Daily Industry Report - January 17

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)

4 big FDA approval dates to watch in 2024

By Alexandra Pecci - The FDA’s 2024 PDUFA calendar is far from complete, but already it contains several dates worth watching, from the first new drug class for schizophrenia in decades, to a second indication for a history-making CRISPR treatmentRead Full Article…

VBA Article Summary

  1. Advanced Melanoma Treatment by Iovance Biotherapeutics

    Drug: Lifileucel

    Significance: Set to be the pioneering TIL (tumor infiltrating lymphocyte) cell therapy for advanced melanoma and the initial one-time cell therapy for solid tumor cancer. Despite a clinical trial setback for a different investigational TIL therapy, LN-145, the FDA has prioritized the review of Lifileucel and granted it a regenerative medicine advanced therapy designation.

  2. CRISPR Treatment for Blood Disorders by Vertex Pharmaceuticals and CRISPR Therapeutics

    Drug: Casgevy

    Significance: Following its historic approval for sickle cell disease, marking it as the first FDA-approved CRISPR-based treatment, Casgevy is now poised for another milestone. It aims to treat transfusion-dependent beta-thalassemia (TDT), a severe inherited blood disorder requiring regular transfusions. Casgevy stands out in the gene editing field, leading the CRISPR frontier with the majority of its competitors still in early development stages.

  3. Small Cell Lung Cancer Drug by Amgen

    Drug: Tarlatamab

    Significance: Amgen's innovative approach targets advanced small cell lung cancer by harnessing a patient's own T cells to combat tumor-specific antigens. Given priority review and breakthrough therapy designation by the FDA, Tarlatamab is a first-in-class drug designed for patients who have undergone multiple prior treatments. Its approval could significantly impact the treatment landscape for this aggressive and common cancer.

  4. Schizophrenia Treatment by Karuna Therapeutics

    Drug: KarXT

    Significance: KarXT represents a breakthrough in schizophrenia treatment, potentially ending decades of stagnation in therapeutic development. It distinguishes itself by not only mitigating schizophrenia symptoms but also avoiding typical side effects of current antipsychotics. Its innovative mechanism of action as a dual M1/M4 muscarinic acetylcholine receptor agonist in the central nervous system, combined with a lucrative acquisition by Bristol Myers Squibb, underlines its significant market potential.

VBA Poll Question - Please share your insights

What is your opinion on Eli Lilly's direct-to-consumer website for telehealth prescriptions and drug delivery, such as Zepbound? Do you think it will positively affect patient access and disrupt the traditional drug supply chain?

Login or Subscribe to participate in polls.

Our last poll results are in!


of Daily Insurance Report readers who responded to our last polling question on how prepared they felt they were for the implementation of the Consolidated Appropriations Act (CAA) and its requirements said “What is the Consolidated Appropriations Act?

37.78% of respondents stated they were “Somewhat prepared, 12.59% shared they were “Not prepared”while only 8.15% felt “Very preparedfor the implementation of the CAA and its 2024 requirements. 

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

A MUST Attend Event Based on DIR Poll Results

2024 employee benefits & workplace predictions: Health care landscape

By Lilly Peterson - Costs have always been a concern for both employees and employers when it comes to health care. Benefits pros are constantly thinking about how to save money for employers while premiums continue to rise. It’s a battle, but a battle worth fighting. Read Full Article…

VBA Article Summary

  1. Revolutionizing Healthcare Payment Models: Industry leaders like Ashok Subramanian from Centivo emphasize the need for a transformative approach in healthcare financing. The traditional payment structure, focused on the volume of care, is shifting towards value-based models. This transition is evident in sectors like Pharmacy Benefit Management, with CVS pioneering new methods for prescription drug payments. Employers are at the forefront of this change, demanding transparency and aligning incentives between themselves and healthcare providers. They seek solutions that promote clarity in provider payments, aiming to pay for the quality of care rather than the quantity. This paradigm shift is expected to enhance the efficiency and effectiveness of healthcare services, reflecting a broader trend in the industry's evolution.

  2. Elevating Maternal Health and Support Services: The U.S. faces a critical challenge with its increasing maternal mortality rates, despite its advanced healthcare infrastructure. Dr. Asima Ahmad of Carrot Fertility highlights the growing acknowledgment of comprehensive support for maternal health. Recent advancements, such as the FDA's approval of new treatments for postpartum depression and the rise of doula services, demonstrate a commitment to enhancing maternal care. The expectation for 2024 is a continued increase in investment in these areas, especially in offering doula care, both in-person and virtual. The focus is on improving access to care and health outcomes, particularly for marginalized communities, indicating a significant shift towards a more inclusive and supportive healthcare system for mothers.

