Civil War: healthcare edition

The formula for rising healthcare costs in the US is filled with a bunch of pointed fingers lately. One finger is being pointed at drug maker Kaléo (no, not that Kaleo) by pharmacy benefit manager Express Scripts. They’re suing Kaléo over its price hikes on a heroin/painkiller overdose treatment. According to Express Scripts, these hikes triggered price protection rebates owed to Express Scripts, which total around $14 million—most of the lawsuit. The PBM has successfully sued larger drug companies like Horizon, so Kaléo may be at a bit of a disadvantage here. Especially since Express Scripts could use the extra cash to deal with the fingers pointed at it, including one $15B lawsuit by its (soon-to-be former) largest customer, the insurance provider Anthem.

The State of Ohio vs. Drug Giants

Like this guy, Ohio is not happy with a handful of drug-makers. On Wednesday, the state filed a lawsuit stating the drug-makers “helped unleash a health care crisis that has had far-reaching financial, social, and deadly consequences in the State of Ohio.” The targets of the lawsuit are Purdue Pharma, Endo Health Solutions, Teva Pharmaceutical Industries, Johnson & Johnson, and Allergan. The reason behind the lawsuit, according to the office of state Attorney General Mike Dewine, is that “the drug companies engaged in fraudulent marketing regarding the risks and benefits of prescription opioids which fueled Ohio’s opioid epidemic.” Lawsuits including this one could shape up similarly to those that hit tobacco companies in the 90’s, which saw states win settlements of over $200 billion.

4. Pharma’s countdown to November

The election is coming! The election is coming! With Novartis’ CEO Joe Jimenez playing the role of Paul Revere (though without a horse and much less urgency), he told the Financial Times that pharma will feel the pressure from the new president’s administration. In that article, Jimenez said, “We believe that, no matter which candidate wins, we will see a more difficult pricing environment in the U.S.” He also said that Europe would certainly be affected, and drug makers “will be in trouble” if they are not quick to change. Look for companies to develop strategies in the coming months for how to deal with a sudden change in pricing models.