According to an EADV press release, the AI software demonstrated a “100% (59/59 cases identified) sensitivity for detecting melanoma—the most serious form of skin cancer.” The AI software also “correctly detected 99.5% (189/190) of all skin cancers and 92.5% (541/585) of pre-cancerous lesions.”
“Of the basal cell carcinoma cases, a single case was missed out of 190, which was later identified at a second read by a dermatologist ‘safety net.’ This further demonstrates the need to have appropriate clinical oversight of the AI,” the press release noted.
AI is being utilized more frequently within the healthcare industry to diagnose and treat a plethora of illnesses. This recent study performed by scientists in the United Kingdom demonstrates that new AI models can be used to accurately diagnose some skin cancers, but that “AI should not be used as a standalone detection tool without the support of a consultant dermatologist,” the press release noted.
“The role of AI in dermatology and the most appropriate pathway are debated,” said Kashini Andrew, MBBS, MSc (above), Specialist Registrar at University Hospitals Birmingham NHS Foundation Trust. “Further research with appropriate clinical oversight may allow the deployment of AI as a triage tool. However, any pathway must demonstrate cost-effectiveness, and AI is currently not a stand-alone tool in dermatology. Our data shows the great promise of AI in future provision of healthcare.” Clinical laboratories and dermatopathologists in the United States will want to watch the further development of this AI application. (Photo copyright: LinkedIn.)
How the NHS Scientists Conducted Their Study
Researchers tested their algorithm for almost three years to determine its ability to detect cancerous and pre-cancerous growths. A group of dermatologists and medical photographers entered patient information into their algorithm and trained it how to detect abnormalities. The collected data came from 22,356 patients with suspected skin cancers and included photos of known cancers.
The scientists then repeatedly recalibrated the software to ensure it could distinguish between non-cancerous lesions and potential cancers or malignancies. Dermatologists then reviewed the final data from the algorithm and compared it to diagnoses from health professionals.
“This study has demonstrated how AI is rapidly improving and learning, with the high accuracy directly attributable to improvements in AI training techniques and the quality of data used to train the AI,” said Kashini Andrew, MBBS, MSc, Specialist Registrar at University Hospitals Birmingham NHS Foundation Trust, and co-author of the study, in EADV press release.
Freeing Up Physician Time
The EADV Congress where the NHS researchers presented their findings took place in October in Berlin. The first model of their AI software was tested in 2021 and that version was able to detect:
85.9% (195 out of 227) of melanoma cases,
83.8% (903 out of 1078) of all skin cancers, and
54.1% (496 out of 917) of pre-cancerous lesions.
After fine-tuning, the latest version of the algorithm was even more promising, with results that included the detection of:
100% (59 out of 59) cases of melanoma,
99.5% (189 out of 190) of all skin cancers, and
92.5% (541 out of 585) pre-cancerous lesions.
“The latest version of the software has saved over 1,000 face-to-face consultations in the secondary care setting between April 2022 and January 2023, freeing up more time for patients that need urgent attention,” Andrew said in the press release.
Still, the researchers admit that AI should not be used as the only detection method for skin cancers.
“We would like to stress that AI should not be used as a standalone tool in skin cancer detection and that AI is not a substitute for consultant dermatologists,” stated Irshad Zaki, B Med Sci (Hons), Consultant Dermatologist at University Hospitals Birmingham NHS Foundation Trust and one of the authors of the study, in the press release.
“The role of AI in dermatology and the most appropriate pathway are debated. Further research with appropriate clinical oversight may allow the deployment of AI as a triage tool,” said Andrew in the press release. “However, any pathway must demonstrate cost-effectiveness, and AI is currently not a stand-alone tool in dermatology. Our data shows the great promise of AI in future provision of healthcare.”
Two People in the US Die of Skin Cancer Every Hour
According to the Skin Cancer Foundation, skin cancer is the most common cancer in the United States as well as the rest of the world. More people in the US are diagnosed with skin cancer every year than all other cancers combined.
