CONGRESS.
But, Of Course. (PFE (-), MRNA (-)) Sen. Bernie Sanders, Chairman of the Senate HELP Committee has urged MRNA not to raise the price on its Covid vaccines. Sen. Elizabeth Warren made a similar plea to PFE a number of weeks ago.
They probably need not bother. Insurers are going to make the decision since the US funding and contracts burn off in the new year. Given the price transparency and current price points for vaccines, $110-130 seems like a stretch regardless.
MedPAC. (HCA (+), THC (+), AMED (-), CHE (-)) It appears Congress’ advisors recognize the reimbursement headwinds for hospitals and they voted to recommend a 1% increase above the statutory amount for 2024. Physicians were treated less favorably. MedPAC recommended the statutorily determined rate be bumped by 50% of the projected Medical Expenditure Index.
For the PAC providers, the news is bad. MedPAC is recommending cuts including 7% reduction for home health.
The House is probably quite inclined to impose the cuts MedPAC recommends. It is probably not likely to agree to any increases. The Senate will not like any of that so expect nothing from Congress.
That means health care is going to have to get busy getting efficient. If they cannot do so, add consolidation to you list of 2023 themes.
THE WHITE HOUSE.
Vaccination Rates. The CDC reported vaccination of kindergarteners dropped from 95% to 94% in the 2021-22 school year. It is fair to say, absent a change in attitude from public health officials, 2022-23 will be worse.
The CDC’s obsession with Covid vaccination for low-risk populations has very likely led parents to question the need for all vaccines. It seems unlikely that parents would abandon all vaccinations - measles can blind and kill young children – but reversing the trend for marginally useful shots like that for chicken pox is going to take years of rebuilding trust.
The larger theme is whether Pharma’s interest in developing vaccines will find the market it expects. Hard to know but it is clear, follow the leader is working less well.
ACA signups. ((UNH (+), MOH (+), CNC (+)) Enrollment in ACA plans continues in overdrive. Through Jan 7th, almost 16M people had signed up, a 13% increase over last year. About 3M signups were new customers. The annual open enrollment period ends on Jan. 15th.
Other Stuff.
Insulin. (UNH (-), CI (-), CVS (-)) Just as the market distortions for insulin get worse with a $35 price cap implemented under the Inflation Reduction Act, the State of California has filed suit against LLY, NVO, CVS, CI and UNH for unfair business practices.
Well, duh. Where the hell have you guys been? Insulin before you take into account discounts, rebates, volume incentives and other rent-seeking is probably about $0.60/dose.
What makes the lawsuit interesting is two parties that detest each other – pharmaceutical companies and pharmacy benefit managers – are going to have to navigate discovery, litigation and settlement, if there is one. Get the popcorn.
Oopsie. California announced a $22B – with a B – budget deficit. Entirely predictable, given out-migration and the state’s dependency on a rising stock market, especially for tech names.
The Governor raised the ire of health policy folks by sending $334M of the Health Care Affordability Reserve Fund to the general fund. The fund is used to subsidize health insurance premiums for those that cannot afford it.
Negotiations with the state legislature are just beginning. Get the popcorn for this one also. California has been ground-zero for easy money policies that may just have led lawmakers think “the road goes on forever and the party never ends.”
Recent Events
Venture View with Marcus Whitney: Pitchbook’s 4Q Report, Angel and Seed V. Late Stage + Monogram Health Replay here.
Upcoming Evans
1Q 2023 Health Policy Macro Themes (Add to Outlook Calendar)
Have a great long weekend.
Emily Evans
Managing Director – Health Policy
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