Top of the Funnel: Macro + Cigna
CIGNA.. (+) On Wednesday, I am going to take up CI as the next phase of our examination of the MCOs. CI has little exposure to Medicaid disenrollment and its Medicare business is small. CI is mostly dependent on the pharmaceutical industry’s inflation and enrollment in commercial plans. PBM legislation is not the threat much of the street thinks it is. Join us at 10am. Add to outlook calendar.
PMI. Hospital PMI dropped to 49.1 in May, but case mix was up 5%. This picture is consistent with the varying levels of hospital performance, distinguished by geography and tax status.
CONGRESS.
House Ways and Means. The Committee reported out a bill that would codified the Trump administration’s HRA rule that permitted employers to reimburse or subsidize their worker’s purchase of individual health insurance.
The Committee also passed a bill making permanent a provision that allowed employers to provide pre-deductible coverage of telehealth services in high deductible health plans.
All good work but little interest so far on the Senate side.
THE WHITE HOUSE.
New Primary Care Model. CME announced a multi-year, multi-track primary care model designed to attract providers not already enrolled in an MCO. Known as the Making Primary Care (MOC), the model will provide additional funding for infrastructure – which sounds a little like PRVA’s model – as well as advance payments and performance bonuses.
Not everyone is pleased. The trade group for Accountable Care organizations has raised objections related to the way a new model would intersect with existing ACO program like REACH.
Details here.
Drug Shortages. Faced with chronic shortages of platinum-based chemotherapy drugs, the Food and Drug administration authorized the import of drugs from China even without FDA approval.
Meanwhile, Bloomberg reported that the Department of Defense is calling into question the quality of generic drugs and seeking solutions which may include in-house quality testing. It isn't a new problem but the level of frustration has risen as the FDA and HHS have largely ignored the problem for years.
Other Stuff.
Drug Negotiation Court Challenge. MRK filed a very expected lawsuit against HHS over the drug negotiation provisions of the Inflation Reduction Act. That section of the law requires a manufacturer to reach a maximum fair price with the government or be assessed a 95% excise tax.
Congress took a similar approach with expansion Medicaid under the Affordable Care Act. States were told to expand eligibility and if they failed to do so would lose the entirety of their federal matching funds.
The Myth of Decentralized Trials. Companies like Evidation as well as a few incumbents have offered decentralized trials as a solution for improving the diversity in study populations.
Decentralized trials have fans in the pharmaceutical industry and the Health Care IT sector. Among the benefits are a low cost way to conduct trials. However, at a Politico event this week, the challenges of relying on decentralized trials and the FDA’s guidance to make it possible remain fraught with challenges, including, controlling for variables and adherence to protocols.
Have a great weekend.
Emily Evans
Managing Director – Health Policy
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