Could weight-loss drugs bloat Medicare?

Presented by PhRMA: Delivered daily by 10 a.m., Pulse examines the latest news in health care politics and policy.

Jun 28, 2023 View in browser   By Ben Leonard and Daniel Payne Presented by With Robert King  Driving The Day New weight-loss drugs may be effective, but Medicare has not committed to covering them. | Patrick Sison/AP Photo WEIGHT-LOSS DRUG DILEMMA — A swell of research supports weight-loss drugs’ effectiveness, but whether Medicare will cover them remains in question. Eli Lilly has released new results on an experimental drug that led to a 24-percent weight loss among adults. Another of its drugs led to a 22-percent weight loss. That comes on the heels of Novo Nordisk’s drugs Ozempic and Wegovy showing promising results. The drugs target one of the biggest issues facing U.S. health care: obesity. More than 2 in 5 Americans have obesity, according to the latest CDC data, a number that’s soared in the past two decades. The drugs will have substantial demand. But without coverage, they can cost patients around $16,000 annually. The cost to Medicare could reach nearly $27 billion a year if just 10 percent of beneficiaries use them, according to a recent analysis in The New England Journal of Medicine. That comes as lawmakers seek to avert Medicare insolvency. In 2003, Congress barred Medicare from covering drugs for obesity. Some legislators hope to change that.  Sens. Tom Carper (D-Del.) and Bill Cassidy (R-La.) have previously introduced legislation to allow coverage. Barbara Boland, communications director for Rep. Brad Wenstrup (R-Ohio), who has led the House companion, told Pulse it’s a “top priority” and they’re targeting a summer reintroduction. It could face opposition, though — Rep. Greg Murphy (R-N.C.) came out against it at POLITICO’s Health Care Summit this month. Novo Nordisk recently hired law and lobbying firm Arnold & Porter to allow Medicare to cover the treatments. There could be a lot more lobbying in store. “The lobbying effort could dwarf the recent campaign to get Medicare to cover new drugs to manage Alzheimer’s disease,” Tricia Neuman, executive director for KFF’s Medicare policy program, told Pulse. The Biden administration could also use demonstration authority to get coverage, Neuman said. FDA Commissioner Robert Califf said his agency is working with CMS on “what to do” about the drugs. A key question is whether the drugs will save money by averting other costly conditions that obesity worsens.  “There are still many unknowns about the long-term risks and benefits,” said Khrysta Baig, lead author of the NEJM analysis, adding that manufacturers could make the cost issue less significant by lowering prices. Researchers at University of Southern California estimated Medicare could save up to $245 billion over 10 years by covering the treatments, but when using current prices, that could cost $4.5 trillion, Baig said. Medicare’s new drug-price negotiation authorities could eventually mitigate that, though, and Alison Sexton Ward, a USC researcher, noted that list prices aren’t reflected in post-rebate prices.   WELCOME TO WEDNESDAY PULSE. Anything on the horizon at HHS you’re watching for? We want to hear from you. Reach me at bleonard@politico.com or Daniel at dpayne@politico.com. TODAY ON OUR PULSE CHECK PODCAST, host Megan Messerly talks with Carmen Paun, who describes how the abortion debate in Congress threatens to jeopardize the reauthorization of the AIDS relief program PEPFAR. Listen to today’s Pulse Check podcast   A message from PhRMA: Pharmacy benefit managers (PBMs) decide if medicines get covered and what you pay, regardless of what your doctor prescribes. They say they want lower prices, yet they often deny or limit coverage of lower-cost generics and biosimilars, instead covering medicines with higher prices so they make more money. What else are they hiding?   Eye on the FDA The FDA division that plays a major role in food-safety field inspections could be headed toward a restructuring. | Getty Images FDA REFORMS — The Food and Drug Administration is proposing more changes to its troubled foods division after an independent report detailed serious failures within the agency following the recent baby-formula crisis, POLITICO’s Meredith Lee Hill reports. FDA Commissioner Robert Califf announced a new proposal Tuesday that would restructure the agency’s Office of Regulatory Affairs. The regulatory office plays a major role in food-safety field inspections but has largely been siloed from the foods division in recent years, a factor that contributed to the FDA’s delayed response to the major baby-formula plant contamination and recall that sparked a national crisis in 2022. Califf said ORA’s “core mission” should be “conducting investigations, inspections and imports for all FDA-regulated products.” He also proposed other reforms, including realigning the eight human and animal food laboratories managed by ORA into the Human Foods Program, which food-safety experts say is a step that could help the agency better respond to food-safety crises.   