When detected early, the five-year survival rate for melanoma is 99%, but more than two people in the US die of skin cancer every hour. At least one in five Americans will develop skin cancer by the age of 70 and more than 9,500 people are diagnosed with the disease every day in the US.
The annual cost of treating skin cancers in the United States is estimated at $8.1 billion annually, with approximately $3.3 billion of that amount being for melanoma and the remaining $4.8 billion for non-melanoma skin cancers.
More research is needed before University Hospitals Birmingham’s new AI model can be used clinically in the diagnoses of skin cancers. However, its level of accuracy is unprecedented in AI diagnostics. This is a noteworthy step forward in the field of AI for diagnostic purposes that can be used by clinical laboratories and dermatopathologists.
Clinical laboratories and pathology groups should be on the alert to this new digital threat; telehealth sessions and video conferencing calls particularly vulnerable to acoustic AI attacks
Banks may be the first to get hit by a new form of hacking because of all the money they hold in deposit accounts, but experts say healthcare providers—including medical laboratories—are comparably lucrative targets because of the value of patient data. The point of this hacking spear is artificial intelligence (AI) with increased capabilities to penetrate digital defenses.
AI is developing rapidly. Are healthcare organizations keeping up? The hackers sure are. An article from GoBankingRates titled, “How Hackers Are Using AI to Steal Your Bank Account Password,” reveals startling new AI capabilities that could enable bad actors to compromise information technology (IT) security and steal from customers’ accounts.
Though the article covers how the AI could conduct cyberattacks on bank information, similar techniques can be employed to gain access to patients’ protected health information (PHI) and clinical laboratory databases as well, putting all healthcare consumers at risk.
The new AI cyberattack employs an acoustic Side Channel Attack (SCA). An SCA is an attack enabled by leakage of information from a physical computer system. The “acoustic” SCA listens to keystrokes through a computer’s microphone to guess a password with 95% accuracy.
“With recent developments in deep learning, the ubiquity of microphones and the rise in online services via personal devices, acoustic side channel attacks present a greater threat to keyboards than ever,” wrote UK study authors Joshua Harrison, MEng, Durham University; Ehsan Toreini, University of Surrey; and Maryam Mehrnezhad, PhD, University of London.
Hackers could be recording keystrokes during video conferencing calls as well, where an accuracy of 93% is achievable, the authors added.
This nefarious technological advance could spell trouble for healthcare security. Using acoustic SCA attacks, busy healthcare facilities, clinical laboratories, and telehealth appointments could all be potentially compromised.
“The ubiquity of keyboard acoustic emanations makes them not only a readily available attack vector, but also prompts victims to underestimate (and therefore not try to hide) their output,” wrote Joshua Harrison, MEng (above), and his team in their IEEE Xplore paper. “For example, when typing a password, people will regularly hide their screen but will do little to obfuscate their keyboard’s sound.” Since computer keyboards and microphones in healthcare settings like hospitals and clinical laboratories are completely ubiquitous, the risk that this AI technology will be used to invade and steal patients’ protected health information is high. (Photo copyright: CNBC.)
Why Do Hackers Target Healthcare?
Ransomware attacks in healthcare are costly and dangerous. According to InstaMed, a healthcare payments and billing company owned by J.P. Morgan, healthcare data breaches increased to 29.5% in 2021 costing over $9 million. And beyond the financial implications, these attacks put sensitive patient data at risk.
Healthcare can be seen as one of the most desirable markets for hackers seeking sensitive information. As InstaMed points out, credit card hacks are usually quickly figured out and stopped. However, “medical records can contain multiple pieces of personally identifiable information. Additionally, breaches that expose this type of data typically take longer to uncover and are harder for an organization to determine in magnitude.”
With AI advancing at such a high rate, healthcare organizations may be unable to adapt older network systems quickly—leaving them vulnerable.
