CVS Sued For Novo Exclusive, Cigna Drops $3.5B On Specialty Pharmacy, Big Pharma Loses Suit Over Unfair Medicare Discounts

Hey all,

Happy Monday! It appears the healthcare industry had quite the productive week—if by "productive" we mean finding increasingly creative ways to prioritize profits over patients while maintaining the appearance of doing the opposite. CVS's previous decision to make Wegovy exclusive over the clinically superior Zepbound has predictably landed them in court (because apparently patients noticed when rebate math trumped actual weight loss results), Cigna dropped another $3.5 billion to tighten its grip on specialty drugs (because what patients really need is more vertical integration), and Big Pharma lost yet another court battle over Medicare negotiations while still insisting they shouldn't have to offer discounts on the business they desperately want to keep. It's almost as if the entire system operates on the principle that what's best for quarterly earnings must somehow be best for everyone else too.

Enjoy the rundown!

Jacob Brody (Co-Founder & CEO, ZorroRX)

(CNN) CVS Caremark Sued Over Dropping Zepbound Coverage

A class-action lawsuit has been filed against CVS Caremark after it stopped covering Eli Lilly’s obesity drug Zepbound on its largest formulary, instead steering patients toward Novo Nordisk’s Wegovy following a new partnership. While CVS argues the two GLP-1 drugs are clinically similar and that the change will drive down costs, patients and doctors counter that the medications are not interchangeable, with studies showing Zepbound delivers greater weight loss and has unique approvals, such as for sleep apnea. The case highlights growing tensions over drug pricing, since the post-rebate price of Wegovy is more expensive than the cash pay price of Zepbound—almost as if CVS prefers an unfair system where rebates take priority over true net pricing. Full Article

(HEALTH CARE un-covered) Cigna’s $3.5 Billion Bet on Specialty Drugs

Wendell Potter, a former Cigna executive turned outspoken critic of the insurance industry, highlights how Cigna’s $3.5 billion investment in Shields Health Solutions extends its reach deeper into the specialty drug market. Building on its acquisitions of Express Scripts and Accredo, this move solidifies Cigna’s control over the specialty pharmacy value chain, tying it more closely to hospitals and patients while raising concerns about reduced competition and higher costs. Lawmakers are floating bills to rein in this kind of vertical integration, but in the meantime, yet another insurer buying up more of the health care system is hardly the kind of headline that leaves anyone shocked. Full Article

(Endpoints News) J&J, Bristol Myers lose appeals on Medicare drug price negotiations

 The US Court of Appeals for the Third Circuit upheld the Medicare drug price negotiation program, rejecting Johnson & Johnson and Bristol Myers Squibb’s constitutional challenges by ruling the process voluntary and not a violation of property rights or free speech. This is another major loss for drugmakers trying to strike down the Inflation Reduction Act, with AstraZeneca eyeing the Supreme Court and cases from Novartis and Novo Nordisk still in play. After all, no one’s forcing Big Pharma to sell to Medicare and Medicaid—they just don’t want to offer the discount while happily keeping the business. Full Article