Health Policy Report – September 25, 2024

Nexus Health Holds Ribbon-Cutting

On September 19, Nexus Health held a ribbon-cutting ceremony for its new, 95,000 square-foot facility. The event featured speeches from Santa Fe Mayor Alan Webber, and Dr. Scott Herbert, oncologist at Nexus Health, as well as a keynote address from Lieutenant Governor Howie Morales. Additionally, the event was attended by six local state elected officials, who came out to show their support for Nexus and their mission.

During his speech, Lt. Governor Morales highlighted the key role Nexus will play in the overall health care ecosystem in Northern New Mexico, including access to timely, affordable care and recruitment of more physicians to the area.

In this new, state-of-the-art facility, Nexus will provide medical oncology, orthopedic surgery, interventional pain medicine, breast surgery, dermatology, ENT, radiation, and imaging all under one roof.

At the beginning of 2023, a group of physicians, who were previously hospital-employed, founded Nexus Health to create an independent, diverse medical group focused on delivering comprehensive multispecialty care. “Here’s the rationale: Opening a community care model allows physicians the ability to exercise their independence beyond the hospital setting. Nationwide, community care consistently and conveniently offers patients cost-effective and high-value health care solutions,” Dr. Herbert wrote in an op-ed last year. 

To read more, CLICK HERE.

To read Dr. Herbert’s op-ed, CLICK HERE.

Senator Bill Cassidy (R-LA) Requests Information from Drug Manufacturers on 340B
As part of an ongoing investigation into the 340B drug pricing program, Senator Bill Cassidy, M.D. (R-LA), Ranking Member of the Senate Health, Education, Labor, and Pensions (HELP) Committee has requested information from Eli Lilly and Amgen.

Cassidy launched an investigation into the 340B program last year when he sent letters to Cleveland Clinic and Richmond Community Hospital requesting information on how they use savings from the drug discount program. Now, Cassidy is focusing on drug manufacturers that have imposed restrictions on the use of contract pharmacies to dispense discounted drugs under the 340B program.

“Beginning in 2020, several drug manufacturers announced restrictions on covered entities dispensing 340B drugs to patients through multiple contract pharmacies, stating the restrictions would cut down on unlawful duplicate discounts and diversion of 340B drugs to ineligible patients,” the press release read. “Given that Eli Lilly and Amgen are among the manufacturers imposing restrictions on covered entities, Cassidy is requesting information to better understand the companies’ justifications for the restrictions and how the restrictions affect distribution of 340B drugs.”

Cassidy has previously stated that 340B is within the HELP Committee’s jurisdiction and that he is seeking to restore the program to its original intent to assist hospitals serving a large number of low-income patients. It remains to be seen whether this Congress will pass any major reform to the 340B program.

To read the press release, CLICK HERE.

To read the letters to Eli Lilly and Amgen, CLICK HERE and HERE.

AMA Report Details Low Competition in PBM Market

On September 9, the American Medical Association (AMA) released its annual report on competition among pharmacy benefit managers and vertical integration trends in an increasingly scrutinized sector.

The analysis found that the PBM market is becoming increasingly concentrated. Collectively, the four largest PBMs in the United States (CVS Health, OptumRx, Express Scripts, and Prime Therapeutics) make up a whopping 70% of the market. At the regional level, 82% of PBM markets are highly concentrated according to federal anti-trust guidelines, suggesting a serious lack of competition that could threaten patients and consumers. As PBMs become increasingly integrated with major health insurers, this problem will only grow worse. Nationally, insurance companies that are vertically integrated with a PBM covered three-quarters (72%) of people with a commercial or Medicare Part D prescription drug plan.

“The call for increased regulatory oversight of PBM business practices is overwhelmingly welcomed by physicians as a check against possible anticompetitive harm resulting from low competition and high vertical integration in the PBM industry,” said AMA President Bruce A. Scott, MD, in a statement. “The findings from the new AMA analysis warrant attention as Congress and the administration continue their work to protect patients and ensure prescription drugs remain affordable and accessible. The AMA urges careful monitoring, and intervention when needed, of both horizontal and vertical integration to ensure competition in PBM and health insurance markets.”

To read the report, CLICK HERE.

To read AMA’s statement on the report, CLICK HERE.

New Report Reveals Extent of Physician Shortage Across the Nation

New research on physician employment estimates a significant physician shortage of 64,000 providers by the end of the year, and nearly 86,000 by 2036. The report, conducted by McKinsey & Company, surveyed 631 physicians across various specialties from June to July 2023 to understand trends and challenges in physician employment.  

The report reveals continued burnout following the COVID-19 pandemic and an aging physician workforce, as nearly 20% of physicians are aged 65 or older and expected to retire soon. The report shows that 35% of physicians are expected to leave their current roles over the next five years, with about 60% of them likely to exit clinical practice entirely.

Meanwhile, patient demand is expected to grow by 6% by 2050. Physicians note that top factors for leaving their current role include a need for higher compensation and incentive structures, greater family needs, and the emotional and physical toll of work, including a lack of control over schedules, lack of flexibility, long hours, and burnout.

To address this growing workforce gap, physicians point to the need to increase compensation and decrease administrative burden.

To read McKinsey & Co.’s report on the physician workforce, CLICK HERE.

Rep. Peter Welch (D-VT) Introduces 340B PATIENTS Act

On September 11, Senator Peter Welch (D-VT)  introduced the 340B Pharmaceutical Access To Invest in Essential, Needed Treatments & Support (PATIENTS) Act, which, if passed, would protect the 340B drug pricing program and ensure patients can continue care with providers who utilize the program. 

Specifically, the bill would require pharmaceutical companies to provide 340B discount prices to covered entities regardless of how or where the drugs are dispensed, including through contract pharmacies. The PATIENTS Act would also ensure that drug manufacturers cannot impose restrictions on covered entities regarding their purchase and use of 340B drugs, regardless of the dispensing method or location, and it would create civil monetary penalties for manufacturers that fail to comply with these requirements. A companion bill was introduced by Rep. Doris Matsui (D-CA) in the House of Representatives earlier this year.

“Across the country, rural health systems are facing affordability and sustainability issues. Programs like 340B, which allow health care providers to purchase prescription drugs at discounted prices, help ensure rural communities can access important medical and social services. But right now, the 340B program is under attack from Big Pharma, endangering care for patients who rely on small rural health care providers for their health care needs. We’ve seen it here in Vermont and across the country,” said Senator Welch in a press release. “Our bill safeguards providers’ access to this crucial funding stream that provides a lifeline for rural health systems and protects access to discounted prescription drugs for patients.” 

To read Senator Welch’s press release about the bill, CLICK HERE.

House Energy & Commerce Committee Advances PBM Delinking Provisions

In a wide-ranging markup on September 18, the House Committee on Energy and Commerce advanced the Telehealth Modernization Act of 2024, which extends for two years critical health provisions that were implemented during the COVID-19 pandemic and set to expire at the end of the year.

Importantly, the bill includes provisions to rein in pharmacy benefit managers (PBMs), a reform effort that has been gaining steam as the end of the year approaches. The provisions included in the bill would require PBMs to be more transparent in their contractual arrangements and delink compensation from the cost of drugs. 

“This will also help to make sure that we have compensation at a flat, fair market rate that is not tied to drug prices,” said Rep. Lisa Blunt Rochester, (D-DE).

Congress will need to pass this legislation to ensure COVID-19 pandemic flexibilities are extended.

To watch the markup, CLICK HERE.

To read more, CLICK HERE.