“Legacy devices have been an issue for a while now,” Alexandra Murdoch, medical data analyst at GlobalData PLC, told Medical Device Network, “Usually big medical devices, such as imaging equipment or MRI machines are really expensive and so hospitals do not replace them often. So as a result, we have in the network these old devices that can’t really be updated, and because they can’t be updated, they can’t be protected.”
But telehealth, according to the UK researchers, may also be one way hackers get past safeguards and into critical hospital systems.
“When trained on keystrokes recorded using the video-conferencing software Zoom, an accuracy of 93% was achieved, a new best for the medium. Our results prove the practicality of these side channel attacks via off-the-shelf equipment and algorithms,” the UK researchers wrote in IEEE Xplore.
“[AI] has worrying implications for the medical industry, as more and more appointments go virtual, the implications of deepfakes is a bit concerning if you only interact with a doctor over a Teams or a Zoom call,” David Higgins, Senior Director at information security company CyberArk, told Medical Device Network.
Higgins elaborated on why healthcare is a highly targeted industry for hackers.
“For a credit card record, you are looking at a cost of one to two dollars, but for a medical record, you are talking much more information because the gain for the purposes of social engineering becomes very lucrative. It’s so much easier to launch a ransomware attack, you don’t even need to be a coder, you can just buy ransomware off of the dark web and use it.”
Steps Healthcare Organizations Should Take to Prevent Cyberattacks
Hackers will do whatever they can to get their hands on medical records because stealing them is so lucrative. And this may only be the beginning, Higgins noted.
“I don’t think we are going to see a slowdown in attacks. What we are starting to see is that techniques to make that initial intrusion are becoming more sophisticated and more targeted,” he told Medical Device Network. “Now with things like AI coming into the mix, it’s going to become much harder for the day-to-day individual to spot a malicious email. Generative AI is going to fuel more of that ransomware and sadly it’s going to make it easier for more people to get past that first intrusion stage.”
To combat these attacks patient data needs to be encrypted, devices updated, and medical staff well-trained to spot cyberattacks before they get out of hand. These SCA attacks on bank accounts could be easily transferable to attacks on healthcare organizations’ patient records.
Clinical laboratories, anatomic pathology groups, and other healthcare facilities would be wise to invest in cybersecurity, training for workers, and updated technology. The hackers are going to stay on top of the technology, healthcare leaders need to be one step ahead of them.
This pioneering innovation is consistent with the trend to bring medical services to places more convenient for consumers and was spurred by a study which showed men twice as likely to have heart attacks than women
Patient-facing healthcare gets a boost with this novel program to offer a diagnostic service in locations frequented by men. In an attempt to decrease heart attacks in the UK, the country’s National Health Service (NHS) now employs a novel approach to prevention—bringing blood pressure screenings to the public in barbershops.
This is yet another example of moving diagnostics services out of traditional healthcare settings and reaching people in places that they visit in their daily lives. True, this is a blood pressure test. But once the service is established, it should be easy to collect other types of clinical laboratory specimens at barbershops as well. And if this approach enables healthcare policy makers to reach a population that needs further diagnostic tests—and it’s economically feasible—that may encourage adoption of this approach for other types of health screenings.
According to The Guardian, the screenings will be available at “barbershops, churches, mosques, community centers, and dominoes clubs.” The intention is to ensure screenings are more accessible, to educate the public, and to encourage lifestyle changes that lead to prevention.
This consumer-directed approach to healthcare by the NHS appears to be making a difference. The new screening locations already show promise. In 2023, efforts brought in 150,000 community-based blood pressure screenings by August. That more than doubled the previous year’s 58,000 that were performed by May, The Guardian noted.
“With the number of people living with major illnesses including heart disease and other cardiovascular conditions set to grow substantially over the coming years, it has never been more important to put in place preventive measures like easy-to-access blood pressure checks that can pick up the early signs and risks,” said David Webb (above), Chief Pharmaceutical Officer for England, NHS England, in a news release. Should this program succeed, it’s likely other types of clinical laboratory test specimens could also be collected in barbershops and other convenient locations. (Photo copyright: Paul Stuart/The Pharmaceutical Journal.)
