AMP is WAC -- 1/30/26
Salty, Not Sweet
This week I had to remind myself that we live in the AND. Things can be truly awful around us, but there are still moments of happiness and hope. There are some periods in life where it is harder to find the AND, but it is there. At least that is what I have to believe. To anyone just wondering WTF all.the,time, you are not alone.
Stop Being Polite and Start Getting Real. On Monday, the American Hospital Association (AHA) urged the Health Resources and Services Administration (HRSA) to take immediate action to block Eli Lilly’s updated 340B policy from going into effect on Feb. 1. The headline fight is “claims data,” but the real fight is authority. Who gets to set the operational rules of the 340B program when the statute is broad, enforcement is uneven, and the money is big.
Starting Feb. 1, Lilly will require all 340B covered entities to submit claims-level data for in-house pharmacy dispensing. That expands an approach it has already applied to contract pharmacies. The reporting runs through the 340B ESP platform and applies across Lilly’s portfolio, with timeframes tied to dispensing and, for administered products, to administration. Remember - duplicate discounts are prohibited, Medicaid rebate exposure is real, and without reliable data, manufacturers are expected to absorb compliance risk they cannot actually manage.
AHA’s message back to HRSA is kind of whiny. It argues Lilly is imposing an unlawful condition on access to a statutory discount and asks HRSA to stop the policy before it becomes the next normal. AHA also floats the use of civil monetary penalties if the policy results in overcharging 340B hospitals. Not subtle. It’s an attempt to force HRSA to choose between tolerating a manufacturer-built guardrail or treating it as noncompliance.
For manufacturers watching closely, this is the live test of how far “duplicate-discount guardrails” can go before they get recast as coercion. If HRSA stays quiet, more companies will try data-conditioned approaches because the incentive is obvious. If HRSA intervenes, the industry gets a clearer boundary, but also a reminder that 340B compliance risk remains a manufacturer problem even when manufacturers are told not to ask for the data.
Before anyone gets riled up, I recognize that there are different types of 340B covered entities and data is hard for a lot of them. And not all of them are a problem with a capital P. But c’mon. You want a discount, show the claim. This isn’t a $100 million dollar program. We are so far past any excuses. It’s irresponsible for a manufacturer to just pay any discount without receipts much less ones in the billions of dollars.
Stability Fail. Markets Bail. On Monday, the Centers for Medicare & Medicaid Services (CMS) released the CY 2027 Medicare Advantage (MA) and Part D Advance Notice, framing it as a push for payment accuracy and sustainability. The Administration had signaled it wanted stability. Then it effectively held Medicare Advantage rates flat, and Wall Street had a meltdown.
CMS’s proposed average MA payment update was 0.09%, far below what many analysts and plans were expecting. Remember, MA is a risk-score business. Emphasis on the word business. CMS has spent years tightening the gap between documented risk and actual spending, and this Advance Notice continues that direction. Those technical calibration decisions show up as real revenue pressure. Plans do not absorb that quietly. They either trim benefits, tighten utilization management, reprice, or exit counties. Sometimes all of the above.
Within hours, major insurers with heavy MA exposure sold off hard. Reuters reported UnitedHealth down about 8%, CVS down about 9%, and Humana down nearly 14% after the proposal landed.
For manufacturers, the reason to care is not insurer stock charts. When plan economics get tighter, the pressure typically moves downstream into coverage tools that shape patient access (formularies, UM, negotiation.)
But honestly what I found most disappointing about the Advance Notice was the lack of patient-forward policies. Nothing about the Medicare Prescription Payment Plan or formulary review. The whole thing clocked in at 169 pages, way less than usual. This used to be THE document when you were looking for how CMS was thinking about these benefits and patient access. And now – crickets, which is sort of the problem.
Shots all around, Part B Gets Invited to the Negotiation Party. On Tuesday, CMS announced the 15 drugs selected for the third cycle of Medicare drug price negotiation that will be implemented on January 1, 2028. For the first time the list includes Part B drugs.
This is kind of a big deal. Part D negotiation lives in a world of plan formularies, pharmacy claims, and the usual rebate gymnastics. To be clear, implementation has been painful, but Part B is a different animal. It is buy and bill. It is provider acquisition cost and add-on payments. It is site of care politics.
And remember, CMS is not picking drugs because they are unpopular. It is picking drugs because they are widely used. CMS says the selected products accounted for about $27 billion in Medicare Part B and Part D spending in the period it used for selection, roughly 6% of total Part B and Part D drug spend over that window.
In addition, CMS selected Tradjenta for renegotiation, originally negotiated for 2027. The program is becoming an operating system and not a one and done.
For manufacturers, the practical implication is that negotiation planning can no longer be treated as a Part D problem with a Part B footnote. Part B inclusion also changes provider economics and, without a published Average Sales Price on these negotiated drugs, an alternative must be found. This is where we could see contracting strategy start to change earlier than people think, because the reimbursement reference point is the access reference point.
