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My initial response to the FTC PBM settlements, Mark Cuban on LinkedIn
ICYMI, Mark Cuban is highly skeptical of the Federal Trade Commission’s settlement with Express Scripts. As he correctly notes: “If the PBM convinces the employer to choose the current system, then they can do it just the way they always have.”
Mark Cuban is right: the FTC–Express Scripts settlement doesn’t overhaul the entire system. He zeroes in on the crucial “Section XI. Meeting Competition” loophole that I wrote about in The FTC Blows Up Express Scripts’ PBM Model—and Launches the Net Pricing Drug Channel.
Nonetheless, I still believe that the settlement puts us on a path toward something better.
By basing patient out-of-pocket costs on net prices and passing through rebates at the point of sale, the settlement helps shield patients from the excesses of the gross-to-net bubble.
What's more, the default plan sponsor agreement aligns with a Net Pricing Drug Channel (NPDC). Yes, plans could still undermine the NPDC through the Section XI carve outs. That's probably why Wall Street didn't freak out.
But changing the default sets the system in motion.
A top-down attempt to “fix everything” at once is almost guaranteed to fail, creating chaos and disruption for healthcare stakeholders and patients. Setting new rules and letting incentives do the work, however, could (maybe, hopefully) get us there.
Either way, it’s going to be a wild ride. Stay tuned!
Mark Cuban is right: the FTC–Express Scripts settlement doesn’t overhaul the entire system. He zeroes in on the crucial “Section XI. Meeting Competition” loophole that I wrote about in The FTC Blows Up Express Scripts’ PBM Model—and Launches the Net Pricing Drug Channel.
Nonetheless, I still believe that the settlement puts us on a path toward something better.
By basing patient out-of-pocket costs on net prices and passing through rebates at the point of sale, the settlement helps shield patients from the excesses of the gross-to-net bubble.
What's more, the default plan sponsor agreement aligns with a Net Pricing Drug Channel (NPDC). Yes, plans could still undermine the NPDC through the Section XI carve outs. That's probably why Wall Street didn't freak out.
But changing the default sets the system in motion.
A top-down attempt to “fix everything” at once is almost guaranteed to fail, creating chaos and disruption for healthcare stakeholders and patients. Setting new rules and letting incentives do the work, however, could (maybe, hopefully) get us there.
Either way, it’s going to be a wild ride. Stay tuned!
Patient Perspectives on Health Insurance Design: A Mixed-Methods Analysis, Journal of Market Access & Health Policy
Here’s some evidence of patient demand for the NPDC.
Surveyed patients (n=146) strongly support changes that reduce unpredictable out-of-pocket costs:
As you can see, affordability and predictability matter more than transparency. Patients want to plan and budget—not estimate—out-of-pocket costs. And after paying premiums, they expect coverage for high-value care.
As Peter Kolchinsky of RA Capital often says: No one fakes cancer to joyride chemo.
Surveyed patients (n=146) strongly support changes that reduce unpredictable out-of-pocket costs:
- Eliminating coinsurance for stable chronic meds
- Covering high-value drugs without deductibles
- Capping medication costs as a share of income
- Replacing coinsurance with fixed copays
[Click to Enlarge]
As you can see, affordability and predictability matter more than transparency. Patients want to plan and budget—not estimate—out-of-pocket costs. And after paying premiums, they expect coverage for high-value care.
As Peter Kolchinsky of RA Capital often says: No one fakes cancer to joyride chemo.
The QALY Paradox: An Unintended Consequence Of Most Favored Nation Drug Pricing, Health Affairs
I have long argued that international reference pricing is a flawed policy shortcut, not a sustainable solution. Benchmarking U.S. drug prices vs. other countries overlooks fundamental structural differences in healthcare financing, delivery, and value assessment frameworks.
This timely Health Affairs article raises a deeper legal and policy question at the intersection of quality-adjusted life-years (QALYs) and Most Favored Nation (MFN) pricing models:
Kudos to Dominique Seo, Kenneth E. Thorpe, and T. Joseph Mattingly II for a thoughtful and nuanced take on these complex issues.
This timely Health Affairs article raises a deeper legal and policy question at the intersection of quality-adjusted life-years (QALYs) and Most Favored Nation (MFN) pricing models:
When Congress explicitly prohibits a particular methodology in statute, can the executive branch effectively circumvent that prohibition by adopting foreign prices derived from the banned methodology?As the authors explain, the U.S. ban on QALYs reflects a "bipartisan compromise to protect vulnerable groups from being disadvantaged in the pursuit of cost containment." Referencing foreign prices is not a neutral act when those prices are grounded in frameworks that U.S. law has deliberately declined to adopt.
Kudos to Dominique Seo, Kenneth E. Thorpe, and T. Joseph Mattingly II for a thoughtful and nuanced take on these complex issues.
Site-of-Care Shift for Physician-Administered Drug Therapies: 2026 Update, BRG
Many hospitals are eligible to purchase drugs at sharply discounted prices via the 340B Drug Pricing Program. Physician offices and clinics are not eligible for these discounts. Consequently, hospital profit margins from provider-administered drugs far exceed the profits of physician practices. Once acquired, the practices get access 340B discounts, which boosts buy-and-bill profits.
As a result, 340B hospitals have powerful incentives for vertical integration into physician practices. Last September, the Congressional Budget Office identified hospitals’ acquisition as a key factor behind the explosive growth in purchases in the 340B program.
This BRG study quantifies the predictable result: a steady migration of care in Medicare Part B to hospital outpatient departments.
The share of Part B outpatient spending at 340B hospitals for breast cancer treatments more than doubled, from 23% in 2012 to 49% in 2024. For multiple myeloma treatments, the share grew from 20% in 2012 to 51% in 2024.
Here’s a fantastic visual posted to LinkedIn by my new colleague Bryce Platt.
Alas, the Inflation Reduction Act could compress or even vaporize these profits, as we discuss in Section 6.5.2. of our 2025-26 Economic Report on Pharmaceutical Wholesalers and Specialty Distributors.
As a result, 340B hospitals have powerful incentives for vertical integration into physician practices. Last September, the Congressional Budget Office identified hospitals’ acquisition as a key factor behind the explosive growth in purchases in the 340B program.
This BRG study quantifies the predictable result: a steady migration of care in Medicare Part B to hospital outpatient departments.
The share of Part B outpatient spending at 340B hospitals for breast cancer treatments more than doubled, from 23% in 2012 to 49% in 2024. For multiple myeloma treatments, the share grew from 20% in 2012 to 51% in 2024.
Here’s a fantastic visual posted to LinkedIn by my new colleague Bryce Platt.
[Click to Enlarge]
Alas, the Inflation Reduction Act could compress or even vaporize these profits, as we discuss in Section 6.5.2. of our 2025-26 Economic Report on Pharmaceutical Wholesalers and Specialty Distributors.
Drug Channels Institute, LinkedIn
We have been expanding the DCI team. I’m delighted to introduce some of my new colleagues.
Connect with them on LinkedIn: Tyler, Bryce, and Marie will be at the Drug Channels Leadership Forum. If you’ll be in Miami, introduce yourself.
Connect with them on LinkedIn: Tyler, Bryce, and Marie will be at the Drug Channels Leadership Forum. If you’ll be in Miami, introduce yourself.
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