Importance of Screening
According to the UK’s Health Foundation, more than 9.1 million people will have a major illness by 2040, and figures show an increase of 2.5 million from 2019 reports. These figures are “why prevention and early intervention tools such as community blood pressure checks are key priorities for the NHS,” the NHS news release states.
“Having high blood pressure raises the risk of a heart attack, but many men and women remain unaware they may be affected because typically there are no symptoms,” The Guardian reported. “Every year there are 100,000 NHS hospital admissions due to heart attacks—one every five minutes.”
The NHS’ moves were spurred by recent findings announced at the European Society of Cardiology’s 2023 annual meeting. The world’s largest heart conference showcased a 22-year-long study examining the gender-specific risks of cardiovascular diseases. The results clearly showed that men were twice as likely to experience heart attacks and peripheral artery disease than women.
The University of Aberdeen conducted the study which ran from 1993-2018 and followed 20,000 individuals over the age of 40. While researchers noted many factors—such as ethnicity, body mass index (BMI), physical activity, deprivation, consumption of alcohol, and cigarette smoke—a clear defining line landed between male and female participants, The Guardian reported. Additionally,“Men are also more likely to experience a heart attack at a younger age than women.”
And, according to the study, while cardiovascular disease was higher for men during their entire lifetime, “sex differences were most pronounced for myocardial infarction and peripheral artery disease, followed by atrial fibrillation, heart failure, and cardiovascular mortality,” The Guardian reported, adding, “Men also have a 50% higher risk of heart failure and atrial fibrillation. The study discovered that men have a 42% higher risk of dying from cardiovascular disease. The research did not look at why.”
Education Part of Prevention
“Men should start looking early at-risk factors, like obesity, lack of exercise, smoking, alcohol consumption, and reach out to their GP to get those things addressed. The earlier the better. There’s no harm in minimizing your cardiovascular risk,” Tiberiu Pana, MRes, lead researcher and honorary research fellow at the University of Aberdeen, told The Guardian. Pana is also a junior doctor in the NHS and focuses on cardiovascular epidemiology and the brain-heart interactions.
“Coronary heart disease is the most common killer of men. There’s never been a better time to get physically active and replace that pub session with an extra session in the gym,” cardiologist Sonya Babu-Narayan, MBBS, Associate Medical Director at the British Heart Foundation, told The Guardian. Babu-Narayan is also a consultant cardiologist at Royal Brompton Hospital.
Women, however, are not exempt from the risk of heart disease.
“If we consider the effects of heart disease over a lifetime, we need to remember that it costs lives for both men and women,” Babu-Narayan said. “With 30,000 women in the UK admitted to hospital with a heart attack each year, it is vital to dismantle the dogma that heart attacks are the preserve of men. Regardless of gender, cardiovascular disease is the world’s biggest killer and there are steps everyone can take to reduce their risks.”
In addition to the aforementioned community locations for screenings, NHS has launched a few other approaches to meet patients on their own turf.
A mobile blood pressure service named How’s Thi Ticker in Barnsley, South Yorkshire, “travels around local neighborhoods including to barber shops, supermarkets, and community centers, seeing more than a third of people referred to pharmacists with high blood pressure—freeing up GPs and catching early signs of heart attack and stroke risk,” according to the NHS news release.
Future Showing Further Promise
As the process continues, NHS expects to prevent 1,350 cardiovascular events every year, and expects to see 2.5 million more blood pressure checks performed in the community in England as a result of the endeavor, The Guardian noted.
One can only imagine how far this trend can go. Clinical laboratory managers and pathologists can expect healthcare policy makers in the UK to continue their efforts to bring needed diagnostic testing to underserved populations in accessible ways. This should be a win-win financially and in improving the health of the country’s population.
