I’m now over at Bluesky as @brianreid.bsky.social. I really don’t need another social account to tend to, so most of my posting will remain at LinkedIn. But the community at Bluesky is more robust than I realized, so I’ll be lurking aggressively.
Of course, the very first story I was served at Bluesky was one I hadn’t seen: the one about dental stocks soaring on the RFK Jr. nomination. (Interestingly, it was Scott Gottlieb who put it atop my feed.) I hadn’t thought about the downstream positive impacts on dentists. Good news for the family business, I guess!
The political intrigue of the past three weeks has kind of tamped down a lot of PBM-related news, but those days are over. A PBM reform push is coming in the lame duck, and all of the other elements of the “modified Auchincloss” continue unabated.
Yesterday made that perfectly clear.
First, the PBM industry clapped back at the FTC, filing a lawsuit that claimed that the FTC’s legal action was unconstitutional for a handful of dull, procedural reasons. As always, I have no opinion on the legal niceties here, but I can link to Bloomberg’s coverage.
The Bloomberg story provides a solid overview of the arguments, and it also included a remarkably snarky response from the FTC, an agency that I do not associate with shade-throwing: “It has become fashionable for corporate giants to argue that a 110-year-old federal agency is unconstitutional to distract from business practices that we allege, in the case of PBMS, harm sick patients by forcing them to pay huge sums for life saving medicine.”
Adding to the news flow was PCMA’s announcement that it had fielded a 700-employer survey that found that employers almost universally love their PBM, understand their PBM, think that their PBM delivers savings, etc. The data generally supports one of the key arguments against reform: that the system is working well for the end customer of the PBM: the plan/employer.
The counterargument here is the one that Mark Cuban has been making ad nauseam: employers are content because they don’t know what they’re buying. Whether you agree with Cuban’s take on employer education or the PCMA take is probably predictive of your enthusiasm for reform.
Look, I don’t have any better answers than you all do. I have no idea why Donald Trump would nominate Mehmet Oz to run CMS. I have no idea why Oz would want the job. I have no idea if he is confirmable. I have no idea of what he’d do if he ends up getting confirmed/installed.
(A quick reminder: my post-election mantra is “no one knows anything.”)
These nominations increasingly feel like the opening of the Monty Python sketch about the Spanish Inquisition. The surprise seems to be the point.
I have no special insight**, but I’ll make three general points:
CMS is largely a bureaucracy. There isn’t a lot of room for freelancing. The best CMS leaders, historically, have cleared two very high bars: they can effectively run a large organization and they know the ins and outs of the really boring parts of health policy.
It’s not clear that Oz checks that first box (effectively running a large organization). That doesn’t mean that he can’t have an impact, or that elements of the Trump agenda, whatever it may turn out to be, can’t be implemented at CMS or by Oz. It’s just that he is probably not the ideal vehicle for operating the levers of power that exist at CMS.
It’s not clear that Oz checks the second box, either (knowing health policy cold). In some ways, I’m grading on a harsh curve here.*** Oz has weighed in on insurance coverage, most notably in a Forbes opinion piece in which he advocates for a Medicare-for-All approach based on universal access to Medicare Advantage, funded by payroll taxes.**** But I can’t imagine that Oz was nominated to expand government-run health care.
The irony is that there are plenty of smart, conservative thinkers who meet the criteria I just laid out above. Turning the battleship that is CMS in a new direction is not an impossible task.
It’s just one custom-designed for wonks, not TV personalities.
** I’ll leave the cataloging of Oz’s weirdness around supplements and weight loss and strange therapeutic recommendations to others. On the flip side, that kind of dangerous thinking would be way worse in the head of the FDA or NIH. (Yes, yes: I know this is a “hold me beer” moment. There are shoes left to drop.)
*** A quick look at past CMS administrators suggests that this is a post for serious wonks, not those dabbling in hot-button concepts. This is a gang that includes Gail Wilensky, Mark McClellan, Don Berwick, and Seema Verma. Oz is not remotely in the same ballpark, and writing a single Forbes piece doesn’t get him any closer.
**** He also correctly identified PBMs as a core part of the insulin-pricing issue, way back in 2019. That level of systemic understanding has prompted at least some Wall Street folks to take a sanguine attitude toward the nomination.
There is a strain of argument that says that Robert Kennedy is not reason for the biopharma industry to panic because, a) he doesn’t really care about pharma-adjacent issues other than vaccines, and b) he probably doesn’t have the will or the know-how to effect change anyway. WSJ’s David Wainer laid out that argument in his Heard on the Street column today. “Yes, he has dangerous ideas, but he’ll be too ineffective to execute them” doesn’t really reduce my panic, but YMMV.
Also expressing a certain amount of calm in the face of chaos: industry execs. STAT gathered some comments made at the Jefferies conference this week, most of which expressed some confidence that Trump 2.0 wouldn’t move particularly decisively to gore any industry oxen.
Drug importation as a solution to high prices is objectively a dumb idea in that it won’t work. That’s probably why Florida has made no progress on its effort, per this KFF story that is extra funny for documenting all of the ways that Florida officials have tried to avoid commenting on what is clearly a moribund effort.
Thanks for reading this far. I’m always flattered when folks share all or part of Cost Curve. All I ask is for a mention or tag. Bonus points if you can direct someone to the subscription page.
