The Potential for AI in Drug Design

By Shane Reeves - Drug design and development is expensive, often insufficient, and laced with the tendency for failure. Traditionally, it’s a hit-and-miss process that can stretch over a decade and consume around $2.3 billion — figures that have only climbed higher recently; with a 15% increase in costs among top global biopharmaceutical firms last year alone. Read Full Article…

HVBA Article Summary

1. Accelerating Drug Design with AI: AI, particularly through machine learning models, expedites drug design by swiftly identifying promising compounds and optimizing molecular structures. This capability reduces development time and costs significantly, enabling exploration of a wider range of potential therapies.

2. Predicting Protein Structures: AI tools like AlphaFold and MATLAB predict 3D structures of target proteins, facilitating accurate drug formulation. These tools utilize advanced machine learning models to convert amino acid sequences into spatial information and refine structures into viable drug molecules, promising precise and efficient drug design.

3. AI in Clinical Trials and Medical Practice: AI-designed drugs have entered clinical trials, showing promising initial results. Beyond drug design, AI streamlines medical practices such as local infusion centers, improving operational efficiency, reducing patient wait times, and enhancing overall patient care through optimized resource allocation and workflow management.

DOL Argues That Class Action Waivers in Plan Agreements Are Unenforceable

By Paul Mulholland - The Department of Labor filed an amicus brief to the U.S. 6th Circuit Court of Appeals in May which argued that a mandatory arbitration provision in a 401(k) plan document is unenforceable if it is tied to a class-action waiver. Read Full Article…

HVBA Article Summary

1. Case Background and Allegations: Tanika Parker et al. sued Tenneco, Inc. in April 2023, alleging excessive fees in their retirement plan. Tenneco argued for individual arbitration based on plan documents, but the district court disagreed, citing that mandatory arbitration with a class action waiver denies participants the statutory right to seek plan-wide relief under ERISA.

2. Appeal and Department of Labor's Position: Tenneco appealed to the U.S. 6th Circuit Court of Appeals, where the Department of Labor (DOL) filed an amicus brief supporting the district court's decision. The DOL argued that the arbitration clause's non-severable provisions, which bar class actions and plan-wide relief, undermine ERISA rights. This stance was reinforced by the DOL's supplementary brief in response to a similar 2nd Circuit decision, emphasizing the need for plan-wide remedies under ERISA.

3. Supreme Court's Inaction and Circuit Precedents: Despite the Supreme Court declining to hear related cases in October 2023, various Circuit Courts, including the 2nd, 3rd, and 10th Circuits, have consistently ruled against enforceability of arbitration clauses with class action waivers in ERISA cases. This trend supports plaintiffs seeking collective relief for fiduciary misconduct in retirement plans.

How Covered Entities and Pharma Companies Can Better Collaborate on Drug Discount Programs

By Daryl Todd - The 340B drug discount system, created to ensure that manufacturers could continue to provide low-cost drugs to safety net providers — called Covered Entities (CEs) — is broken. Read Full Article…

HVBA Article Summary

1. Complex Interactions and Duplicate Discounts: The 340B Drug Discount Program, established in 1992, aimed to lower outpatient drug costs for Covered Entities (CEs). However, the program's growth has led to significant confusion, particularly in interactions with the Medicaid Drug Rebate Program (MDRP). This confusion has resulted in billions of dollars in duplicate discounts due to ambiguous patient definitions and overlapping claims among multiple CEs.

2. Transparency and Accountability Deficits: Lack of transparency among stakeholders—drug manufacturers, CEs, and state Medicaid agencies—has exacerbated issues within the 340B program. Archaic data management tools and inconsistent reporting practices further hinder trust and compliance, fostering an environment where inadvertent noncompliance and intentional abuse thrive.

3. Path Forward: Enhancing Collaboration and Trust: Addressing these challenges necessitates enhanced collaboration and transparency. Stakeholders must prioritize transparency in rebate claim data sharing, adopt modernized tools to manage program complexities, and streamline dispute resolution processes. These steps are crucial for restoring trust, reducing disputes, and ensuring the program's integrity aligns with its original purpose of delivering affordable medications to American consumers.

PSNC 2024: I Survived an Audit

By Noah Zuss - Receiving a notice that your plan is under audit is unwelcome and scary, but plan sponsors who have experienced audits shared their insights, especially regarding the mechanisms sponsors can put in place to lessen the inconvenience and disruption. Read Full Article…

HVBA Article Summary

1. Early Preparation and Organization: Plan sponsors should proactively gather and organize all necessary documents well in advance of an audit. This includes setting up shared digital folders and clarifying internal responsibilities to streamline the audit process.

