Pharmacy benefit managers took a beating yesterday on Wall Street as the world remembered/realized they are the prime target of the Trump administration's plan to curb prescription drug prices, and that plan is moving forward.

Threat level: We know enough about the Trump administration's next big health care regulation to know what's at stake, even if a lot of the specific details still need to be filled in.

• We know it will go after PBMs' rebates, and we know it will do so via the "safe harbor" that says those rebates aren't considered kickbacks.
• There are still plenty of unanswered questions within that framework, but they are questions about scale — about how bad this will be for the industry.

What they're saying: The existing structure “is the soft-underbelly of the PBM alligator. This proposal seemingly guts it. If not replaced with some other scheme, their current business model evaporates and they become what they were—low-margin claims processors," drug industry lobbyist Barrett Thornhill told the Wall Street Journal.

The administration is still talking tough with pharma, while nevertheless positioning itself on the same side of the issue substantively.

• “When this president talks about fundamental change to drug markets, he follows through," HHS Deputy Secretary Eric Hargan told the board of PhRMA, the industry's leading trade group, according to Bloomberg's Anna Edney.
• HHS also praised Merck yesterday for agreeing to lower the price of some drugs — a step that appeared to go further than pledges by Pfizer and Novartis to delay price increases.

Yes, but: As the New York Times notes, Merck's price cuts aren't as impressive if you look closer at which products they cover.

• One is a hepatitis C drug that, after accounting for rebates, did $0 in sales in the first quarter of this year.
• Six more are drugs that have already lost their patent protections — meaning they've already lost market share to cheaper generics.

The bottom line: The administration has always been more focused on PBMs than pharmaceutical companies when it comes to drug prices, and there's no reason to think that has changed.

About 4 million more people would have insurance and premiums would be roughly 12% lower if every state passed its own version of the Affordable Care Act’s individual mandate, according to new research from the Commonwealth Fund and the Urban Institute, both liberal think tanks.

• The effect on premiums would vary from state to state, from a 4% reduction in Alaska up to 21% in New Mexico, the study says.
• Kentucky, Montana, North Dakota and West Virginia would each see more than a 20% drop in the number of uninsured residents.

It seems extremely unlikely that any of those states would pass individual mandates.

Where it stands: New Jersey is the only state to pass its own mandate since Congress nullified the ACA’s. Massachusetts already had one. That leaves 48 more states — and passing an insurance mandate at the state level is still pretty hard. It's still an unpopular policy, at least nationally.

• Washington, D.C., has also passed its own mandate. But Congress, in its infinite respect for the democratic process and the primacy of state and local government, is yet again intervening to stop the District from making its own decisions. (Not that I'm a bitter D.C. resident or anything.)

The catch: So far, the loss of the federal mandate has not been as devastating as many experts predicted.

• California is the latest state to announce relatively modest premium increases for next year. ACA premiums there will rise by about 9% on average, roughly 6% of which is due to the loss of the individual mandate.
• A 9% hike still hurts unsubsidized families who are on the hook for all of those costs themselves. But it’s better than the double-digit increases many experts feared.

The number of low-income people and children who are enrolled in a Medicaid plan managed by a private health insurer, as of June 30: 54 million, according to new estimates from consulting group Health Management Associates.

Why it matters: That means three-quarters of all Medicaid enrollees are now in private plans vs. general government enrollment. But some research suggests going from a standard program to privatized Medicaid may not save states money.

What to watch: North Carolina wants to move to Medicaid managed care by 2019, and a request for proposal is expected to come out next month, Axios' Bob Herman notes. This will be a multi-billion-dollar opportunity for insurers.

Well here’s a downer, courtesy of the New England Journal of Medicine: Bundled payments — a precursor to the broader shift toward “value-based” care — may not work.

How it works: The big animating idea for the health care delivery system is to stop paying each individual nurse, doctor, hospital and clinic for each individual service they perform, and instead start paying for a single episode of care — for treating Patient X for Condition Y.

• Bundled payments are exactly what they sound like, and are one of the means to that end.

The details: Researchers looked at the results for the five conditions most commonly reimbursed through Medicare's bundled payments initiative, comparing several metrics:

• How much Medicare paid for each patient.
• How long patients stayed in the hospital.
• How many died.
• How many were readmitted.
• The number of emergency room visits for each hospital.

The bottom line: Accepting bundled payments “was not associated with significant changes” in any of those metrics, the researchers found.