Talking Points: 12 February 2024

A quick roundup of the issues driving the healthcare reform conversation.

Week in Review

MEDICARE ADVANTAGE Proposed changes to Medicare Advantage threaten affordability and benefits for millions of American seniors.

Quick takeaway: Yearly funding cuts and administrative changes to the Medicare Advantage (MA) program continue to weaken the blanket of care that more than half of all Medicare eligible beneficiaries now depend on.

Digging deeper: Late last month, the Centers for Medicare & Medicaid Services (CMS) released its annual proposed changes to how MA is funded and administered, which would effectively result in funding cuts to the program.

But, that’s only part of the story. Stakeholders are quick to point out that those cuts come on top of years of other cuts and administrative changes, the cumulative effect of which has eroded the benefits being offered by MA plans, while driving up costs.

What it means: More than 32 million seniors are now enrolled in MA plans, and that number is only expected to keep growing. With its focus on care coordination and enhanced benefits, it’s not surprising that the overwhelming majority of MA beneficiaries are satisfied with their plans. Which is also why the majority of senior voters say they would be more likely to vote for their Member of Congress if they protected funding for the program.

Rx PRICES Big Pharma exploits patent laws to protect their profits.

Quick takeaway: Anticompetitive tactics, like patent thickets, allow drugmakers to prevent more affordable alternatives from coming to market.

Digging deeper: By making minimal tweaks to existing products, pharmaceutical manufacturers are able to wrongly extend the term of a drug’s patent protections. Patent thickets are what happens when multiple patents are filed to cover these little changes to products – often with little to no value.

A study late last year discovered that the use of these patent thickets on just four drugs extended the monopolies enjoyed by their manufacturers by a combined 25 years.

Now, a new study shines light on how manufacturers of blockbuster GLP-1 weight loss drugs are exploiting patent thickets to protect the monopolies on their products.

What it means: With so much attention being paid to what’s behind rising prescription drug spending, we don’t need to look far to find out who’s really responsible.

HOSPITAL Rx PRICES Hospitals significantly markup the prices of critical drugs.

Quick takeaway: Major price hikes on cancer and other specialty drugs by hospitals drive up healthcare costs.

Digging deeper: A new study found that hospitals charge as much as 300 percent higher for infusion drugs than what they pay for them. By comparison, hospitals are limited to charging Medicare just 6 percent above the acquisition price for these drugs.

Physician- or hospital-infused drugs account for about one-third of total drug spending, with these markups undoubtedly playing a significant role.

What it means: The substantial revenues hospitals earn from administering infused drugs has only served to incentivize hospital consolidation, as these health systems look to merge with each other or acquire physician offices to increase drug volumes and raise prices.

Other negative downstream impacts include limitations to patient access to these marked up drugs or increased cost-sharing, as well as drugmakers raising the prices of these drugs to tap into the revenue stream being monetized by hospitals.


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