2. Critical Documentation Readiness: Essential documents such as the plan's summary plan description, investment policy statement, and plan amendments must be readily accessible. This preparation ensures compliance with regulatory requirements and facilitates prompt response to auditor requests.

3. Established Committee Structures and Roles: Formalizing plan committee structures and clearly defining roles within the sponsor organization is crucial. This clarity helps ensure that responsibilities, decision-making authority, and procedural knowledge are documented and accessible, reducing the risk of confusion or delays during an audit.

Employer coverage for weight-loss drugs rises sharply, survey finds

By Amina Niasse - About one-third of U.S. employer health plans are offering coverage of GLP-1 drugs for both diabetes management and weight loss, up from last year, according to a survey of global employers released on Thursday by the International Foundation of Employee Benefit Plans. Read Full Article…

HVBA Article Summary

1. Increasing Adoption and Spending: GLP-1 drugs for weight loss grew as a share of employers' medical claims spending, rising to 8.9% in 2024 from 6.9% in 2023. Despite this, only 26% of employers offered these drugs last year.

2. Mechanism and Demand: GLP-1 drugs like Novo Nordisk's Wegovy and Eli Lilly's Zepbound promote weight loss by reducing appetite and slowing stomach emptying. Originally approved for diabetes, they have shown efficacy in weight reduction, up to 20%, driving high demand.

3. Future Outlook and Challenges: Despite potential global sales reaching $150 billion annually by the early 2030s, insurer resistance remains a significant hurdle. Only 40 million of the 110 million obese Americans currently have access to these drugs through healthcare plans, limiting sales growth potential.

IU Health to remove noncompete clauses for primary care providers

By Madeline Ashley - Indianapolis-based IU Health has shared plans to cut noncompete clauses from all contracts with practicing primary care providers, effective Dec. 15. Read Full Article…

HVBA Article Summary

1. FTC Action Spurs Change: IU Health's decision to eliminate noncompete clauses for primary care providers follows the Federal Trade Commission's recent vote to ban such agreements, signaling a broader shift away from restrictive employment practices.

2. Legislative Influence: The move aligns with legislation passed by the Indiana General Assembly in 2023, which prohibited noncompete clauses for new primary care providers. Although existing contracts were unaffected by the law, IU Health opted to extend this benefit to current physicians, emphasizing a commitment to fostering a more open healthcare environment.

3. Strategic Adjustment: Concurrent with this policy change, IU Health introduced new employment agreements for its medical group, the IU Health Medical Group, which will omit noncompete clauses starting from August 1. This adjustment aims to support physicians in delivering uninterrupted, high-quality care while potentially enhancing health outcomes across Indiana communities.

Supreme Court’s Connelly decision could impact buy-sell agreements

By Susan Rupe - A recent Supreme Court decision could have a major impact on the structuring of buy-sell agreements for closely held companies and the way life insurance is used to fund such arrangements. Read Full Article…

HVBA Article Summary

1. Court Decision Impact: The Supreme Court unanimously ruled that life insurance proceeds received by a closely held company from policies on shareholder's lives are considered assets, not liabilities, for federal estate tax purposes. This decision significantly impacts how the value of shares in such companies is calculated upon a shareholder's death, potentially increasing the taxable estate valuation.

2. Case Background: The case involved Crown C Supply, a family business where brothers Michael and Thomas Connelly held shares. Following Michael's death, Crown received $3.5 million in life insurance proceeds, which was used partially to buy back Michael's shares. The IRS disputed the valuation method, leading to a legal battle ultimately upheld by the Supreme Court in favor of the IRS's valuation.

3. Avoidance Strategies: Experts suggest using a cross-purchase buy-sell agreement instead of an entity-redemption arrangement to potentially avoid inflated company valuations for estate tax purposes. This alternative structure shifts the burden of funding the buyback of shares onto the surviving shareholders, potentially offering more tax-efficient outcomes despite some operational complexities. Business owners are advised to review and possibly revise existing agreements to align with current tax laws and estate planning strategies.

Tirzepatide Shows Improvements in MASH Resolution, Fibrosis

By Becky McCall - Tirzepatide, a glucose-dependent insulinotropic polypeptide (GIP) and glucagon-like peptide 1 (GLP-1) receptor agonist, was more effective than placebo was in the resolution of metabolic dysfunction–associated steatohepatitis (MASH) and in the improvement of fibrosis, according to the results of the phase 2 SYNERGY-NASH trial. Read Full Article…

HVBA Article Summary

1. Resolution of NASH with Fibrosis Improvement: Participants treated with tirzepatide showed significant resolution of NASH without worsening of fibrosis. Specifically, 44%-62% achieved this outcome compared to only 10% on placebo. Additionally, 51%-55% of tirzepatide-treated individuals experienced at least one stage improvement in fibrosis without worsening of NASH, contrasting with 30% on placebo.

