FTC Issues 2nd Report Exposing Practices of Pharmacy Benefit Managers

By Remy Samuels - The Federal Trade Commission published a second interim report on Tuesday on prescription drug middlemen, this time focusing on the influence pharmacy benefit managers have had on price markups for drugs treating cancer and HIV, among other illnesses. Read Full Article…

HVBA Article Summary

1. FTC Report Highlights PBM Pricing Practices: The FTC’s latest analysis found that the three largest pharmacy benefit managers (PBMs) significantly marked up specialty generic drugs dispensed at their affiliated pharmacies, generating over $7.3 billion in revenue from 2017 to 2022. These PBMs also reimbursed their own pharmacies at higher rates than independent pharmacies and engaged in spread pricing, leading to increased costs for plan sponsors and patients.

2. Plan Sponsors’ Fiduciary Responsibilities: Under the Consolidated Appropriations Act of 2021, plan sponsors must ensure that the fees they pay for healthcare plans are fair and reasonable. Experts warn that many plan sponsors may unknowingly enter agreements that do not align with their fiduciary duties under ERISA, underscoring the need for independent specialists to evaluate PBM contracts and pricing structures.

3. Calls for Legislative Action and Increased Oversight: The FTC recommended further scrutiny of specialty generic drug pricing and PBM steering practices. Industry groups, such as the ERISA Industry Committee, have urged Congress to classify PBMs as fiduciaries under ERISA to enhance transparency and accountability in prescription drug cost negotiations, though no legislative action has been taken yet.

44M people enrolled in ACA coverage programs: KFF study

By Paige Minemyer - About 44 million people were covered under one of the Affordable Care Act's (ACA's) initiatives, from the insurance marketplaces to Medicaid expansion, according to a new report from the KFF. Read Full Article…

HVBA Article Summary

1. Record ACA Enrollment Growth: ACA marketplace enrollment reached a record 21.4 million in 2024, nearly doubling from 2020. Medicaid expansion also grew significantly, covering 21.3 million people, a 41% increase from 2020, while Basic Health Program enrollment rose to 1.3 million.

2. Impact of Expiring Premium Subsidies: Enhanced premium subsidies were a key driver of ACA enrollment growth, but they are set to expire at the end of the year. Without renewal, premium costs could rise by 75% on average, potentially leading to 3.8 million people losing coverage.

3. Political and Policy Uncertainty: A new administration and congressional changes could impact Medicaid expansion, particularly in states with trigger laws that could end or alter expansion if federal funding decreases. Additionally, officials favoring spending cuts could influence ACA-related funding and coverage levels.

CMS selects Ozempic, 14 other drugs for Medicare price negotiations

By Alexandra Murphy - CMS has named 15 additional prescription drugs, including diabetes medication Ozempic, for price negotiations under the Inflation Reduction Act. This marks the second round of negotiations aimed at reducing drug costs for Medicare beneficiaries. Read Full Article…

HVBA Article Summary

1. Impact on Medicare Spending: The selected 15 drugs account for approximately $41 billion, or 14% of Medicare Part D's prescription drug costs from November 2023 to October 2024. Negotiated price reductions for these medications are set to take effect in 2027, reflecting efforts to curb high drug costs for seniors.

2. Broad Therapeutic Coverage: The drugs included in the negotiations treat a variety of conditions, such as cancer, Type 2 diabetes, and asthma. High-profile medications like Ozempic, Wegovy, and Ibrance highlight the focus on some of the most expensive and widely-used treatments under Medicare.

3. Building on Prior Success: The second round of negotiations builds on the first cycle's achievements, which secured price reductions for 10 drugs effective in 2026. If applied in 2023, the newly negotiated prices are estimated to have saved Medicare beneficiaries $6 billion, underscoring the Inflation Reduction Act’s potential to deliver financial relief for seniors.

Employers outline health priorities under Trump

By Kelly Hooper - EMPLOYERS’ ASKS — Groups representing employers that offer health insurance are gearing up to defend and try to bolster the largest source of health coverage for people under 65 in the U.S., your host reports. Read Full Article…

HVBA Article Summary

1. Potential Changes to Employer-Sponsored Health Insurance: The Trump administration and Republican-led Congress could revisit capping the tax exclusion for employer-sponsored health insurance, a move conservative groups support to reduce government costs but that employer groups strongly oppose, fearing it could lead companies to drop coverage.

2. Push for Greater Transparency and Competition: Employers want the new administration to strengthen health care price transparency and address hospital consolidation, building on Trump’s previous efforts to mandate public pricing by insurers and hospitals, though compliance has been inconsistent.

3. Reevaluating Mental Health Parity Rules: Employer groups are urging a review of the Biden-era mental health parity rule, arguing that it could drive up costs and reduce care quality due to provider shortages, and they plan to push for adjustments under the Trump administration.

Justice Department sues Walgreens over alleged part in opioid crisis

By Madeline Ashley - The Justice Department on Jan. 16 filed a civil complaint against Walgreens Boots Alliance and its subsidiaries alleging unlawful dispensation of millions of prescriptions in violation of the Controlled Substances Act. Read Full Article…

HVBA Article Summary

1. Allegations of Unlawful Prescription Filling: The Justice Department alleges that Walgreens knowingly filled millions of invalid controlled substance prescriptions since 2012, including excessive opioids, early refills, and the dangerous "trinity" drug combination, despite clear red flags and internal warnings.

