Daily Industry Report - January 30

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)

By Cheri Wheeler - Last year was all about flexibility and wellbeing when it came to employee benefits. Although they’re still popular keywords used to attract job candidates, they’re so commonplace that they’re getting stale. Read Full Article…

VBA Article Summary

  1. Nontraditional Voluntary Benefits: Employers are advised to offer a range of voluntary benefits that employees can opt into according to their lifestyle needs. These benefits, which are not necessarily covered by the employer, include enhanced medical coverage, homeowner assistance, flexible paid time off, eldercare assistance, financial counseling, stress management services, and more. Such benefits are highly valued by employees, with 75% considering them essential to their job satisfaction and retention.

  2. Support with Student Loan Repayment: Given that a significant portion of the workforce is burdened with student loan debt, offering assistance with loan repayments can be a highly attractive benefit. Under the CARES Act, employers can contribute up to $5,250 annually towards their employees' student loans as part of educational assistance benefits. This support can be a compelling incentive for top talent, especially considering the prevalence of student debt among privately employed Americans.

  3. Employer-Assisted Housing (EAH) Programs: With the rising costs of living and high mortgage rates, EAH programs offer employees valuable support in achieving homeownership. These programs might include pre-tax income contributions to a homeowner savings plan, down-payment assistance, housing loans, and rental assistance. Such benefits not only help employees realize their dream of owning a home but also enhance their morale and company loyalty.

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 Industry 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

Join us Wednesday, January 31 | 12 pm EST

‘1 plus 1 equals 3’ — the co-CEO model in pharma

By Meagan Parrish - Amylyx Pharmaceuticals made waves in 2022 when its ALS drug Relyvrio became the first FDA-approved treatment shown to slow progression of the disease. Read Full Article…

VBA Article Summary

  1. Impressive Financial Performance and Viral Campaign Link: Relyvrio, developed by Amylyx Pharmaceuticals, exceeded Wall Street expectations by earning $98.2 million in Q2 of 2023, following Canadian approval. The company's prominence was bolstered by its association with the 2014 "ice bucket challenge," which raised $115 million for the ALS Association, contributing significantly to Relyvrio's development.

  2. Unique Co-CEO Leadership Model: Amylyx is led by co-CEOs Josh Cohen and Justin Klee, a rarity in larger, complex companies. A Harvard Business Review analysis found less than 100 companies with co-CEOs among the S&P 1200 and Russell 1000 between 1996 and 2020. While some critique this model citing examples of failures, others argue it brings diverse expertise and efficiency, with a study showing 60% of public companies with co-CEOs outperforming in shareholder value.

  3. Challenges and Future Plans: Despite facing regulatory challenges, including a rejection by European regulators, Cohen and Klee credit their co-CEO model for maintaining focus and problem-solving abilities, especially during difficult phases of Relyvrio's clinical development. Looking ahead, Amylyx plans to expand Relyvrio's reach and continue trials for other neurodegenerative diseases, with Cohen and Klee asserting that the co-CEO structure remains advantageous for the company's balance of commercialization and R&D

Has Medicare Advantage lost its luster?

By Rylee Wilson - Though Medicare Advantage enrollment keeps climbing, the program may not have the profitability it once did for insurers. Read Full Article…

VBA Article Summary

  1. Declining Profits and Rising Costs in Medicare Advantage (MA): Moody's analysis indicates that despite a 40% increase in premiums and members from 2019 to 2022, earnings among insurers in the Medicare Advantage program shrunk by 2.1%. Major insurers like Humana and UnitedHealth Group are experiencing significant financial setbacks, with Humana reporting a $541 million loss in Q4 of 2023. This downturn is attributed to increased medical costs, including the impact of new vaccines like the RSV vaccine, and lower reimbursement rates from CMS.

  2. Market Dynamics and Competitive Landscape: The Medicare Advantage market is dominated by a few large players like UnitedHealth and Humana, who together controlled nearly half of the market in 2023. While these larger organizations have managed to grow earnings and maintain margins, smaller payers are struggling with profitability. The article also notes a potential shift in the market, with companies like Cigna considering the sale of their MA segment and investors showing interest in businesses with a smaller MA portfolio.

  3. Future Outlook and Challenges for Medicare Advantage: Despite the current challenges, Medicare Advantage is still a growing market, with projections suggesting it will account for 62% of Medicare enrollment by 2033. However, insurers are facing a dual challenge of increasing costs and impending changes to the risk adjustment program by CMS, which could lead to reduced benefits in MA plans. Insurers like Humana’s CEO Bruce Broussard express confidence in the long-term viability of the sector, emphasizing the need for innovative responses to these challenges.

