CMS Tries Prevention at Age 65+ (Better Late Than Never?), Taxpayers Cover Insurer Drug Losses in Captive PBM Market, and Pharmaceutical Giants Mysteriously Quiet on Launch Prices

Hey all,

Happy Tuesday! We keep discovering the same truth—prevention is cheaper than treatment, but we only fund it after the damage is done. CMS just launched a $100 million functional medicine model for Medicare beneficiaries to focus on nutrition and lifestyle, which would work better before age 65 when salad might actually prevent disease rather than just delay the inevitable. Meanwhile, taxpayers issued a record $16 billion bailout to Part D insurers struggling with specialty drug costs—costs that might be lower if we addressed chronic disease earlier. The pattern is clear: we’ll spend billions managing disease and bailing out insurers, just not on the upstream prevention that might reduce the need for either.

Enjoy the rundown!

Jacob Brody (Co-Founder & CEO, ZorroRX)

(Fierce Healthcare) CMS Functional & Lifestyle Medicine Model

The Centers for Medicare & Medicaid Services (CMS) has introduced the MAHA ELEVATE model, a $100 million initiative aimed at funding up to 30 proposals that integrate functional and lifestyle medicine into Medicare, focusing on preventive care through nutrition, physical activity, sleep, and stress management. The model is part of a broader shift toward value-based care and holistic health, signaling potential future Medicare coverage for services not traditionally reimbursed, and has received strong support from ACOs and primary care advocates. Now if only we could get a MAHA ELEVATE for people before they hit Medicare age—because salad and sleep probably work better before the wheels fall off after age 65. Full Article

(STAT News) Medicare Part D drug spending and insurer bailouts

The federal government issued a record $16 billion in reconciliation payments to Medicare Part D insurers to cover far higher-than-expected prescription drug costs in 2024, signaling significant stress in the program’s drug market. While the Inflation Reduction Act has successfully capped seniors’ out-of-pocket costs and shielded them from rising prices, it has also shifted more financial risk onto insurers and taxpayers amid surging use of costly specialty drugs like cancer therapies and GLP-1s, boosting pharmaceutical company revenues and raising concerns about long-term sustainability. And of course, it’s surely just a coincidence that towering administrative barriers keep new competitors from becoming Part D PBMs, leaving taxpayers to generously underwrite ever-rising costs for the same dominant players who helped design the maze in the first place. Full Article

(The American Journal of Managed Care) Drug Launch Price Transparency, 2022–2024

A new study found that only one-third of pharmaceutical companies proactively disclosed launch prices for their drugs approved between 2022 and 2024, while another third disclosed prices reactively through media reports. Smaller public companies were significantly more likely to release pricing details upfront, likely due to securities regulations requiring disclosure of material information to investors—unlike larger firms or private companies. Greater transparency could improve public understanding of drug value, though it’s truly shocking—just shocking—that giant pharmaceutical corporations aren’t rushing to tell us how much their drugs cost. Full Article