  3. Strategic Management of Escalating Healthcare Costs: Tracy E. Spencer from Aon outlines the critical challenge HR leaders face in managing rising healthcare costs without compromising on the quality of employee benefits. With healthcare expenses projected to increase by 8.5% in 2024, companies are exploring innovative strategies to control costs while ensuring medical appropriateness and sustainable outcomes. Approaches include managing the utilization of GLP-1 drugs, known for their increasing contribution to healthcare spending, and integrating comprehensive plan designs and specialized networks. Employers are also investing in holistic support solutions, including behavioral health programs, to ensure long-term health and financial sustainability. This strategic approach to healthcare cost management reflects a broader trend towards a more balanced and proactive model in employee healthcare benefits.

2024 Outlook: Will legislators pass meaningful reforms to PBMs? The jury is still out

By Paige Minemyer - There has been no shortage of conversation around pharmacy benefit managers this year, but actual action from legislators has been slow. Read Full Article…

VBA Article Summary

  1. Political and Legislative Landscape: The prospect of significant healthcare reform in 2024, specifically addressing transparency and practices of pharmacy benefit managers (PBMs), faces a complex political and legislative environment. Despite a clear priority set by policymakers and an indication of strong intent from Congress, the pace of actual progress remains uncertain. The presidential election year, ongoing international conflicts, and other budget priorities are factors that could potentially overshadow or delay healthcare reform initiatives. Alan Gilbert from the Purchaser Business Group on Health suggests that while reforms could be integrated into early-year legislation, there is also a possibility of continuous deferrals.

  2. Focus on Pharmacy Benefit Managers (PBMs): Policymakers are increasingly concerned about the opacity surrounding PBMs, particularly as drug prices soar. The House of Representatives recently passed the Lower Costs, More Transparency Act, targeting PBM practices like spread pricing. The bill reflects a broader trend toward demanding more transparency and accountability from PBMs. Alongside legislative actions, federal regulators are scrutinizing the vertical consolidation in the PBM industry, with major players like CVS Health's Caremark, Cigna's Express Scripts, and UnitedHealth Group's Optum Rx under investigation. The industry's dominant structure and its potential effects on market competition and healthcare costs are central concerns.

  3. Market Response and PBM Initiatives: While legislative and regulatory pressures mount, the market is not static. Some insurers are reevaluating their relationships with traditional PBMs, seeking more diversified and transparent models. For instance, Blue Shield of California is transitioning away from Caremark to a new model involving multiple firms. On the other side, PBMs are responding to the changing landscape by introducing more transparent models and collaborating more closely with independent pharmacies. Express Scripts and its peers are making strides with new initiatives and models aimed at addressing transparency, cost-effectiveness, and support for local pharmacies. However, despite these efforts, skepticism remains about the industry's willingness and ability to self-reform effectively.

What to Know About the FDA’s Recent Decision to Allow Florida to Import Prescription Drugs from Canada

By Meredith Freed, Juliette Cubanski, and Tricia Neuman - On January 5, 2024, the FDA authorized the state of Florida to import certain prescription drugs from Canada, an approach designed to give Floridians access to lower drug prices paid by people in Canada. Read Full Article…

VBA Article Summary

  1. FDA's Authorization and Its Implications for Florida: The FDA has authorized Florida's drug importation program from Canada for two years, with potential savings of up to $183 million in its first year, primarily benefiting the state's Medicaid program. This decision, influenced by federal and state-level bipartisan discussions and regulatory frameworks established since 2020, marks a political victory and aligns with the Biden Administration's broader efforts to reduce prescription drug costs, as seen in the Inflation Reduction Act of 2022.

  2. Challenges in Implementing the Importation Plan: Despite FDA approval, Florida faces significant implementation hurdles. The state must comply with stringent FDA requirements for each drug importation, including quality testing and labeling standards. Additionally, external obstacles such as possible Canadian restrictions on drug exports to protect their national supply and legal challenges from entities like the Pharmaceutical Research and Manufacturers of America (PhRMA) pose further impediments. These factors contribute to the uncertainty surrounding the realization of the plan's full potential.

  3. Scope and Limitations of the Importation Program: The scope of Florida's importation program is restricted to specific state agencies and government programs, excluding individuals with other insurance types or the uninsured. The program initially targets drugs for conditions like HIV/AIDS, mental health, and prostate cancer, but excludes high-cost biological products and infused drugs. While the FDA's green light is a step forward, the program's limited reach and the substantial challenges ahead indicate that the problem of high drug prices will likely persist as a significant concern.