Direct to Patient, Indirectly a Problem. On Tuesday, the HHS Office of Inspector General (OIG) released a Special Advisory Bulletin on direct-to-consumer (DTC) prescription drug sales to patients who have Medicare or Medicaid coverage. This is not OIG “blessing” TrumpRx. It’s OIG acknowledging the sticky wicket that shows up when lower-cost cash-pay options collide with federal program rules and incentives.
OIG flags two ways these programs can become problematic under the federal Anti-Kickback Statute. First is the pricing-as-marketing issue. If a manufacturer offers a federal program enrollee a drug at a lower cost as a way to induce that patient to purchase other federally reimbursed drugs, items, or services from that same manufacturer, OIG sees inducement risk. The discount stops being about affordability and starts looking like a portfolio strategy.
Second is the seeding concern. A DTC program can be used to get enrollees started on a manufacturer’s drug with an expectation that Medicare or Medicaid will be billed later, for example if the drug becomes more affordable through coverage. That’s planting future utilization.
Why now? On Wednesday, HHS also published a Federal Register notice outlining the structure and intent of TrumpRx, framing it as a pathway for manufacturers to offer drugs directly to consumers at lower prices outside traditional coverage channels and asking for additional input on how it could interact with the antikickback statute. On Thursday, Seeking Alpha reported that the White House is expected to launch the TrumpRx platform on Friday, positioning it as a DTC option backed by recent pricing deals. Put differently, the channel is coming online right as the enforcement referee is explaining how it can go sideways.
For manufacturers, DTC or the preferred “direct-to-patient” framing could help some un- or underinsured. But from a patient point of view, it can get messy fast. Patient advocates are already raising concerns that Part D beneficiaries could use DTP cash-pay options and then find that spending does not count toward deductibles or the out-of-pocket cap, because it never ran through Part D in the first place. If DTP becomes a shortcut around Part D adjudication, the savings might be real. The confusion will be too.
Accounting for Vertical Integration. Late last week, the University of Southern California Schaeffer Center released a paper arguing that pharmacy benefit manager (PBM) profits are not as small or as straightforward as they are often portrayed.
As we’ve all learned from Adam Fein, PBMs today sit inside vertically integrated firms that also own insurers and pharmacies. When those firms report financials on a consolidated basis, transactions between the PBM and its sister companies don’t show up as profit at the PBM level, even if value is clearly being generated somewhere else in the enterprise.
The authors walk through several examples. Rebate dollars that are technically “passed through” can still support affiliated business lines. Fees paid to PBM-owned pharmacies may appear as costs rather than earnings. Spread pricing and administrative fees can be booked in ways that flatten reported margins without eliminating incentives. None of this is illegal. It’s accounting.
That’s kind of the point. Policymakers are being asked to assess PBM behavior using numbers that were never designed to answer the question they actually care about: how PBMs make money, and how those incentives shape formularies, pharmacy reimbursement, and patient cost sharing.
This matters because Congress and the Federal Trade Commission are actively debating PBM reform. If lawmakers rely on margin statistics that obscure incentives rather than illuminate them, they risk designing fixes that miss the mechanism entirely. The Schaeffer paper doesn’t tell policymakers what to do. It tells them they’re asking the wrong questions of the data.
Bronze for the Green. As early numbers come in, it looks like Affordable Care Act enrollment is bending, not breaking, even after the enhanced federal subsidies expired. What’s interesting is that people stayed enrolled, but what they enrolled in has changed. More enrollees are landing in Bronze plans, the cheapest option on the shelf. The coverage card stays in the wallet. Using the insurance coverage gets more expensive with higher deductibles and out-of-pocket costs.
Part of the reason that we didn’t see a mass exodus was that states showed up in a big way. A handful effectively built their own mini backstops to soften the loss of the federal enhancement. California expanded state-funded affordability help. New Mexico moved to backfill premium assistance across a broader income range. Colorado, Maryland, Massachusetts, and Connecticut added or extended state subsidies and targeted relief, with Connecticut pairing the support with a special enrollment window for people hit by the change. It is not uniform, and it is not limitless, but it is real policy capacity being exercised.
But (and you knew there was one), plan selection is not the same as paying the first month’s premium, and it is definitely not the same as staying enrolled month over month. Enrollment-and-cancel behavior is the quiet destabilizer: churn increases, risk pools get weird, and the ACA segment starts behaving less like stable commercial coverage and more like underinsurance with paperwork. The market can look fine in a press release and still feel fragile in pharmacy claims by March. Expect this to be a 2026 voting issue.
FOIA Gras – de(Liver) the Agreement. On Tuesday, Public Citizen filed a Freedom of Information Act (FOIA) lawsuit in D.C. federal court seeking records of what the complaint calls “MFN” drug pricing agreements involving Pfizer and Eli Lilly. The filing is not a merits case about whether most-favored-nation pricing is good policy. It’s a process case about whether the government is meeting basic FOIA obligations when it makes big public claims about “agreements” that are not publicly available.
