Managing the Specialty Drug Cost Challenge: Is Your Pharmacy Benefits Strategy Ready for 2025?

By Stanley Crittenden - Medicine stands at a remarkable crossroads. The explosive growth in specialty drug development marks a new golden age of therapeutic innovation. In 1990 there were just 10 specialty drugs on the market. Read Full Article…

HVBA Article Summary

1. Escalating Specialty Drug Costs and Their Impact: The surge in specialty drug development, while offering revolutionary treatments for serious medical conditions, comes with unprecedented financial challenges. Employers face rising costs as specialty drugs now average over $5,000 annually per patient, with some therapies exceeding $1 million. This financial strain highlights the urgent need for cost-management strategies to balance access to transformative therapies with sustainable benefits budgets.

2. Proactive Utilization Management as a Cost-Control Strategy: Employers can mitigate specialty drug expenses through independent utilization management, which involves real-time data insights, rigorous authorization protocols, and exploration of cost-effective alternatives like biosimilars. Studies have shown this approach can deliver substantial savings, as evidenced by $35 million annualized savings across 200 employers in a recent analysis, while ensuring clinical efficacy and member well-being.

3. Optimizing Treatment Settings to Enhance Value and Experience: Transitioning care from high-cost hospital settings to more efficient locations like homes or medical offices can significantly reduce expenses, sometimes by nearly 50%, while improving patient convenience. For example, a shift to home-based treatment for a Crohn’s disease patient saved costs and improved the member’s quality of life and productivity. Employers are encouraged to prioritize site-of-care optimization as part of their benefits strategy.

As Trump Looms, Biden Forecasts Another Record Obamacare Year

By Bruce Japsen - The Biden administration predicted another record year of enrollment in individual coverage under the Affordable Care Act with several weeks remaining to sign up for such health benefits. Read Full Article…

HVBA Article Summary

1. Enrollment Momentum for 2025 Coverage: The Centers for Medicare & Medicaid Services (CMS) announced that nearly 500,000 uninsured individuals have already selected plans for the 2025 coverage year through the ACA marketplace, marking a promising start to open enrollment. Last year, a record-setting 21 million people enrolled for 2024 coverage, with CMS officials expressing optimism that the current enrollment period could surpass previous records. The open enrollment window runs from November 1, 2024, to January 15, 2025, with full-year coverage available for those enrolling by December 15, 2024.

2. Affordable Options and Expanded Access: Subsidies remain a significant factor driving ACA enrollment, with 80% of consumers able to secure quality health plans for $10 or less per month after financial assistance. Health and Human Services Secretary Xavier Becerra and CMS Administrator Chiquita Brooks-LaSure highlighted the critical importance of accessible, affordable healthcare, encouraging communities to take advantage of available plans. The ACA marketplace has been a growth engine for insurers, allowing companies like Centene, Cigna, and UnitedHealthcare to expand their individual market portfolios.

3. Uncertainty Under New Administration: The future of ACA coverage remains uncertain as President-elect Donald Trump prepares to assume office in January 2025. Although efforts to repeal the ACA failed during his previous term, Trump has not yet disclosed a comprehensive healthcare plan for his second term. His nomination of Dr. Mehmet Oz to lead CMS adds further unpredictability, with Senate confirmation hearings set to begin early next year. Observers are closely watching how the new administration will influence healthcare policy and the ACA marketplace.

IRS loosens rules on health plan coverage for preventive care

By Alan Goforth - The IRS has expanded its list of preventive care benefits for high-deductible health plans. Services that must be covered at no cost to policyholders now include condoms and breast cancer screenings other than mammograms, among other items. Read Full Article… ^{_{(Subscription required)}}

HVBA Article Summary

1. Expanded Definitions of Medical Care: The IRS, through Notice 2024-71, now recognizes male condoms as qualified medical care expenses. This update allows taxpayers to deduct amounts spent on condoms or have these expenses reimbursed under account-based health plans such as HSAs, HRAs, or FSAs. However, reimbursed expenses are not eligible for income tax deductions.

2. Pre-Deductible Coverage for HDHPs: Notice 2024-75 enables HSA-qualified high-deductible health plans (HDHPs) to cover over-the-counter oral contraceptives, male condoms, breast cancer screenings (other than mammograms), continuous glucose monitors, and specific insulin products before meeting annual deductibles. These items are classified as preventive care and align with eligibility criteria for HSAs.

3. Action Steps for Employers: Employers offering HSAs, HRAs, or FSAs should update plan materials to reflect the new guidance, ensure their third-party administrators (TPAs) are informed, and clarify the impact of pre-deductible preventive coverage on HSA eligibility. Employers choosing to cover male condoms should adjust plan documents and summaries accordingly.

Weight-loss drugs bloated employers' bills in 2023: Segal analysts

By Allison Bell - Simply covering anti-obesity medications in 2023 led to a shocking increase in the rate of growth in employer-sponsored prescription plan spending, according to new data from the Segal Group. Read Full Article…

HVBA Article Summary

1. Divergent Spending Trends in Employer Plans: Employer health plans without coverage for anti-obesity medications saw an average 2023 spending increase of 8.4%. However, plans covering popular but costly GLP-1 agonists, such as Wegovy and Saxenda, experienced a significantly higher spending trend of 13%, driven by their rising popularity and expense.