Generic drug group sues to block Illinois drug pricing law

By Brendan Pierson - The leading U.S. generic drug industry group said Thursday that it is asking a court to block Illinois from enforcing a state law capping price increases for certain generic drugs. Read Full Article…

VBA Article Summary

  1. Legal Challenge Against Illinois Law: The Association for Accessible Medicines (AAM) has filed a lawsuit in federal court in Chicago against a recent Illinois law regulating the pricing of essential generic drugs. This law, effective this month, is challenged on the grounds of violating the U.S. Constitution's Commerce Clause. AAM argues that the law unlawfully regulates commerce outside Illinois borders since it applies to any drugs that eventually reach the state.

  2. Scope and Impact of the Illinois Law: The Illinois legislation targets pricing practices in the generic drug industry, which constitutes 91% of drug sales in the U.S. It sets limits on price increases for essential generic and biosimilar drugs sold in Illinois, including those on the World Health Organization's list of essential medicines. Price increases are capped at specific percentages over one, three, and five-year periods unless justified by increased costs. This law aims to curb significant price hikes in the generic drug market, which have been a concern in recent years.

  3. Implications for Drug Manufacturers and Precedents: Most AAM members, including major pharmaceutical companies like Amneal Pharmaceuticals, Teva Pharmaceuticals, and Sandoz, operate outside Illinois and engage in transactions with wholesalers in other states. AAM contends that the Illinois law could regulate transactions occurring entirely outside Illinois, for example, a Pennsylvania manufacturer selling to an Ohio wholesaler, if the drugs are ultimately sold in Illinois. The lawsuit also cites a recent instance where a Minnesota federal judge blocked a similar law, suggesting a precedent that might influence the outcome of the Illinois case.

Medical malpractice caps emerge in bill endorsed by Florida Senate committee

By Jim Saunders - Florida senators Monday began moving forward with a proposal that would make major changes in the state’s medical malpractice laws, including limiting pain-and-suffering damages in lawsuits against doctors and hospitals. Read Full Article…

VBA Article Summary

  1. Legislative Action on Malpractice Bill: The Florida Senate Judiciary Committee voted 8-2 in favor of a bill (SB 248) that originally aimed to revise a different medical malpractice law, but was later amended to include proposed caps on non-economic damages in malpractice cases. The proposed caps would limit the amount plaintiffs can receive in personal injury or wrongful death cases involving medical malpractice, setting a maximum of $500,000 from doctors and $750,000 from hospitals or nonpractitioners. Lower caps would apply to emergency care providers and Medicaid patient lawsuits, while economic damages are exempt from these caps.

  2. Debate Over Malpractice Caps: The bill has reignited a long-standing debate between various groups. Proponents, including doctors and insurers, argue that the caps are necessary to control malpractice insurance rates and attract doctors to Florida, citing the state's high malpractice statistics. However, opponents, including Senate Minority Leader Lauren Book, contend that the caps would unfairly limit compensation for victims of medical negligence, with no evidence that such cases are frivolously brought.

  3. Historical and Political Context: This legislative move follows a history of contested malpractice caps in Florida. Previous caps set in 2003 were overturned by the Florida Supreme Court in 2014 and 2017 for being unconstitutional. The current proposal attempts to address the Supreme Court's concerns, with Senate Judiciary Chairman Clay Yarborough noting the changed composition of the court since then. Additionally, the bill proposes changes to another law, allowing adult children and parents to seek damages in wrongful death cases, a move that has gained support from doctors and insurers when tied to the overall caps on non-economic damages.

Health care workers kept leaving the industry after pandemic: study

By Tina Reed - There's been a "substantial and persistent" increase in health care workers leaving the industry since the pandemic, as staff who stayed on during the worst of COVID-19 leave for new opportunities in a robust jobs market, according to a new study in JAMA Health Forum. Read Full Article…

VBA Article Summary

  1. Impact of High Exit Rates: The Johns Hopkins-led study, using Census data from 2018 to 2021, highlighted that the high exit rates in the health industry, though balanced by increased hiring, disrupt the continuity of care. This churn can lead to poorer patient outcomes, as healthcare providers increasingly operate with less-experienced staff. The study also noted a disproportionate number of women and Black workers leaving the industry.

  2. Challenges in Diversity and Regional Trends: The research found difficulties in recruiting Black workers post-pandemic, potentially worsening diversity issues in healthcare. Additionally, even though employment levels seemed to stabilize by the end of 2020, exit rates continued to increase, initially in the Northeast and then spreading to the South and West, remaining above pre-pandemic levels through 2021.

  3. Shift in Employment Trends and Policy Implications: Initially, most healthcare workers who left the industry at the pandemic's onset did not have alternative employment. However, by the end of 2021, the trend shifted, with many leaving for jobs outside of healthcare. This indicates a possible decline in the competitiveness of healthcare in the labor market. The study serves as evidence of the pandemic's long-lasting impact on the healthcare workforce, highlighting the need for policymakers to address issues like burnout and workforce development.

