, with other UnitedHealth Group systems remaining operational. This proactive measure was detailed in a statement on their incident tracker website on February 22.

  2. Industry Response and Recommendations: The American Hospital Association (AHA) has been actively coordinating with federal agencies, including the FBI, Department of Health and Human Services, and the Cybersecurity and Infrastructure Security Agency (CISA), in response to the incident. The AHA has raised concerns about potential significant impacts on the healthcare revenue cycle and advised healthcare facilities to disconnect from Optum systems and verify their data backup processes.

  3. Impact and Consolidation Concerns: The cyberattack on Change Healthcare has severely disrupted the ability of hospitals and pharmacies to submit claims and insurers to process payments. Industry professionals highlight the risks associated with the industry's trend towards consolidation, noting that fewer, larger clearinghouses increase vulnerability. The merger of Optum and Change Healthcare by UnitedHealth Group in a $7.8 billion deal in 2022, which expanded Optum's access to extensive patient records, underscores these concerns. The exact nature of the cyberattack has not been disclosed, and further updates are anticipated as the situation evolves.

The doctor will fee you now

By Tina Reed - Need a sick note from the doctor? Or have them OK a refill? It might cost you. Read Full Article…

VBA Article Summary

  1. Rising Administrative Fees for Medical Services: Physicians are increasingly charging fees for administrative tasks such as signing patient documents and responding to patient emails, with costs ranging from a few dollars to several hundred. This trend is attributed to the growing demands on physicians' time and the decrease in reimbursement for these tasks. The practice reflects a shift from previously free services to paid ones, justified by the need to manage physicians' workload and ensure compensation for their time.

  2. Impact of the Pandemic and Patient Behavior: The COVID-19 pandemic exacerbated the situation by increasing doctor burnout and leading to a surge in virtual care, making patients more inclined to seek online communication with their healthcare providers. The rise in high-deductible health plans has also motivated patients to avoid in-person visits, further increasing the volume of messages doctors receive. This situation has led to challenges in managing the quantity and quality of patient communications, with some healthcare providers introducing fees for email responses to manage the workload and discourage non-urgent inquiries.

  3. Future Considerations and Alternatives: The introduction of fees for administrative tasks by doctors is seen as a potential temporary measure that might be reconsidered if economic conditions improve or if artificial intelligence begins to alleviate some of the administrative burdens. While this approach generates additional income and could potentially improve physician well-being by reducing unpaid administrative tasks, it raises concerns about patient access and satisfaction. The trend towards concierge medicine, where patients pay a subscription for enhanced access, highlights a broader search for sustainable models that balance physician workload with patient care accessibility.

LIMRA: Life insurance new premium set a 2023 record for third straight year

By Staff Reports - Life insurance new premium rose to $15.6 billion in 2023, LIMRA reported today, setting a record for the third straight year. Better still, the year ended on a high note, with all lines recording "positive growth" in the fourth quarter. The results are part of LIMRA’s preliminary U.S. Life Insurance Sales Survey. Read Full Article…

VBA Article Summary

  1. Growth and Confidence in Life Insurance Market Post-Pandemic: The life insurance industry experienced significant growth in the latter half of the year, with annual life insurance premium expanding post-pandemic. This growth was supported by an increase in consumer confidence in the economy and their financial future in 2024, leading to a 4% increase in policy count. Specifically, term life insurance saw substantial growth, with an 8% jump in new premium and a 6% increase in policy count in the fourth quarter. LIMRA's senior vice president, John Carroll, highlighted that 60% of companies, including half of the top 10 carriers, reported sales growth.

  2. Product-Specific Performance and Forecasts: Each life insurance product category had varied performance, with whole life insurance maintaining steady new premium levels in the fourth quarter and a modest increase over the year. Term life insurance showcased the largest growth in both premium and policy count for the same period. Indexed universal life (IUL) and variable universal life (VUL) both showed growth in premium, with IUL expecting a rebound and VUL driven by a select group of carriers. Fixed universal life (fixed UL), however, saw a decrease in new premium over the year. LIMRA forecasts continued growth in the life insurance market, expecting total individual life insurance premium to increase by up to 5% in 2024 and 2025.

  3. Market Share and Consumer Trends: The life insurance market saw different trends across product lines, with whole life insurance representing the largest market share by premium at 39%. Term life insurance, experiencing the most significant growth, held 19% of the market share. Despite a decrease in IUL premium in 2023, policy count increased significantly, indicating a shift in consumer preferences and market dynamics. The industry's adjustment to economic conditions, such as lower inflation rates and increased consumer confidence, is expected to positively impact sales, particularly in whole life insurance.