By Amanda Norris - While operating margins continue to grow and stabilize, are CFOs in the clear? Not so fast. Now that health system financial results for the third quarter and first nine months of 2023 have all come in, it gives CFOs a chance to examine the overall trends. Read Full Article…

VBA Article Summary

  1. Persistent Financial Challenges and Operational Adjustments: Despite some health systems reporting revenue growth, the financial landscape for hospitals remains fraught with challenges. Operating losses have increased for many, including notable entities like CommonSpirit and Community Health Systems, highlighting the need for robust cost management strategies. Hospital CFOs are under pressure to monitor and mitigate escalating expenses, especially in areas like employee compensation and supply costs.

  2. Diverse Financial Performance and Strategic Responses: The financial outcomes among healthcare systems show significant variability. While organizations like Kaiser Permanente and Universal Health Services experienced net income growth, others, such as Providence, faced heightened operating losses. Investment outcomes also varied, with entities like CommonSpirit reporting substantial net investment losses. This underscores the importance for CFOs to continuously fine-tune financial strategies, focusing on optimizing revenue streams, scrutinizing investment decisions, and maintaining a vigilant eye on operating margins.

  3. Strategic Focus on Cost Management and Revenue Optimization: Amidst the financial turbulence, certain healthcare systems like Christus Health and Mayo Clinic demonstrated positive financial performance, signaling the effectiveness of adept financial management and operational strategies. However, challenges like increased expenses due to wage hikes, as experienced by Providence and Mayo Clinic, persist. Looking forward, hospital CFOs are expected to maintain a steadfast commitment to strategic principles like revenue optimization, expense control, vigilant investment monitoring, and comprehensive cost management to navigate the intricate financial landscape of the healthcare sector.

UnitedHealth’s self-dealing is accelerating

By Sara Sirota and Krista Brown - UnitedHealth Group’s internal revenue streams totalled $138 billion in 2023, up more than 25% compared to last year. It’s doing more business with itself than ever before. When its insurance division pays for an enrollee to visit a primary care physician it employs, despite having alternative options with competing practices, one subsidiary is simply reimbursing another. Read Full Article…

VBA Article Summary

  1. Rising Internal Transactions within UnitedHealth: UnitedHealth has been increasingly functioning as a self-contained entity, with a significant portion of its transactions occurring internally. This is evident from the financial data revealing that a notable 27.5% of UnitedHealth's pre-elimination revenue in the fourth quarter of 2023 came from its subsidiary, Optum. This trend is not new; the company's inter-subsidiary dealings have been steadily growing, nearly doubling over 16 years. In contrast, competitors like Cigna and CVS have much lower rates of internal eliminations, indicating a distinctive operational model within UnitedHealth.

  2. Optum's Market Dominance and UnitedHealth's Strategic Moves: Optum's significant market presence in various healthcare sectors is a key factor in UnitedHealth increasingly doing business with it. Optum's dominance across physician services, pharmacy benefits management, and healthcare analytics positions it as a preferred provider within UnitedHealth. However, this internal preference raises concerns about potential financial motivations, such as avoiding the medical loss ratio and maximizing profits, which may not align with public interest. The growth of internal transactions predates certain regulatory requirements, suggesting a strategic approach by UnitedHealth to consolidate market control and ensure Optum's success.

  3. Concerns and Future Directions: The increasing trend of internal transactions at UnitedHealth, particularly with Optum, raises several concerns. It potentially limits the choice and quality of care for patients, as evidenced by lawsuits accusing UnitedHealthcare of steering patients to Optum care. Furthermore, while Optum's revenue from external insurers has grown, this growth has plateaued, prompting questions about the company's business model and its implications for the healthcare market. The evolving relationship between UnitedHealth and Optum warrants further scrutiny and will be the subject of future investigative efforts.

Join our LinkedIn Community!

Caregivers Look to Employers for Financial Wellbeing

By Amanda Umpierrez - A Workplace Wellness Survey (WWS) issued by the Employee Benefit Research Institute (EBRI) and Greenwald Research examines how caregiving workers are juggling their day-to-day responsibilities along with work and finances. Read Full Article…

VBA Article Summary

  1. Financial Wellbeing of Caregivers vs. Non-Caregivers: The 2023 Workplace Wellness Survey highlights a discrepancy between caregivers and non-caregivers in terms of financial wellbeing. Despite having similar incomes and asset levels, caregivers are more likely to rate their financial wellbeing lower than non-caregivers. They are less likely to consider their financial status as good or excellent, less prepared for emergency expenses, and more stressed by medical-related costs. Moreover, caregivers find it challenging to balance work and caregiving responsibilities, indicating a significant impact on their overall wellbeing.

