PBM Lawsuit; How QALYs Discriminate

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Welcome to Healthcare Policy Pop. I'm Hannah Wolf. It's Tuesday, April 25th, 2023. Today's pop Topics a PBM Lawsuit in the state of Ohio, and a new book on the negative impacts of the quality adjusted life year, also known as the Quali. Here is Dr. Bill Smith, the author of Rationing Medicine, a book about the quali. In my view, the methodology discriminates against particular groups of patients, and that's what I write about in the book. It discriminates against elderly patients that don't have a lot of life to give it discriminates against people living with disabilities who are never gonna have a perfect quality of life.

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People with rare diseases. And according to Smith, the discriminatory list goes on. The quality is a metric used to determine the cost Effectiveness of drug therapies, and it does that by assigning a monetary value to human life. As he researched his book, Smith says he learned that the quality doesn't even do that well. And the more I read, the more I realized this is a completely subjective standard. It's completely made up. So if you rate that the value of a life lived in good health at a hundred thousand dollars or $150,000 says the quality does in the us us. Why did you pick that number? You know, I would rate my kids' lives.

(1m 26s):
It's worth millions, tens of millions, hundreds of millions of dollars. And if you rated the value of a life at 2 million, not a hundred thousand, most drugs would be rated as cost effective. And if you lowered that threshold down to say $5,000, most drugs would be rated as not cost effective. So there's an arbitrary nature to this. Smith would like you to read his whole book to learn as much as you can about the quali, but if he had to pick just one section that you had to read, it's the chapter on rare diseases. Smith says that's where the quali truly falls short. So they're not making the blockbuster drugs that they used to, where millions of people would take the same cholesterol lowering drug, or they're making drugs for niche patient Populations because they understand a lot about genetics and how that's related to disease.

(2m 18s):
And the quali just can't rate these rare disease drugs because that threshold is too low for a hundred thousand dollars. Many of these rare disease drugs are gonna cost far more than that, and therefore not be rated cost effect. So I think quality is really gonna stifle what is cutting edge of biopharmaceutical research. Smith believes that drug pricing should be more market oriented, where all sides weigh in instead of an arbitrary metric. You can find a link to Smith's book in the show notes in an effort to lower drug prices for patients.

(2m 58s):
The Senate Finance Committee released Framework for a PBM bill to address how PBMs and federal health programs interact. It includes several potential policy solutions that you can find linked in the show notes. So what the Lawsuit in Ohio is really centered on is how PBMs and their vertically integrated health insurance enterprises are engaging in the practice of what we'll just say is hiding the ball, building new layers within their enterprises as a means to distort hide and withhold drug maker price concessions such that they don't have to share them with their end clients or the patients.

(3m 43s):
The Senate Finance Committee isn't the only group taking action against PBMs Antonio Chacha, C e o of 46. Brooklyn Research tells us about a Lawsuit that Ohio Attorney General Dave Yost, filed against several PBMs accusing them of illegally driving up drug prices. Chacha says, through the years the implementation of PBMs has become flawed, But over time, through that multi-layered or that vertical integration where all of a sudden they started also being paid for the medicines. So they money from manufacturers in exchange for coverage, they've opened their own specialty pharmacies, retail pharmacies, mail order pharmacies, so they're getting paid to actually dispense the medicines, and now they're gobbling up physician practices.

(4m 34s):
Now they're creating these new rebate aggregator companies and group purchasing organizations, so it's gotten to the point where their incentives are no longer. Pure Tacha says, attorney General Yost has had success in the past with similar lawsuits. You can read the full text in the show notes. Finally today, the House Energy and Commerce Subcommittee on Health will hold a hearing on Wednesday to look at ways to lower unaffordable healthcare costs. Patients will be monitoring this hearing, and we'll report it here in a later episode. Pat Carroll from Connecticut is today's patient correspondent.

(5m 15s):
Carol lives with primary immunodeficiency and must have infusions of donor blood every month that cost more than $8,000. Carol used to benefit from copay assistance programs that made the price more manageable. However, the implementation of copay accumulators has changed everything. These prohibit manufacturer copay assistance from counting toward our cost sharing amount. We need federal legislation to protect us and allow the copay assistance plans to reduce our financial burden as the programs were originally intended by requiring copay assistance to count toward patients cost sharing responsibilities, that financial support will allow us to sleep a little better at night.

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That's all for today. Join us again here on Thursday morning for another Healthcare Policy Pop, a resource of Patients Rising. Now. I'm Hannah Wolf. Have a great day.