California lawmaker sends PBM bill to governor

By Allison Bell - State lawmakers have sent California Gov. Gavin Newsom a 29-page bill that would rewrite the rules governing how pharmacy benefit managers in his state operate. Read Full Article… ^{_{(Subscription required)}}

HVBA Article Summary

1. New PBM Regulation Bill: California State Sen. Scott Wiener has introduced a bill that would classify Pharmacy Benefit Managers (PBMs) as insurance businesses, requiring them to obtain licenses from the California Department of Insurance and submit to state insurance oversight. The bill also mandates that PBMs disclose compensation arrangements with health insurers and report data for an annual impact report detailing the costliest, most frequently prescribed, and highest revenue-producing drugs.

2. Support and Opposition: The bill has garnered support from various pharmacy and patient advocacy groups, including the National Association of Chain Drug Stores and the American Diabetes Association. However, it faces opposition from industry groups such as the American Benefits Council, which argues that the bill could lead to higher health insurance premiums due to the loss of rebates and discounts, and potentially violate federal ERISA regulations by preempting state efforts to regulate self-insured health plans.

3. Context and Related Legislation: The bill is part of a broader trend of states regulating PBMs amid concerns over prescription drug costs and conflicts of interest. In addition, Governor Newsom has received other related bills, including one that would allow the attorney general to reject private equity firm takeovers of healthcare providers and another requiring annual behavioral health screening notices for children.

Alabama teachers’ health insurance plan to request $130 million more from Legislature after federal changes

By Mike Cason - Changes by the federal government affecting Medicare Advantage plans are driving up Alabama’s cost for health insurance for teachers and education employees. Read Full Article…

HVBA Article Summary

1. Funding Increase Proposal: The PEEHIP Board has proposed a $130 million increase in funding for fiscal year 2026, bringing the total request to $1.13 billion. This 13% increase will be reviewed by the Legislature during its session starting in February.

2. Withdrawal from Trust Fund: To help cover rising costs, PEEHIP plans to withdraw up to $119 million from the Alabama Retired Education Employees Health Care Trust, which currently holds about $2.3 billion. This move is within legal limits, allowing withdrawals of up to 10% of the trust's balance.

3. Impact of Rising Costs: Increased costs for PEEHIP's Medicare Advantage plan, driven by federal funding cuts and higher drug costs, have necessitated the funding request. While most members will not face premium increases, about 2,000 surviving spouses over 65 will see their premiums rise significantly due to state law requirements.

HCA and UnitedHealth reach agreement before coverage interruption in 4 states

By Lynn Cavanaugh - Shortly before their contracts were scheduled to expire on September 1, HCA Healthcare, the nation's largest hospital chain, and UnitedHealthcare reached multi-year agreements, capping a months-long dispute that threatened health care access at 38 hospitals and affiliated providers across four states. Read Full Article… ^{_{(Subscription required)}}

HVBA Article Summary

1. Contract Agreement: UnitedHealthcare and HCA Healthcare reached a multi-year contract on September 1, 2024, ensuring uninterrupted network access for UnitedHealthcare members across various plans, including employer-sponsored commercial plans, Medicare Advantage, and Individual Family Plans (IFP) through December 31, 2024.

2. Potential Network Disruption: Without the deal, HCA's 38 hospitals and affiliated facilities across Texas, Colorado, South Carolina, and New Hampshire would have become out-of-network for UnitedHealthcare members, potentially disrupting access to care for many patients.

3. Ongoing Legal Issues: HCA Healthcare is currently facing a proposed class action lawsuit in North Carolina, accusing it of anticompetitive practices in the acute care and outpatient care markets. HCA disputes these allegations, labeling them as baseless and detrimental to business due to increased litigation costs.

Payers move to ditch deductibles

By Jakob Emerson - The trend of health insurers launching products without traditional deductibles is accelerating, reflecting a broader shift toward consumer-centric healthcare. Read Full Article…

HVBA Article Summary

1. Improved Health Outcomes with Deductible-Free Plans: Research shows that eliminating deductibles can significantly enhance health outcomes, particularly for individuals with chronic conditions. A recent study in JAMA Open Network highlighted that adults with diabetes faced more severe complications under high-deductible health plans compared to those with standard plans, underscoring the benefits of deductible-free options.

2. Growing Employer Adoption of Low-Deductible Plans: Driven by concerns over employee healthcare costs, approximately 40% of employers now offer low or no-deductible health plans, with 15% providing coverage without premiums. UnitedHealthcare's Surest plan and Health Care Service Corp.'s new alternative health plan exemplify this shift towards deductible-free offerings, reflecting a broader trend in the industry.

3. State-Level Initiatives to Reduce Costs: In California, the ACA marketplace is eliminating deductibles for certain silver plans and lowering copays starting in 2024. This state-funded initiative aims to enhance affordability for nearly 40% of enrollees, supported further by federal premium assistance through the Inflation Reduction Act, marking a significant step in improving access to healthcare.