  2. Role of Employers in Supporting Wellbeing: Both caregivers and non-caregivers look towards their employers for support in mental, physical, and financial wellbeing. However, the report indicates a disparity in the availability and satisfaction with employer-provided benefits, especially among lower-income caregivers. Despite this gap, researchers emphasize the potential role employers have in positively influencing their employees' wellbeing by tailoring benefits and support programs, especially for those with caregiving responsibilities.

  3. Demographic Trends and Corporate Responsibility: The survey sheds light on the substantial and growing segment of caregivers in the workforce, urging Human Resource professionals and employee benefit providers to acknowledge and address the unique needs of this group. With nearly a quarter of the workforce being caregivers—a number expected to increase due to an aging population—the findings advocate for a more inclusive and supportive corporate culture that helps caregivers thrive both in their professional roles and in their caregiving responsibilities at home.

2024's great debate: Are you for or against RTO?

By Alyssa Place - The new year is supposed to be a fresh start. But for many employers and employees, it's the same old debate around the best way — and place — to get work done. Read Full Article…

VBA Article Summary

  1. Reconsidering the Return-to-Office (RTO) Strategy: Resume Builder projects that 90% of employers will call employees back to the office this year. However, the approach often lacks a well-thought-out strategy for making the office a conducive environment for collaboration, culture, and connection, as noted by Larry English of Centric Consulting. While a hybrid model of remote and in-person work is being adopted, it's essential for employers to understand the unique challenges it presents, such as the lack of social connection for remote workers and the potential for preferential treatment towards in-person employees.

  2. Prioritizing Inclusivity and Mental Health: Employers are encouraged to be more intentional in creating an inclusive office environment. This involves considering the specific needs of all employees, including those with disabilities, neurodivergence, or caregiving responsibilities. A focus on mental health and well-being is also crucial in today's post-pandemic work environment. Failing to address these aspects can lead to a disconnect and affect employees' sense of safety and productivity.

  3. Navigating New Recruiting Strategies and Employee Retention: While some employers are adapting their strategies to support a more inclusive and considerate work environment, others are taking a more rigid approach by enforcing immediate RTO for new hires. This strategy aims to reinforce the company's RTO policy but may lead to dissatisfaction among long-term employees, potentially resulting in higher turnover rates. The shift in job descriptions to favor in-office work for new employees highlights the need for a balanced approach that respects the preferences and requirements of all staff members.

Gene Editing Needs to Be for Everyone

By Jennifer Doudna - At the end of 2023, we witnessed an important moment in the history of medicine: For the first time, the US Food and Drug Administration approved a therapy that uses Crispr gene editing. This new therapy was developed by Crispr Therapeutics and Vertex Pharmaceuticals to treat sickle cell disease, an ailment caused by a single-letter mutation in the genetic code that has been long understood but was neglected by the research community for decades. Read Full Article…

VBA Article Summary

  1. Remarkable Progress in Gene Editing: This article highlights a significant milestone in the field of gene editing, particularly emphasizing the success of a gene-editing therapy for sickle cell disease. Victoria Gray, a patient who underwent this therapy, has been symptom-free for four years, suggesting that the treatment could potentially be a cure. The article also notes the rapid advancement in this field, with the development of Crispr-based therapies addressing a variety of conditions such as high cholesterol, inflammatory diseases, and chronic infections.

  2. The Speed of Medical Innovations and Public Expectations: The author reflects on the swift progress from the conceptualization of Crispr as a gene-editing tool in 2012 to its practical application in therapies within a decade. Despite this rapid development, there is a growing impatience among those awaiting treatment, highlighting the urgency and hope pinned on Crispr technology to address rare and neglected genetic diseases.

  3. Challenges in Accessibility and Affordability: The article discusses the high cost and limited availability of the new gene-editing therapies, comparing the initial market trends to those of past technological advancements like smartphones and laptops. It stresses the importance of not treating life-saving medicine as a luxury and outlines the steps being taken towards making future gene-editing therapies more affordable and accessible. This includes the development of new technologies for in vivo delivery, improved manufacturing processes, and the formation of strategic partnerships among universities, government, and industry with the common goal of affordability.