Nationwide, hospital losses are in the billions of dollars, which affects access to medical care including clinical laboratory testing
Hospitals and health systems across the United States continue to report substantial financial losses. At some institutions, this might severely restrict access to physicians and clinical laboratory testing for patients in those areas. The latest state to announce its hospitals were in trouble is Minnesota. The Minnesota Hospital Association (MHA) announced its hospitals are in “financial crisis” revealing that the state’s health systems experience hundreds of millions of dollars in operating losses annually.
The MHA stated that two out of three surveyed hospitals in Minnesota reported losing money in the cumulative amount of more than $400 million during the first half of 2023, KARE 11 reported. The MHA surveyed more than 70 health system members which represented facilities of all sizes and in all geographical regions of the state.
Rahul Koranne, MD, President and CEO of MHA told KARE 11 that part of the problem is that a larger proportion of patients rely on federal programs such as Medicare and Medicaid to pay hospital costs. Those programs provide lower reimbursement rates when compared to private insurers. In some facilities, almost 75% of patients are on one of these government programs.
“Those reimbursements, or payments, are fixed. So, we can’t raise prices. These two programs are paying significantly below the cost of providing care to our patients,” he noted. “So, if you have 70% of your patients covered by these governmental programs, we can’t raise prices, and they’re paying you below the cost of care—that’s what causes [the problem].”
He went on to state that workforce staffing represents a significant challenge for hospitals and urged the state legislature to address the needs of health professionals and facilities.
“We need to really resource it in this upcoming session and many sessions to come, so that we can have workers and staff we need,” Koranne said. “If we don’t have the money, and if we don’t have the workers, we will not be providing care and that would be sad.”
“This is a pretty grave state and, I would say, quite a crisis,” Rahul Koranne, MD (above), President and CEO of the Minnesota Hospital Association, told KARE 11. “Our not-for-profit hospitals and healthcare systems are hanging dangerously from this cliff and they’re getting tired.” Access to medical laboratory testing can be greatly affected by hospital financial losses. (Photo copyright: Twin Cities Business.)
Other US Healthcare Systems in Crisis as Well
Minnesota is not the only state with healthcare systems in financial crisis. Last year, the Washington State Hospital Association (WSHA) announced that hospitals in that state reported cumulative losses of $2 billion for 2022. Cassie Sauer, President and CEO of WSHA told the media that the massive deficits are “clear and incredibly concerning” to the state’s healthcare leaders.
In “Hospitals, Pharmacies Struggle to Be Profitable,” we reported that the WSHA survey determined that the state’s hospitals suffered collective operating losses of $750 million during the first six months of 2023.
“The financial losses that our hospitals are experiencing continue to be enormous,” Sauer told The Seattle Times. “Revenues simply are not keeping up with rapidly escalating costs. It’s most concerning as these large losses are putting patient care at risk in many communities across the state.”
The WSHA findings were based on a survey of 81 acute-care hospitals that represented about 98% of the state’s hospital beds. Of those facilities, 69 reported losing money mostly due to rising costs for supplies, labor, and other expenses as well as the need for longer hospital stays due to more complicated care and a larger percentage of patients on government programs, which offer lower reimbursement rates for care.
“When hospitals are not financially viable and over time sustain heavy losses, you must either increase revenue or reduce healthcare services,” Chelene Whiteaker, Senior Vice President, Government Affairs at WSHA, told The Seattle Times. “Reducing healthcare services is an option nobody wants on the table. So, that leaves increasing revenues.”
The graphic above from the Center for Healthcare Quality and Payment Reform (CHQPR) shows the number and location of rural hospitals in America that are at “immediate” risk of closure. The number of hospitals simply “at risk” of closure is substantially higher. Patients who depend on these hospitals would lose access to critical healthcare services including clinical laboratory testing. (Graphic copyright: Center for Healthcare Quality and Payment Reform.)