2. Dose-Dependent Effects and Secondary Endpoints: The study demonstrated a dose-dependent response to tirzepatide, with higher percentages of participants achieving therapeutic endpoints at higher doses (5 mg, 10 mg, and 15 mg). Secondary endpoints, including improvements in NAFLD activity score (NAS) and individual NAS components, further supported the efficacy of tirzepatide in treating NASH.

3. Weight Loss and Safety Profile: Tirzepatide treatment also resulted in significant weight loss across dose groups (-10.7% to -15.6% body weight change from baseline), which was notably higher compared to placebo (-0.8%). Despite higher rates of gastrointestinal adverse events (92.3% vs 83.3% placebo), the safety profile of tirzepatide in the NASH population was generally consistent with previous trials in type 2 diabetes and obesity, with no evidence of drug-induced liver injury reported.

ERISA Industry Committee applauds appeals court ruling in Bristol v. Cigna

By Press Release - The ERISA Industry Committee applauded the Ninth Circuit Court of Appeals’ decision in Bristol SL Holdings, Inc. v. Cigna Health & Life Ins. Co., which affirmed the previous ruling by the U.S. District Court for the Central District of California, which determined that the state law breach of contract and promissory estoppel claims at issue are preempted by the federal Employee Retirement Income Security Act. Read Full Article…

HVBA Article Summary

1. Legal Advocacy and Collaboration: ERIC, the American Benefits Council, and the California Association of Health Plans joined forces to file an amicus brief in 2023. Their goal was to support a U.S. District Court's ruling in California that upheld ERISA preemption in benefit plan design decisions. This collaborative effort aimed to maintain national consistency in plan administration and underscored the real-world impacts of ERISA preemption on legal disputes.

2. Court Decision and Implications: The Ninth Circuit Court of Appeals reaffirmed the principles of ERISA preemption in a subsequent ruling. This decision was crucial as it underscored the significant operational disruptions and financial burdens faced by plan administrators when confronted with state-law claims that challenge federal ERISA regulations. The case highlighted the importance of upholding pre-authorization systems to manage healthcare costs effectively.

3. Case Background and Outcome: The case centered on Sure Haven, Inc., an out-of-network mental healthcare provider that went bankrupt. Its successor, Bristol SL Holdings, Inc., sued Cigna, arguing for payment based on a perceived promise for medical treatment. The Ninth Circuit's ruling determined that state-law claims asserting entitlements to payment conflicted with ERISA's federal framework, emphasizing ERISA's broad preemptive scope over state regulations concerning employee benefit plans.

Addressing Financial Toxicity in Head and Neck Cancer—A Crucial Imperative

By Leila J. Mady, MD, PhD, MPH; Zachary N. Goldberg, BS, BA and John R. de Almeida, MD, MSc - In the US, patients with cancer declare personal bankruptcy at a rate 2.65 times that of peers matched for age, sex, and zip code. For those who go bankrupt, risk of death increases 80%, suggesting that financial insolvency may outweigh the benefits of oncologic treatments. Read Full Article…

HVBA Article Summary

1. Impact of Financial Toxicity on Health Behaviors and Clinical Outcomes: Financial toxicity (FT) significantly influences health behaviors, particularly through cost-related nonadherence and deferred medical care, which can lead to poorer clinical outcomes and increased mortality rates. Despite widespread recognition of these consequences, routine assessment and mitigation strategies are notably absent in most National Cancer Institute–designated cancer centers.

2. Health Disparities and Financial Barriers in Clinical Trials: FT exacerbates health disparities in oncology care, particularly affecting non-White and Hispanic patients who experience disproportionate financial burdens related to clinical trial participation. The additional costs associated with trials, such as travel and lodging expenses, further limit diverse representation and generalizability of trial findings.

3. Addressing Financial Toxicity in Head and Neck Cancer Care: Patients with head and neck cancer (HNC) face heightened vulnerability to FT due to socio-economic disadvantages, high medical needs, and significant out-of-pocket expenses that persist long after treatment. Effective strategies include integrating FT screening tools into clinical workflows, enhancing financial navigation services, and promoting judicious use of resources to mitigate the economic impact on patients and caregivers.