Lawmakers grill VA, Oracle leaders over pharmacy-related patient safety issues

By Heather Landi - A year after hitting the pause button on a multibillion-dollar health tech project at the Department of Veterans Affairs (VA), federal lawmakers continue to have serious concerns about pharmacy software issues that could impact patient safety. Read Full Article… 

VBA Article Summary

  1. Extensive Issues and Oversight Concerns with Oracle Health’s EHR System: During a House Committee on Veterans’ Affairs Subcommittee hearing, lawmakers scrutinized the VA and Oracle Health regarding the significant overhaul of the electronic health record (EHR) system and patient safety issues highlighted by federal watchdogs. A draft report by the VA Office of Inspector General (OIG) revealed a coding error in Oracle Health’s software, causing incorrect VA Unique Identifier numbers to be sent between different hospital systems, potentially affecting 250,000 veterans.

  2. Impact on Pharmacy Operations and Staffing: The transition to the new Oracle Cerner EHR system has severely disrupted operations at VA medical centers, necessitating a significant increase in pharmacy staffing—up to 60% at larger centers—to handle the influx of errors and workarounds. This has led to millions in additional costs and has raised serious concerns about patient safety, including the risk of prescribing contraindicated medications due to inaccuracies in transmitted medication and allergy data.

  3. VA and Oracle’s Responses to EHR Challenges: Despite the identified issues, the VA and Oracle have committed to progressing with the EHR modernization, emphasizing improvements in pharmacy functionality and the safety and efficacy of the updated system. Oracle, having inherited the project from Cerner in 2022, has implemented major updates and asserts the system is built to VA’s specifications. However, lawmakers and the VA OIG remain concerned over unresolved patient safety issues, insufficient communication about risks, and the overall pace and effectiveness of the system’s implementation.

Artificial intelligence is making critical health care decisions. The sheriff is MIA.

By Ruth Reader - Doctors are already using unregulated artificial intelligence tools such as note-taking virtual assistants and predictive software that helps them diagnose and treat diseases. Read Full Article…

VBA Article Summary

  1. Regulatory Challenges and AI Evolution: The Food and Drug Administration (FDA) faces significant challenges in regulating the rapidly evolving technology of artificial intelligence (AI) in healthcare. Unlike traditional medical devices or drugs that require one-time approval, AI software continually changes and learns, necessitating ongoing monitoring. The FDA's current regulatory framework and resources are ill-equipped to handle the dynamic nature of AI, with FDA Commissioner Robert Califf highlighting the need for the agency to double its size to effectively oversee these technologies. Additionally, the Government Accountability Office (GAO) reported that the FDA seeks more authority to request AI performance data and set specific guidelines for algorithms, beyond its traditional risk assessment framework for medical devices and drugs.

  2. Congressional Hesitation and Industry Response: There is a noticeable delay and lack of consensus in Congress regarding the expansion of FDA's authority to regulate AI, exacerbating the regulatory gap. The FDA has attempted to provide guidance for safely incorporating AI into medical devices, facing backlash from tech firms accusing the agency of overreaching its authority. This situation reflects a broader confusion and concern within the industry regarding the scope of FDA's authority and the division of regulatory responsibilities among various health agencies. Despite these challenges, the FDA has not formally requested expanded powers from Congress, relying on existing authorities and seeking to adapt within its current regulatory framework.

  3. Proposals for Public-Private Oversight: To address the limitations and gridlock in traditional regulatory pathways, FDA Commissioner Califf and others have proposed the creation of public-private assurance labs. These labs, potentially located at major universities or academic health centers, would validate and monitor AI in healthcare, offering a novel approach to ensuring the safety and efficacy of AI applications. This idea has garnered some congressional support but also raises concerns about the effectiveness and fairness of such oversight, especially for AI applications in diverse healthcare settings. Critics argue that the FDA should maintain direct oversight of AI validation to ensure patient outcomes are prioritized and to avoid potential conflicts of interest in third-party evaluations.

How HHS Cybersecurity Performance Goals Will Impact Healthcare

By Jill McKeon - HHS recently unveiled healthcare-specific cybersecurity performance goals (CPGs) with the intent of helping the sector prioritize the implementation of key security best practices. Read Full Article…

VBA Article Summary

  1. Introduction of the Healthcare and Public Health (HPH) Cybersecurity Practice Guidelines (CPGs): The HPH CPGs, introduced by the Department of Health and Human Services (HHS), outline essential and enhanced cybersecurity goals aimed at improving the sector's security posture. While many healthcare organizations may already comply with these guidelines, their formalization represents a significant advancement in the industry's cybersecurity efforts. These guidelines build on existing practices and are aligned with strategies from the National Institute of Standards and Technology (NIST) and the Cybersecurity and Infrastructure Security Agency (CISA), emphasizing their role in bolstering cyber hygiene and patient safety in digital healthcare environments.