Becker’s Hospital Review reported last year that many hospitals across the country reported substantial losses in 2022. Three of the hospital systems in that article reported losses in the billions. They were:
In another article, Becker’s reported that 72 hospitals across the US closed departments or ended services in 2023. These cuts included the shuttering of health and urgent care clinics, the closure of outpatient cancer and pulmonary clinics, the reduction of certain surgical services and behavioral health services, and the ending of home healthcare services.
Some states are taking measures to prevent further hospital closures. But is it too late? In “California Doles Out $300 Million in No-Interest Loans to Save its Financially Struggling Hospitals,” The Dark Report’s sister publication Dark Daily covered how that state had launched an interest-free loan program to ensure local communities have access to community hospitals, their physicians, and clinical laboratories. No report on how many hospitals have been temporarily saved from closing thanks to this program.
If US hospitals continue to lose money at this rate, access to critical care—including clinical laboratory and anatomic pathology services—could be further restricted and facilities closed. These actions may also result in increased staff layoffs and have an even greater effect on patient care in Minnesota, Washington State, and throughout the US.
Growth of the middleman company is a sign of increased credibility and acceptance among its client organizations
There’s a new category of player in the clinical laboratory testing industry. It is the “middleman” company. One high-profile example of a middleman company in diagnostics is the company ixlayer of San Francisco, which has a novel plan for growth.
The software developer provides cloud-based diagnostic testing platforms to retailers, health plans, and biopharma companies. Medical laboratory tests are not processed by ixlayer, however, but are instead sent to independent CLIA-certified clinical labs for completion and results reporting.
Thus, ixlayer acts as a third-party “middleman” in the lab testing chain.
Ixlayer recently debuted as number 1,418 on the 2023 Inc. 5000 list of fastest-growing private companies in the US, according to a company news release. Might this signal a dynamic and expanding clinical laboratory middleman sector?
There are a number of other established middleman companies doing this on the web as well, including:
Produced by Inc. Business Media, the Inc. 5000 list is based on data analysis of the fastest growing private businesses in the US. Ixlayer reportedly grew its 2023 revenue 100% year-over-year.
“To be selected for the Inc. 5000 list is an honor that validates the value we deliver while enabling greater access to care for all,” said Pouria Sanae (above), co-founder and CEO of ixlayer. “We’ve developed a platform that powers millions of diagnostic tests each year and serves as the backbone of thousands of health testing programs for trusted health brands, healthcare delivery organizations, payers, and life sciences companies. I’m excited about the future as we redefine and simplify the diagnostic laboratory testing ecosystem.” (Photo copyright: ixlayer.)
Ixlayer Works with Retailers, Insurers, Biopharma, and Clinical Labs
Ixlayer “facilitates” tests by working with industry partners and clinical laboratories, Managed Healthcare Executive explained.
One such relationship is with retailer CVS, Fierce Healthcare reported. Ixlayer provides the cloud-based diagnostics platform, at-home sample collection kits, and coordination of testing services for some of the pharmacy company’s at-home testing products. They include:
“With nearly 70% of medical decisions dependent on lab testing, regular diagnostic testing is a cornerstone of improving health and wellness,” Pouria Sanae, co-founder and CEO of ixlayer, told Drug Store News. “At-home testing enables people to proactively take control of their health, on their own schedule, in the privacy of their own home and on a regular basis. Our mission of creating a healthier world through more accessible, affordable, and easy health testing requires systemic changes and buy-in from key stakeholders and partners.”
Ixlayer directs specimens to independent labs that perform the tests and report results to consumers via an online portal.
“Founded in 2018, ixlayer initially focused on remote lab testing for Alzheimer’s disease patients. The company now offers thousands of white-labeled, at-home, and onsite health tests ranging from women’s wellness to sexually transmitted diseases and chronic condition management,” the news release notes.
“We’re thinking of it more from the perspective of: How do we infiltrate this infrastructure into our whole healthcare ecosystem? How do we let traditional providers run their programs the way they want to?” Alecia Pritchett, ixlayer Chief Growth Officer, told Managed Healthcare Executive.