US FDA approves Dupixent to treat younger kids with esophageal condition

By Leroy Leo and Puyaan Singh - The U.S. health regulator has approved the use of Regeneron (REGN.O), opens new tab and Sanofi's (SASY.PA), opens new tab Dupixent to treat an allergic inflammation of the esophagus in children aged one to 11 years old and weighing at least 15 kg, the companies said on Thursday. Read Full Article…

VBA Article Summary

  1. FDA Approval and Impact on Eosinophilic Esophagitis (EoE): In 2022, the U.S. Food and Drug Administration (FDA) approved Dupixent, an anti-inflammatory drug, for treating eosinophilic esophagitis (EoE) in patients aged 12 and older, marking it as the first drug for this immune condition in the U.S. EoE is characterized by an accumulation of eosinophils, a type of white blood cell, in the esophagus, leading to damage and inflammation. This can severely affect the ability to eat. Approximately 21,000 children below 12 years in the U.S. are being treated for EoE, with around 9,000 not responding effectively to existing, unapproved therapies.

  2. Dupixent's Broader Applications and Costs: Dupixent, already used for treating conditions like eczema and asthma, achieved global sales of $8.68 billion in 2022. The drug is priced at $3,803.20 per carton for all EoE patients, although the actual cost to patients is expected to be lower. Notably, Dupixent demonstrated efficacy in a late-stage study, where a higher dose resulted in a less intense condition in 66% of patients under 12. The FDA's approval is anticipated to make Dupixent the first authorized drug for younger children with EoE. Early intervention with Dupixent may prevent complications like esophageal scarring and dysphagia (difficulty in swallowing).

  3. Future Endeavors and Regulatory Challenges: Regeneron and Sanofi, the companies behind Dupixent, are seeking U.S. approval for its use in treating chronic obstructive pulmonary disease (COPD), a condition affecting approximately 16 million Americans and a leading cause of death. COPD, often referred to as "smoker's lung", is a significant public health concern. However, the FDA previously declined to approve Dupixent for chronic spontaneous urticaria, an inflammatory skin disease, indicating regulatory challenges in expanding the drug's approved applications.

Can private equity firms help independent physician practices keep their independence?

By Christopher Cheney - Private equity-backed management services organizations (MSOs) are helping independent physician practices to remain independent. Read Full Article…

VBA Article Summary

  1. Management Services Organizations (MSOs) in Healthcare: MSOs, especially those backed by private equity, are increasingly popular among independent physician practices. They offer essential business functions like billing, compliance, IT, and accounting. This model helps practices like Arizona Digestive Health maintain their independence while gaining access to greater business talent and capital. Paul Berggreen, MD, emphasizes that clinical decision-making remains exclusively with the physicians, ensuring that medical practices can retain their autonomy and focus on quality care.

  2. Benefits and Independence for Physician Practices: Joining a private equity-backed MSO provides physician practices with significant advantages, including access to high-level business expertise and capital. This model allows practices to expand services, like opening new clinics in rural areas, without compromising their clinical independence. Berggreen, representing both Arizona Digestive Health and the American Independent Medical Practice Association (AIMPA), highlights that these MSOs function as neutral financial mechanisms, keeping the business and clinical aspects of a practice separate.

  3. Trends and Future Prospects of Private Equity-Backed MSOs: The trend of independent practices joining private equity-backed MSOs has grown significantly over the past decade. Berggreen notes that while private equity in healthcare has faced criticism, the MSO model demonstrates its potential for positive impact. With appropriate physician involvement in management, these partnerships can improve healthcare access and quality. Despite concerns, recent data suggests a growing positive trend in the effectiveness of MSOs, with many independent practices joining these arrangements in the last five years.

Medicare Roll Purge Pushes More People to 'Obamacare'

By Diccon Hyatt - More than 21.3 million people enrolled in Affordable Care Act (ACA) health insurance marketplace plans for the 2024 open enrollment period, a record high and a 16% surge from 2023, the White House said. Read Full Article…

VBA Article Summary

  1. Record Enrollment in ACA Plans: The Affordable Care Act (ACA) experienced its highest enrollment ever in 2024, with over 21.3 million people signing up for its health insurance marketplace plans. This marks a significant 16% increase compared to the previous year.

  2. Shift from Medicaid to ACA: A large number of individuals were removed from Medicaid this year due to the expiration of a pandemic-era protection. This led many of these individuals to seek health coverage through the ACA marketplace as an alternative.

  3. Reduced Costs Boosting ACA Appeal: Two key factors contributed to the increased popularity of ACA plans. Firstly, the extension of pandemic-era subsidies through 2025, under President Joe Biden’s Inflation Reduction Act, significantly lowered the cost of ACA plans. As a result, 80% of enrollees found coverage for less than $10 a month. Secondly, the open enrollment period, which ran from November to January 15 (with some states extending it to January 31), allowed more people to access these affordable plans.