  2. Voluntary Nature and Future Implications: Although currently voluntary, the CPGs are anticipated to lay the groundwork for future mandatory cybersecurity regulations within the healthcare sector. The initiative has received mixed reactions, with some industry leaders advocating for the necessity of such standards to enhance resilience against cyber threats, while others, like the American Hospital Association (AHA), express concerns about the potential burden on hospitals. HHS has indicated plans to support implementation through financial incentives and programs, highlighting the complex balance between enhancing security and ensuring healthcare organizations are not overstretched financially.

  3. Implementation Challenges and Industry Response: The discussion around the CPGs underscores a broader debate on the best approach to improving cybersecurity in the healthcare sector. Experts acknowledge the importance of the guidelines but also point to the challenges of implementation, especially for resource-constrained facilities. The future of these guidelines involves navigating the tension between mandatory compliance and the need for supportive measures to facilitate adoption. As the healthcare industry grapples with these issues, the CPGs serve as a critical step towards a more secure and resilient healthcare infrastructure, with ongoing discussions likely to shape the evolution of cybersecurity standards and practices in the sector.

Frequent COVID Boosters in Immunocompromised ‘May Be Causing More Harm Than Benefit,’ New Review Suggests

By Megan Redshaw - Frequent administration of mRNA COVID-19 boosters may impair the immune system response in immune-compromised individuals, raising questions about whether giving multiple vaccine doses is more harmful than beneficial. Read Full Article… 

VBA Article Summary

  1. Concerns Over Repeated Vaccination: The narrative review by Alberto Boretti, published in Clinical and Experimental Medicine, highlights potential risks associated with repeated COVID-19 vaccinations. It suggests that continuous booster doses might not only increase the susceptibility to SARS-CoV-2 infections but also lead to higher levels of IgG4 antibodies. This could impair the activation of white blood cells, essential for protecting the body against infections and cancer, potentially resulting in multiorgan inflammation, autoimmune diseases, rapid-onset cancers, and autoimmune myocarditis.

  2. Impaired Immune Response: Boretti's review indicates that repeated mRNA vaccine boosters might weaken the immune system's response, particularly affecting CD4+ and CD8+ T cells. These cells are crucial for a robust immune defense, aiding in the destruction of harmful pathogens and the response to infections, allergens, and tumors. The impairment of these cells could lead to reduced antibody production and a compromised ability to mount effective immune responses, increasing the risk of opportunistic infections and allowing tumor growth to persist.

  3. Questioning Vaccine Efficacy and Safety for the Immunocompromised: Despite the initial exclusion of immunocompromised individuals from clinical trials, they were among the first to receive COVID-19 vaccine boosters. Concerns are raised regarding the lack of data on the safety and efficacy of multiple doses for these individuals, especially with emerging variants. The narrative underscores a growing skepticism towards the current vaccination strategy for the immunocompromised, suggesting a reevaluation of the approach to vaccination and calling for more research into the long-term effects of repeated mRNA vaccinations.

Americans Want Value for Healthcare, Not Another Welfare Plan

By Sally Pipes - Obamacare's insurance marketplaces are doing a brisk business. According to federal data released last month, a record 21.3 million Americans signed up for an exchange plan during the 2024 open enrollment season. Nearly 5 million were new customers. Read Full Article…

VBA Article Summary

  1. Record Enrollment Numbers Mask Underlying Issues: While Chiquita Brooks-LaSure, administrator of the Centers for Medicare and Medicaid Services, highlighted an all-time high demand for Marketplace insurance, with 21.3 million Americans signing up during the 2024 open enrollment season, the surge in sign-ups is attributed to the government subsidizing premiums. Critics argue that the high enrollment numbers are not a genuine achievement but rather a result of the government paying for coverage that individuals might not otherwise purchase.

  2. Shift from Competitive Market to Public Assistance: The original intent behind Obamacare's exchanges was to foster a competitive market for health insurance that would lead to lower prices and better quality through increased competition among insurers. However, due to onerous mandates and regulations imposed by the law, insurers were forced to raise premiums significantly. Consequently, the focus has shifted from creating a competitive market to increasing enrollment numbers through enhanced premium subsidies, effectively transforming the exchanges into a public-assistance program, especially for low-income Americans.

  3. Financial Implications and Public Sentiment: The push to increase enrollment through subsidies has significant financial implications, with premium subsidies for exchange plans expected to cost $1.1 trillion between 2024 and 2033. This shift towards viewing the Affordable Care Act as a form of public assistance, alongside Medicare, Medicaid, and Social Security, as expressed by Xavier Becerra, Secretary of the U.S. Department of Health and Human Services, contrasts with the public's desire for an insurance market that offers valuable coverage at affordable prices. Critics argue that the Biden administration has failed to deliver a viable insurance market, instead opting for an approach that relies heavily on taxpayer funding.