My followers might recall that back in 2022, I first noted Ge Bai. She had been interviewed by a podcast episode which I shared, you can catch my coverage of a podcast interview with her at https://blog.sstrumello.com/2022/12/podcast-recommendation-relentless.html for more (including where you can listen to her interview with the Relentless Health Care Value podcast). Be forewarned: Ge Bai has a very strong Chinese accent, hence I found it occasionally difficult to follow what she was saying. Fortunately, on podcast interviews, you can rewind things to listen again.
You may visit Ge Bai's faculty page at Johns Hopkins University at https://publichealth.jhu.edu/faculty/3887/ge-bai for more details. Also, her LinkedIn page can be found at https://www.linkedin.com/in/ge-bai-16945370/. That said, on November 26, 2024 on NPR's radio show "All Things Considered", it was revealed that Ge Bai had joined a Washington think-tank known as the Paragon Health Institute https://paragoninstitute.org/ as a policy advisor. See the NPR story mentioning that at https://www.npr.org/2024/11/26/nx-s1-5183231/a-look-at-the-think-tank-that-may-shape-trumps-health-policies for more about that.
Bai's analysis, which delved into the intricate web of relationships between drug manufacturers, insurers, and pharmacies, quickly drew fire from the billionaire entrepreneur Mark Cuban, who runs Mark Cuban Cost Plus Drug Company. On the social media platform BlueSky, Mark Cuban launched a scathing critique (see https://bsky.app/profile/mcuban.bsky.social/post/3lg4gm47ryk2b for his comment):
"Awful piece. PBMs choose to abuse the system. Generic prices are cheaper in the US than in many countries with universal healthcare. She protects PBMs rather than asking why they exist and whether pricing could be negotiated independently."
Cuban's sharp words ignited a broader discussion about the role and impact of PBMs. Antonio Ciaccia of 46brooklyn Research offered a [slightly] more nuanced perspective:
"Sure, some meh defensive stuff [about PBMs] in there, but broad[er] theme is on point: much of PBM games stem from poor system design that begs for their use. Incentivize lower manufacturer and pharmacy sticker prices (repeal safe harbor, no MFN pharmacy contracts, cost plus), and PBM necessity drops like a rock."
Ciaccia's response highlighted a critical point: the current U.S. prescription drug distribution system, with its convoluted "misaligned" incentives and complete lack of transparency, arguably necessitates the existence of PBMs. However, he argues that a fundamental overhaul of the system, with measures including repealing the "safe harbor" exemption from the federal antikickback statute, and prohibiting PBMs' "Most Favored Nation" contracts with retail pharmacies, could significantly reduce the need for these intermediaries going forward.
Blase, a vocal critic of government intervention in U.S. healthcare, has advocated for policies that he asserts prioritize individual choice and supposed market-based solutions. For example, he has targeted the Centers for Disease Control and Prevention (CDC), arguing that its focus should be limited strictly to communicable diseases, labeling other areas of its work as "mission creep." Blase also seeks to roll back expanded pandemic-era subsidies for insurance coverage under the Affordable Care Act, suggesting that these subsidies should be allowed to expire after 2025. I would expect nothing different from an administration which tried repeatedly (and failed) to repeal President Obama's signature piece of legislation. Instead, he promotes Health Savings Accounts (HSAs) as a preferred mechanism for individuals to manage their healthcare costs.
However, the reality for many Americans, particularly lower-income individuals, is that HSAs are simply not even a viable option. As TurboTax data reveals (see https://turbotax.intuit.com/tax-tips/tax-deductions-and-credits/tax-deduction-wisdom-should-you-itemize/L8Ln7K0Gp?form=MG0AV3 for more), 90% of taxpayers choose the "standard deduction" rather than itemizing their deductions, highlighting the limited tax benefits for most individuals. For someone earning minimum wage, the standard deduction significantly exceeds their potential itemized medical expenses, rendering HSAs largely ineffective and moot to that segment of the population.
Bai, acknowledging Paragon's growing influence in her November 2024 NPR interview ("All Things Considered"), commented:
"I was, like, there's no way this institute will make any splash. But now, after three years, I think they've become such a prominent figure."
She also noted Paragon's influence on congressional members and staffers, although she later clarified that this primarily Republican members, and it should also be noted that her assessment regarding staff influence was largely speculative on her part.
While Bai may have initially underestimated Paragon's impact (she herself is politically conservative), its rise within the Trump administration cannot be ignored. This raises concerns about the potential for a shift in healthcare policy towards a more market-driven, less-regulated approach. But when it comes to pharmaceuticals, that argument falls apart because there is nothing "free" about that industry or that market. Drug companies are selling government-granted monopolies which are highly regulated, and only the distribution system is largely unregulated, and due to a lack of oversight of that, we now have middlemen in the system gaming the system for their own financial benefit at the expense of patients and employer healthcare plan sponsors alike. But the Trump administration has demonstrated a willingness to challenge at least one status quo in healthcare, as evidenced by his failed 2020 executive order ("EO") aimed at addressing PBM rebate kickbacks.
Trump's Previous Executive Order on PBM Kickbacks Never Went Into Effect
It was absolutely true that on November 20, 2020 (after losing the 2020 election), the outgoing Trump administration issued an Executive Order ("EO") to finally address (which had conveniently been ignored for 4 years) the PBM rebate kickback problem, and I was optimistic that could potentially deliver on a campaign promise to help reduce prescription drug prices for Americans.
Alas, in typical Trump fashion, the outgoing Trump administration had failed to provide 60-days' notice soliciting public comments on the proposed policy-change which was a clear violation of federal law, which meant that the incoming Biden administration faced an immediate lawsuit over the Trump Executive Order ("EO").
To avoid further litigation over process, the incoming Biden administration's Dept. of HHS simply "froze" implementation of the Trump EO for 60 days in order to comply with the law that requires public input on policy changes. But then, the PBM trade association known as the Pharmaceutical Care Management Association (PCMA) sued the U.S. Dept. of Health and Human Services over the Trump EO, and a federal judge ordered that the Trump EO must be frozen until the PCMA litigation was addressed in Court (either in a court ruling, or a settlement). The outcome of that lawsuit was still pending as it as I wrote this (the courts aren't speedy).
The previous Trump administration had also considered some other options such as banning "Most Favored Nation" pharmacy/PBM contracts and promoting "cost plus" drug spending, which could significantly impact the pharmaceutical industry and patient access to medications, only he was no longer President at the time, hence he no longer had power to do those things. However, the unpredictability of the previous Trump administration, coupled with the ongoing legal battles surrounding his 2020 EO, makes it difficult to predict any long-term consequences of these policy shifts.
One thing is certain:
The debate over PBMs, runaway healthcare costs, and the role of government intervention is far from over. The coming years will likely witness continued clashes between powerful business interests for commercial healthcare insurance company-owned PBMs and a growing chorus of voices (including from employer healthcare plan sponsors) demanding a more equitable and affordable healthcare system for more covered Americans. Given Trump's prior failures, that means that we'll basically have to watch how he executes his EOs going forward. He failed the first time, but maybe this time he'll follow the law in executing them this time around?
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