Ixlayer “is not a lab,” Managed Healthcare Executive explained. “It describes itself as a platform. Instead of performing its own lab tests, it connects providers and retailers to accredited laboratory partners. Instead of sending out its own team of phlebotomists to collect blood samples, the company coordinates with mobile phlebotomy firms.”
“This comprehensive data visualization solution provides a more insightful analysis of testing performance data, empowering health plans, retailers, and biopharma organizations to monitor and manage progress in real-time effectively. With this actionable intelligence, decision-makers can focus on addressing gaps in care, accelerating access to critical drug studies, and promoting greater health equity to improve clinical and quality outcomes and economics across the healthcare ecosystem,” said David Yu, Chief Product Officer at ixlayer, in a news release.
Any Lab Test Now Also Makes Inc.’s 5000 List
Also making the 2023 Inc. 5000 list is Any Lab Test Now, an Alpharetta, Ga.-headquartered laboratory franchise that was founded in 2007. Any Lab Test Now is another form of middleman company which bills itself as the nation’s first direct access lab testing service with 200 locations. This is Any Lab Test Now’s second consecutive year on the list, according to a news release.
Unlike ixlayer, Any Lab Test Now’s business model features independently owned and operated locations around the US. Customers go online to choose a testing location, pay for tests, and schedule an appointment. Tests include:
Allied Market Research reported that the global at-home testing market is expected to grow by about 10.5% annually from 2022 to 2031, when it will reach $45.5 billion.
Another middleman company offering at-home tests is Everlywell of Austin, Texas. Other middleman companies that enable consumers to order tests online and then visit a local clinical laboratory for specimen collection include Testing.com and Walk-In-Lab.com.
Ever since the COVID-19 pandemic, demand for at-home sample collection testing has grown steadily. Dark Daily has covered this in numerous ebriefs. That middleman companies are showing up on the Inc. 5000 list of fastest growing companies indicates that the middleman sector of the clinical laboratory testing industry is growing as well.
Coalition is pushing for action among 43 pharmaceutical pricing bills currently before Congress
Increased transparency that lets consumers see prices charged by hospitals, physicians, and clinical laboratories in advance of service is an important goal of healthcare policymakers and self-insured employers. But greater transparency has yet to affect how prescription drugs are first priced, marked up, and charged to the final purchasers.
Now a group within the pharmaceutical industry has issued a call for greater transparency in the pricing of prescription drugs. A number of smaller Pharmacy Benefit Managers (PBMs) have formed a coalition against the often confusing and overly complex pricing of prescription drugs in hopes that their efforts will give healthcare consumers more clarity when it comes to comparison shopping for pharmaceuticals.
Calling itself Transparency-Rx, the newly-formed coalition “will push for changes to the PBM model … [such as] a ban on spread pricing as well as reforms to the rebate model that include the impact of group purchasing organizations,” Fierce Healthcare reported.
Traditional PBMs act as a third-party to connect pharmacies and drug companies with healthcare payers. This new alliance of “Transparent” PBMs claims that traditional PBMs need to be reformed, and that is what Transparency-Rx is advocating.
According to a press release, Transparency-Rx is working with both political parties in Congress and the current administration to bring “critical reforms to a costly and misaligned drug pricing market.”
The group is seeking:
A 100% pass-through model.
A ban on spread pricing.
National reporting and disclosure requirements for the industry and its consultants.
Delinking provisions that will require PBMs to be paid by a flat, disclosed fee.
Technology that empowers actionable data and information to be shared with patients, plans, pharmacists, and physicians, throughout the drug supply-chain.
“In an industry that has opposed meaningful drug reform, Transparency-Rx seeks to inject common-sense, change, and clarity into a complex environment,” the coalition stated in its press release.
This is consistent with the wider goal of healthcare policymakers to achieve fully-transparent prices for all healthcare services so that buyers—self-insured employers, patients, and others—can easily compare prices of prescription drugs.