2. Cost Impact of GLP-1 Agonists on Plan Participants: In the fourth quarter of 2023, plans covering GLP-1 agonists for obesity management incurred an average additional cost of $6.47 per member per month, a sharp rise from $1.49 per member in the same period of 2022. The high costs are tied to drugs like Wegovy ($1,375/month) and Ozempic ($778/month), marketed by Novo Nordisk for weight and diabetes control, respectively.

3. Future Outlook on GLP-1 Spending: The financial impact of GLP-1 agonists on employer health plans may shrink over time due to patent expirations, such as semaglutide's in 2023, potentially leading to lower costs. Despite potential savings from reduced bariatric surgery spending, short-term costs remain steep, with Congressional Budget Office projections suggesting only modest savings of $650 per user annually through 2034, covering just 15% of the drug costs.

America's health insurance market: A rigged game?

By Alan Goforth - Consumers in a large majority of metropolitan areas across the United States have limited options for health insurance coverage, a new market analysis from the American Medical Association found. Read Full Article… ^{_{(Subscription required)}}

HVBA Article Summary

1. Persistent High Market Concentration: The share of highly concentrated commercial health insurance markets has remained steady at around 95% over the past decade, with nearly half of these markets becoming even more concentrated between 2014 and 2023. This lack of competition limits consumer choice and reinforces the dominance of a few large insurers.

2. Dominance of Key Players: The study revealed that in 89% of metropolitan statistical areas (MSAs), at least one insurer held a market share of 30% or greater, with a single insurer dominating over 50% of the market in nearly half of these areas. Blue Cross Blue Shield companies were the most dominant at both state and MSA levels, while UnitedHealth Group led nationally for commercial health insurance.

3. Call for Regulatory Action: The American Medical Association (AMA) emphasizes the need for stronger regulatory oversight to reverse the trend of health insurance consolidation, advocating for a more competitive marketplace to improve consumer choice and patient outcomes. Policymakers and regulators are urged to scrutinize mergers and acquisitions that exacerbate market concentration and harm competition.

Pharmacies sue GoodRx, accusing the company of conspiring with PBMs

By Maia Anderson - It’s not all good news for GoodRx. The drug discount company is facing at least three separate class-action lawsuits from independent pharmacies accusing it of “conspiring” with pharmacy benefit managers (PBMs) to fix reimbursement rates in a way that boosts the PBMs’ profits. Read Full Article…

HVBA Article Summary

1. Class-Action Lawsuits Target PBMs and GoodRx’s Integrated Savings Program: Independent pharmacies allege that GoodRx's "integrated savings program," launched in 2023, collaborates with PBMs like Caremark, Express Scripts, Medimpact Healthcare Systems, and Navitus Health Solutions to lower pharmacy reimbursement rates using proprietary pricing data. This arrangement, according to the lawsuits, effectively reduces the revenue pharmacies receive for dispensing generic drugs, which constitute 90% of prescriptions in the U.S.

2. Alleged Antitrust Violations and Impact on Independent Pharmacies: The lawsuits argue that the program enables PBMs to engage in price-fixing by coordinating reimbursement rates and imposing transaction fees, further squeezing pharmacy revenues. They claim these practices violate the Sherman Antitrust Act, disproportionately favor chain pharmacies affiliated with PBMs, and threaten the financial survival of independent pharmacies, already a vulnerable segment of the healthcare system.

3. Broader Industry Implications and Responses from Defendants: While the lawsuits highlight systemic challenges faced by independent pharmacies, defendants, including Express Scripts and Caremark, deny the allegations, asserting that the program aims to lower drug costs for consumers. This legal battle comes amid increasing scrutiny of PBMs by regulators like the FTC, reflecting broader concerns over transparency and competition in the pharmacy benefits landscape.

Providers, payers focused on initial 'quick wins' for AI with plans to grow investment: survey

By Heather Landi - More than half of health system and health plan executives say AI is an immediate priority, and 73% are increasing their investments in the technology, a new C-suite survey finds. Read Full Article… 

HVBA Article Summary

1. Strategic Adoption and Governance: Healthcare organizations are advancing beyond pilot AI projects toward enterprise-scale implementation, with 73% having established AI governance structures. These governance bodies prioritize identifying use cases (91%), ethics and safety (87%), and data policies (84%) to ensure AI aligns with organizational values and drives impactful outcomes.

2. Focus on Pragmatic "Quick Wins": Providers and payers prioritize AI applications that deliver immediate operational efficiencies, such as ambient scribing (83%) and administrative AI for financial management (59%). These early successes aim to build organizational credibility and lay the groundwork for more transformative, long-term AI initiatives.

3. Challenges and Integration Decisions: Healthcare leaders face hurdles like defining ROI (64%), technical bandwidth limitations (40%), and integration complexities (38%). Most organizations rely on external partners for AI solutions (72%) but invest internally in data infrastructure, balancing "build vs. buy" decisions to address evolving technology needs and seamless EHR integration.