Employers Don't Want to Pay for Life-Saving Cures for Rare Diseases

By Gerry Smith - As a wave of gene therapies with multimillion-dollar price tags hit the market, many employers are dropping coverage and leaving families in a bind. Read Full Article… ^{_{(Subscription required)}}

HVBA Article Summary

1. High Cost and Coverage Challenges: Gene therapies, such as Zolgensma for spinal muscular atrophy (SMA), can cost millions of dollars per treatment, leading many self-insured employers to exclude them from their health plans. This creates a significant financial burden on families facing rare and potentially fatal conditions.

2. Impact on Families and Public Relations: The high cost of gene therapies often forces families to seek financial help through fundraising or public pressure. For example, Amanda Reed’s twins required Zolgensma, but their employer’s refusal to cover the treatment led to a public outcry and significant media attention, affecting the employer’s reputation.

3. Insurance and Market Responses: The insurance landscape for gene therapies is evolving. While state and federal laws prevent denial of coverage for pre-existing conditions, self-insured employers have flexibility in coverage decisions. Some insurers are exploring subscription models to manage costs, but the overall approach remains inconsistent, leaving many patients in precarious situations.

Scrutiny intensifies for PBMs as CEOs face threats

By Lucy Peterson - The CEOs of three major Pharmacy Benefits Managers (PMBs) including CVS Caremark, Express Scripts and OptumRx may be facing fines or imprisonment of up to five years, according to a House Committee on Oversight and Accountability press release that was shared last week. Read Full Article… ^{_{(Subscription required)}}

HVBA Article Summary

1. Executives Accused of Misleading Statements: James Comer, chairman of the House Committee on Oversight and Accountability, has called on top executives from CVS Caremark, Express Scripts, and OptumRx to correct their statements made during a recent hearing. The executives allegedly made misleading claims about not steering patients to PBM-owned pharmacies and provided statements that contradict the committee's findings on contract negotiations and payments to pharmacies.

2. Increased Scrutiny on PBMs: The call for corrections comes amidst heightened scrutiny of Pharmacy Benefit Managers (PBMs) in Washington D.C. The FTC has accused PBMs of favoring their own pharmacies and exerting excessive market control, which impacts medication access and affordability. This scrutiny reflects ongoing concerns about the influence of PBMs on the prescription drug market.

3. Request for Corrections by Sept. 11th: The committee has set a deadline of September 11th for David Joyner of CVS Caremark, Adam Kautzner of Express Scripts, and Patrick Conway of OptumRx to correct their statements. Despite their claims of providing cost savings and not steering patients to PBM-owned pharmacies, their statements have been challenged by the committee's and FTC's findings, highlighting the contentious nature of PBM practices and market control.

Out-of-pocket spending on prescriptions grew even after accounting for rebates: study

By Paige Minemyer - There's no shortage of attention on rising pharmaceutical costs, but policymakers need to have the full picture of trends in this space to work off of, according to a new study. Read Full Article…

HVBA Article Summary

1. Price Trends and Rebates: From 2007 to 2020, retail pharmacy prices increased annually by 9.1%, while negotiated prices grew by a more modest 4.3% per year. This discrepancy highlights the impact of pharmacy benefit manager-negotiated rebates on drug pricing trends.

2. Consumer Out-of-Pocket Costs: Despite the slower growth in negotiated prices, patient out-of-pocket spending rose starting in 2016. This increase is attributed to higher deductibles and co-insurance, which are often based on list prices, thereby affecting consumers' financial burden.

3. Impact on Low-Income Individuals: The study indicates that low-income individuals who select high-deductible plans may face significant financial strain due to rising out-of-pocket costs, particularly for specialty medications. This suggests a need for improved transparency and policy adjustments to better support vulnerable populations.

GLP-1s could become Medicare’s most expensive drugs

By Maria Anderson - GLP-1 drugs could put a major strain on Medicare Part D’s budget in the future, according to a study published on August 27 in the medical journal Annals of Internal Medicine. Read Full Article…

HVBA Article Summary

1. Medicare Coverage Expansion: In March 2024, Medicare announced that Part D plans could cover Wegovy, a semaglutide-based GLP-1, for patients with elevated BMI and “established cardiovascular disease,” following recent clinical trials demonstrating cardiovascular benefits of the drug. However, the exact definition of “established cardiovascular disease” is still unclear, impacting how many beneficiaries might qualify for this coverage.

2. Potential Cost Implications: Depending on the definition of established cardiovascular disease, the cost of covering Wegovy could significantly impact Part D spending. Conservative estimates suggest an additional $34 billion annually, while more liberal definitions could push costs up to $145 billion per year, compared to the current highest spending on Part D for Eliquis, which was $18 million in 2023.

3. Rising Healthcare Costs for Employers: As GLP-1 drugs, including Wegovy, become more popular, employers are facing concerns about rising healthcare costs. A recent survey indicated that employers anticipate an 8% increase in healthcare costs by 2025, largely driven by the higher expenses associated with GLP-1 coverage, with 96% of employers worried about the long-term financial impact.