“The notion that transparency is a dangerous idea, to us is sort of a little absurd—it’s already working,” Transparency-Rx founder, President, and Managing Director Joseph Shields, JD, (above) told Fierce Healthcare. “The question is, can Congress help empower it and take it to scale for a variety of different plans?” (Photo copyright: Transparency-Rx.)
Transparency-Rx Members
In a press release announcing S.4293—the Pharmacy Benefit Manager Transparency Act of 2022—Senator Chuck Grassley stated, “Today, three PBMs control nearly 80% of the prescription drug market. They serve as middlemen, managing every aspect of the prescription drug benefits process for health insurance companies, self-insured employers, unions, and government programs. They operate out of the view of regulators and consumers—setting prescription costs, deciding what drugs are covered by insurance plans and how they are dispensed—pocketing unknown sums that might otherwise be passed along as savings to consumers and undercutting local independent pharmacies. This lack of transparency makes it impossible to fully understand if and how PBMs might be manipulating the prescription drug market to increase profits and drive-up drug costs for consumers.”
The act was reintroduced as S.127 to the next Congress in 2023.
According to PharmaNewsIntelligence, “Vertical integration within the market has resulted in most PBMs being owned by the largest insurers in the country. The ACMA [Accreditation Council for Medical Affairs] estimates that CVS Caremark, Express Scripts, and OptumRx control approximately 89% of the market share.”
Transparency-Rx represents more than 14 million people in all 50 states, the press release notes. Founding transparent PBM members include:
“The founding members are companies that are looking to have a voice in the drug pricing debates and reform efforts,” Joseph Shields, JD, founder, President, and Managing Director of Transparency-Rx, told Fierce Healthcare.
Transparency-Rx’s efforts will “likely ruffle feathers at the industry’s biggest companies,” Fierce Healthcare surmised.
“As a counterweight to the status-quo, Transparency-Rx confronts stale and dated ideas, takes on corporate monopolies, and especially big PBMs and the insurance lobby,” Transparency-Rx states on its website. “For too long, these special interests have been the lone and loudest voice fighting against real policy changes on drug pricing and health care, protecting a broken system which hides profits and inflates prescription costs, harming the interests of diverse communities, working families, and seniors.”
Transparent PBMs Focus on Congress
“Congress should know patients, employers, and plans can thrive in a transparent, competitive, and efficient PBM market,” LeAnn Boyd, PharmD, CEO and founding partner at Liviniti, told Fierce Healthcare. “We embrace critical reforms to a costly and misaligned drug pricing market. In fact, most of these reforms are already reflected in the business and innovations of transparent PBMs.”
Clinical laboratory managers and pathologists may be surprised to learn that 43 bills are currently pending in Congress. Each of these bills focuses on changing the prescription pricing policy for both public and commercial healthcare sectors. The number of pending bills on this topic signals that many in Congress consider the long-standing and complex pricing structure of prescription drugs to be a major issue that needs a solution.
“The coalition is working with lawmakers on both sides of the aisle as well as with the Biden administration, according to the announcement,” Fierce Healthcare reported.
“Just as transparency offers a better way to managing prescription drug benefits, Transparency-Rx represents a step forward to sound policy solutions, galvanizing true affordable prices,” Transparency-Rx claims.
“We’re not naive in terms of where we are in the conversation. We’re looking to scale up and play a meaningful role,” Shields told Fierce Healthcare.
Transparency-Rx’s progress is worth following because it’s a group of smaller PBMs forming a coalition to advocate for more transparency in the prices of prescription drugs. Currently, it’s nearly impossible to understand the way drugs are priced and how rebates are passed along the reimbursement chain. That complexity is what is causing transparent PBMs to organize.
How big is this problem? For 2022, prescription drug spending was $405.5 billion, according to government data. That is about four times the amount spent annually in the United States for clinical laboratory and anatomic pathology testing.