The complaint lays out the timeline. It points to a May 12, 2025 executive order directing officials to communicate MFN price targets, followed by July 31 presidential letters to manufacturers demanding MFN-style commitments. It then cites public announcements of an MFN agreement with Pfizer on September 30 and with Eli Lilly on November 6, while noting the text of either agreement was not released.
Public Citizen says it filed two FOIA requests on October 21 (one to the Department of Health and Human Services, one to Commerce) seeking “any and all” formal or informal MFN-related agreements with Pfizer, including drafts and post-announcement documents. It filed two more on November 9 seeking the same for Lilly, again sweeping in drafts, partial understandings, and agreements entered before or after the public announcement. The core allegation is straightforward: more than 20 business days passed without a final determination or final production.
For manufacturers, the business-relevant signal is that MFN-style signaling is being pulled toward a world where it has to survive paper, process, and precedent. Even if a company prefers clarity, a public “agreement” that cannot be produced creates uncertainty that is hard to operationalize, and easy for future actors to reinterpret once it’s in writing. FWIW, based on what I’ve heard from a few people, even people high up the food chain within these organizations haven’t seen the agreements.
Show Me the Money. Charles River Associates put out a nice graphic showing why upper payment limits (UPLs) don’t work. Prescription Drug Affordability Boards (PDABs) could save a lot of time and money if they understood why. If you need more, here is the paper I worked on with RAAP last year.
On my Mind: Covered, Not Protected – The New Health Insurance Reality
With stories on TrumpRx and Bronze coverage, I wanted to dive into something that has concerned me more and more – the underinsured. For the last decade, access debates have been dominated by coverage. How many people are insured. How many gained coverage. How many lost it. Those numbers still matter but they miss the problem that is in plain sight; people have insurance, but it doesn’t protect them.
Patients are insured on paper but still face financial and administrative barriers that delay, interrupt, or prevent appropriate care. Coverage exists but not access.
The Washington Post highlighted new polling showing that health care costs have become Americans’ top financial worry, outranking groceries and housing. More than half of adults expect health care to become less affordable in the near future. Importantly, that concern is not confined to the uninsured. Employer family coverage premiums have risen 26% over the last five years and now average roughly $27,000 annually. That is the emotional and financial backdrop for everything else.
What underinsurance means in reimbursement terms
Underinsurance shows up in benefit design and operational rules that technically preserve coverage while making it harder to use. High deductibles and coinsurance. Specialty tiers with percentage-based cost sharing. Prior authorization, step therapy, quantity limits, and site-of-care rules. Benefit complexity that increases abandonment even when a drug is covered. None of this requires a formal denial. Delay becomes the lever and friction does the work.
How patients end up insured but exposed
1) Premium pressure is driving benefit downgrades. As discussed above, the expiration of enhanced Affordable Care Act subsidies pushed many enrollees toward Bronze because it was the only place premiums felt survivable. But Bronze trades premium relief for cost exposure. KFF has shown that some enrollees moved from silver plans with cost-sharing reductions and very low deductibles into Bronze plans with deductibles exceeding $7,000.
2) High-deductible employer coverage is no longer a niche design, it’s the default. KFF’s most recent Employer Health Benefits Survey reports that the average deductible for single coverage among workers with a general annual deductible is about $1,886. That is an average, which means many people are well above it. For patients starting therapy in January or February, the benefit can function like self-pay with paperwork attached.
What this looks like operationally
Underinsurance shows up in signals reimbursement teams recognize immediately:
· Claims adjudicate successfully, but patients abandon prescriptions when they see the cost.
· Therapy starts are delayed while prior authorization cycles stretch on, even for conditions where time matters. Patients pay out of pocket and appeal later because waiting is not clinically viable.
· Copay assistance helps initially, but accumulator and maximizer designs blunt the relief or create midyear surprises.
· Plan changes and churn reset deductibles and authorizations, forcing patients to start over even when nothing about their care has changed.
None of this shows up cleanly as a denial statistic. It shows up as delayed starts, interrupted therapy, and messy persistence curves.
Underinsurance breaks a lot of assumptions that still sit inside access strategy and forecasting. Covered lives increasingly overstate usable access. The metrics that matter are time to therapy, abandonment, and early persistence. Hub services, benefit verification, appeals, bridge supply, and financial navigation now carry more of the access burden because the benefit itself is no longer doing that work.
It also changes contracting dynamics. When plans can suppress utilization through friction rather than exclusion, they capture savings without ever negotiating price.
Why cash pay is having a moment, and why TrumpRx fits here
When insured patients face a multi-thousand-dollar deductible, a cash price can feel like access. And if prior authorization slows down a start, paying cash and just going around the benefit can feel rational.
Cash pay is not replacing insurance. It is routing around insurance when insurance stops working smoothly. That is not customer preference, it is a signal that we have a problem. An insured population is increasingly acting like an underinsured one at the point of care.
There are no easy answers here. If there were, we would have found them. The problem isn’t the Affordable Care Act. The root of the problem is the whole system but we’re not ready to go there. The gap between coverage and use is the reimbursement story for 2026. It should change how we think about healthcare but most likely it may need to get worse before we step forward.