June 26, 2018

Good morning ... It's only been a year, but I forgot how much I love reading rate filings (not at all).

1 big thing: The lawsuit that could help usher in Amazon Pharmacy

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A lawsuit between startup CareZone and pharmacy benefit manager Express Scripts could provide an opening for Amazon to enter the pharmaceutical supply chain, Axios' Bob Herman reports.

The bottom line: The dispute is over what constitutes a mail-order pharmacy. And CareZone believes it could set the path for Amazon if it's successful against Express Scripts.

How it works: CareZone Pharmacy, the target of Express Scripts' action, encompasses two brick-and-mortar facilities that dispense medication. CareZone, a legally separate entity, is a smartphone app that helps people get their prescriptions at home, either through mail or courier.

How Amazon fits in: If CareZone wins this dispute, it could pave the way for other entities, like Amazon, to mimic this new kind of pharmacy business model on its own or through acquisition.

  • Combined with the existence of "any willing provider" laws — which require middlemen to accept any health care provider (like a pharmacy) that is willing to accept contract terms — this could significantly change home delivery of drugs and make it difficult for PBMs like Express Scripts not to do business with such entities.
  • "If we force the market open, then Amazon can basically walk into it, and Express Scripts will have some very problematic precedents to deal with," CareZone CEO Jonathan Schwartz told Bob.

Read more.

2. Kentucky and Florida insurers seek rate hikes

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Two more states have released proposed Affordable Care Act premiums over the past few days. The results are a mixed bag.

Kentucky: Both of the insurers in the state's individual market are seeking premium hikes.

  • Anthem is proposing an average rate increase of just 3.5%, and is planning to expand into 17 counties where it didn't sell coverage this year.
  • Take that expansion with a grain of salt, though — Anthem pulled out of 61 counties between 2017 and 2018. Moving back into 17 of them still bypasses a lot of the state.
  • CareSource proposed an average increase of 19%. It said about 5% of that comes from the growth in medical costs, while the rest is a result of decisions from Washington — namely, the repeal of the individual mandate.

Florida: Nine insurers want to sell policies in the state's individual market, including seven who want to sell on its ACA exchange.

  • They're seeking an average premium increase of 8.8%.
  • Cigna is the outlier, seeking hikes of 30%. However, Cigna is only planning to sell outside the exchange and, according to its rate filing, the company only expects 269 people to be affected by its premium hikes next year.

3. FDA approves first drug made with marijuana

The Food and Drug Administration has, for the first time, approved a drug derived from marijuana. It's called Epidiolex, and it treats seizures associated with "two rare and severe forms of epilepsy," the agency said in a release.

Why it matters: Medical marijuana is getting a closer and more serious look in Washington right now, in part as an alternative to highly addictive prescription opioids.

  • “This approval serves as a reminder that advancing sound development programs that properly evaluate active ingredients contained in marijuana can lead to important medical therapies," FDA Commissioner Scott Gottlieb said.

One key difference: The new drug is made from a different part of the marijuana plant. It does not contain tetrahydrocannabinol, or THC, which is the compound in marijuana that gets you high.

4. How conscience protections work

The New York Times flags the story of Nicole Arteaga, whose doctor prescribed her a medication to end a pregnancy that had already failed.

What happened: Arteaga's doctor had told her that "there was no fetal heartbeat and the pregnancy would end in a miscarriage," and prescribed misoprostol "rather than have a surgical procedure to remove the fetal tissue from her uterus," per NYT.

  • But the Walgreen's pharmacist who was on call when she went to pick up her prescription refused to give it to her, citing his ethical objections to abortion.
  • Arteaga's Facebook post about the encounter has been shared tens of thousands of times.

Some commenters have called for Walgreen's to fire the pharmacist, but what he did is perfectly legal — in Arizona, where Arteaga lives, and elsewhere. Six states have laws on the books ensuring that pharmacists don't have to fill prescriptions that would violate their conscience, according to the Dallas Morning News.

What to watch: The Trump administration has proposed new federal conscience protections and established a new division to safeguard them.

What we're watching today: HHS Secretary Alex Azar testifies Tuesday at a Finance Committee hearing on drug prices. Willing to bet he'll also be testifying about HHS' role in housing migrant children.

What we're watching this week: Senate HELP committee hearing Wednesday on health care costs. Senate oversight committee hearing Wednesday on Medicaid fraud and overpayments.

Got any GIFs of anything other than men in swimming pools? 'Cause I'm not too sure how I feel about this accidental theme today. Send them to [email protected].