A message from PhRMA:   Medicaid EYE ON MEDICAID UNWINDING — At least 1.5 million Medicaid enrollees have lost their coverage as of June 27, according to new KFF analysis. About three-quarters of the disenrollments have been for procedural reasons like paperwork issues, according to the research, and children have made up about a third of disenrollments. Disenrollment rates are significantly different among states that have reported data. South Carolina has the highest rate at 81 percent of disenrollments out of all completed renewals, and Virginia has the lowest at 16 percent. In South Carolina, 95 percent of disenrollments were for procedural reasons. “Differences in who states are targeting with early renewals as well as differences in renewal policies and systems capacity likely explain some of the variation,” KFF wrote.   SUBSCRIBE TO POWER SWITCH: The energy landscape is profoundly transforming. Power Switch is a daily newsletter that unlocks the most important stories driving the energy sector and the political forces shaping critical decisions about your energy future, from production to storage, distribution to consumption. Don’t miss out on Power Switch, your guide to the politics of energy transformation in America and around the world. SUBSCRIBE TODAY.     HEALTH TECH HEALTH RECORDS FIRMS FACE FINES — A final rule from the Department of Health and Human Services says electronic health records firms will be fined up to $1 million if they stifle data-sharing. The rule released Tuesday implements requirements from the 21st Century Cures Act — signed into law in 2016 — to allow HHS’ inspector general to investigate information-blocking claims and HHS to issue fines. It applies to health IT developers, health information exchanges and networks, but not providers yet. That will come in a proposed rule HHS says to expect in September. Why it matters: Congress wants health firms with control of patient records to share them when patients ask. Patients’ records are protected by HIPAA, the federal health privacy law. But patients sometimes want their records shared if, for example, they want to see a new provider. What’s next: The rules go into effect 60 days after they’re published in the Federal Register. HHS Update HHS SIGNS NEW UNION CONTRACT — HHS is set to sign a new collective bargaining agreement Wednesday with its largest employee union, Robert reports. The new contract with the National Treasury Employees Union will cover more than 16,000 employees. The goal of the new contract is to reset the agency’s relationship with its largest employee union. The last contract to be agreed to by the union and HHS was in 2014.   A message from PhRMA: Middlemen say they want lower prices, yet they often deny or limit coverage of lower-cost generics and biosimilars while giving preferential coverage to medicines with higher prices. This might be good for PBM’s bottom line, but it can lead to higher costs for patients. What else are they hiding?   Names in the News The GAO is accepting nominations for members to serve on the Health Information Technology Advisory Committee through July 31. Jessica Brooks-Wood will become the next CEO of the National Association of Benefits and Insurance Professionals on Sept. 1, succeeding Janet Trautwein. She’s currently the CEO of EARN Staffing Solutions. Leslie Foster has been promoted to vice president of health policy assessment at Mathematica. What We're Reading STAT reports on Grail's “uphill battle” to get Medicare coverage for its cancer test. The Associated Press reports on the more than $200 billion in possibly stolen Covid-19 aid. A piece in Health Affairs calls for closing the behavioral health electronic health record gap.   LISTEN TO POLITICO'S ENERGY PODCAST: Check out our daily five-minute brief on the latest energy and environmental politics and policy news. Don't miss out on the must-know stories, candid insights, and analysis from POLITICO's energy team. Listen today.       Follow us on Twitter Dan Goldberg @dancgoldberg Katherine Ellen Foley @katherineefoley Lauren Gardner @Gardner_LM Kelly Hooper @kelhoops Robert King @rking_19 Ben Leonard @_BenLeonard_ David Lim @davidalim Megan Messerly @meganmesserly Alice Miranda Ollstein @aliceollstein Carmen Paun @carmenpaun Daniel Payne @_daniel_payne Ruth Reader @RuthReader Erin Schumaker @erinlschumaker Megan R. Wilson @misswilson   Follow us

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