Note: Health Policy will not be publishing next week. We will see you back here on January 1. Until then have a happy and healthy holiday.
Top of the Funnel: Macro + Earnings
PCE. Personal Consumption Expenditures decelerated for health care overall but accelerated slightly for prescription drugs from 6.9% to 7.0%. Other categories were down slightly.
CONGRESS.
Congressional Budget Office on the IRA. The CBO announced in a blog post they were interested in any research, information and data that might inform their analysis on the impact of the Inflation Reduction Act.
The IRA represents the pharmaceutical industry’s biggest legislative defeat after 50 years of fending off similar attacks using the threat to innovation as a shield. The CBO’s interest is not an especially good sign for the industry. Innovation was in decline well before the IRA passed but drug manufacturers would like to stick the IRA with the blame. The CBO’s work may complicate that.
WHITE HOUSE.
Medicaid Disenrollment. UNH (+), ELV (+), CNC (+), MOH (+) The White House chastised states for disenrolling children from Medicaid. They singled out non-expansion states in particular – which has nothing to do with children but whatevs.
More on that in Thursday’s note here.
ACA Enrollment. UNH (+), ELV (+), CNC (+) The White House cheered recent enrollment report for the Affordable Care Act exchange plans. Based on the most recent data, just shy of 20M people have chosen a plan.
When combined with the slow pace of Medicaid disenrollment, the uninsured rate in the US will continue to be below 10%, a benchmark set by President Barack Obama when the ACA was implemented.
OTHER STUFF.
Humana v Human. HUM (-), CI (-) A class action suit was filed against Human claiming the company uses Artificial Intelligence for its prior authorization process instead of, wait for it, “real doctors.”
You can read it here but the plaintiffs are going to have to establish that is mattered and it is not yet clear it did. A similar lawsuit has been filed against CI.
On the Other Hand. A class action suit has also been filed against OptumRx over the assessment of DIR fees. Osterhaus Pharmacy in Iowa has also filed a similar claim against CVS.
DIR fees, which are often assessed on transactions months later, have vexed both independent pharmacies and policy makers. For policy makers the issue has been the market power the PBMs exert, leaving little room for negotiation.
State Census Estimates. THC (+), HCA (+) The Census Bureau released its July 2023 population estimates. California has lost about 1.5% of its population since April 2020. New York has lost 3.1%. The story in the high population, urbanized states like Illinois is the similar. This trend bears mention because these high population states have been home base for the large non-profit health sector for years, coddled by a highly regulated environment. Bad news for Capex but the benefits will accrue over time to the for profit providers located in what are now high growth states because of that very different regulatory environment.
Have a great weekend.
Emily Evans
Managing Director – Health Policy
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