2. False Claims Act and CSA Violations: Walgreens is accused of violating the Controlled Substances Act (CSA) by knowingly filling unlawful prescriptions and the False Claims Act (FCA) by seeking reimbursements from federal health programs for these prescriptions, potentially facing severe financial penalties.

3. Walgreens’ Defense and Legal Stance: Walgreens disputes the allegations, arguing that the government is enforcing arbitrary rules that were never formally established. The company asserts its pharmacists follow legal guidelines and are committed to combating opioid misuse while seeking clarity on pharmacy responsibilities.

How benefits advisors can navigate changes in 2025

By Katie Pitts - As we head into 2025, the benefits landscape is poised for significant transformation. While much is still unknown about the incoming administration and the specific changes we may see, a more relaxed regulatory environment could open the door for even greater innovation than we’ve experienced in previous years, empowering employers to tackle longstanding challenges in new and creative ways. Read Full Article… ^{_{(Subscription required)}} 

HVBA Article Summary

1. Balancing Cost and Employee Value: Employers face increasing pressure to control rising health care costs while maintaining benefits that align with employee expectations. Benefits advisors can help by auditing existing programs, reallocating resources to high-impact areas like mental health and chronic condition management, and ensuring benefits remain relevant through regular assessments.

2. Innovative Funding and Cost-Control Strategies: Employers must explore alternative funding models, such as level funding, self-funding, and HRAs, to optimize health care spending. Additionally, strategies like direct primary care (DPC), reference-based pricing (RBP), and pharmacy optimization offer ways to improve care quality while controlling expenses. Benefits advisors are key in guiding clients through these emerging opportunities.

3. Customizing Benefits for a Diverse Workforce: One-size-fits-all benefits programs no longer meet the needs of today’s multigenerational workforce. Employers should tailor benefits to accommodate different priorities, from mental health and financial wellness tools for younger employees to retirement planning and lower-cost health care options for older generations. Benefits advisors play a crucial role in designing targeted, data-driven benefits strategies that enhance employee satisfaction and retention.

What to expect in US healthcare in 2025 and beyond

By Shubham Singhal and Neha Patel - Since 2019, the United States healthcare industry has experienced substantial financial pressure, with industry EBITDA as a proportion of the National Health Expenditure declining by an estimated 150 basis points (Exhibit 1). The decline has hit payers and providers particularly hard—payers’ estimated margins in 2024 could be at their lowest in a decade.. Read Full Article… ^{_{(Subscription required)}} 

HVBA Article Summary

1. Financial and Operational Challenges Persist: The healthcare industry continues to grapple with inflationary pressures, labor shortages, and constrained reimbursement growth, exacerbated by shifts in payer mix, with Medicaid and Medicare enrollment rising from 43% in 2019 to 45% in 2023. Utilization rates remain below pre-pandemic levels, creating additional uncertainty for providers and payers.

2. Growth Opportunities in Key Segments: While many healthcare segments are expected to recover from post-pandemic lows, certain areas such as Health Services and Technology (HST) and specialty pharmacy are projected to experience accelerated growth. HST revenue pools are forecasted to grow at an 8% CAGR from 2023 to 2028, driven by innovations like generative AI, while specialty pharmacy revenues are also expected to rise due to increased utilization and new therapy launches.

3. Shifting Market Dynamics and Policy Impacts: The healthcare landscape is being reshaped by payer mix changes, regulatory adjustments, and evolving reimbursement models. Medicare Advantage plans are facing financial pressure due to regulatory changes, Medicaid managed-care economics remain uncertain due to redeterminations, and commercial payers are adjusting to enrollment shifts. Policy and regulatory changes from the 2025 federal administration transition could further influence market dynamics in the coming years.

UnitedHealth CEO says U.S. health system 'needs to function better'

By Rob Wile - The CEO of UnitedHealth Group said Thursday that shortcomings of America’s health care system must be addressed. On the company’s first earnings call since the fatal shooting of UnitedHealth executive Brian Thompson, CEO Andrew Witty said that while the U.S. provides world-leading care in many respects, there are systemic flaws that are working to drive up health costs for people in the country. Read Full Article…

HVBA Article Summary

1. Complexity and Costs in U.S. Health Care – UnitedHealth CEO Andrew Witty criticized the fragmented nature of the U.S. health system, highlighting the complexity, confusion, and high costs created by a mix of state, federal, and private sector programs.

2. Pharmaceutical Pricing and PBM Role – Witty blamed drug companies for high U.S. drug prices, particularly citing the weight loss drug GLP, which costs significantly less in Europe. He defended UnitedHealth’s pharmacy benefit managers (PBMs), asserting they work to pass savings to consumers, while PhRMA pushed back, arguing that PBMs inflate prices.

3. Financial Performance and Industry Challenges – Despite record revenues in 2024, UnitedHealth reported disappointing quarterly results, causing a stock drop. Witty acknowledged systemic issues in the profit-driven healthcare model but did not address UnitedHealth’s own role in benefiting from high costs.