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Crain's Grand Rapids Business Brief

Crain's Grand Rapids Business

- Increased weight-loss drug use & cost control
- Michigan prescription drug cost control board
- Dialing back remote work
- U of M economic outlook

WGVU’s Patrick Center talks with Crain’s senior writer Mark Sanchez about an increase in weight-loss drug use in Michigan and how insurers are pushing cost controls.

Mark Sanchez: And it's basically, here it comes one more thing adding to the cost of health coverage. You've seen these ads on TV the last few months. They have emerged in the market the last couple of years, and they cost a little bit of money. This was an event to the folks at Advantage Benefits here in Grand Rapids held last week. Did a webinar for employers, for clients, and talking about not only weight loss drugs, but the new gene and self-therapies that have been coming on the market the last couple of years too, which are extremely expensive. What I wrote the other day is basically the weight loss drugs, they're coming and we have an obesity rate in Michigan hovering around 35%. So, there are a number of folks that could benefit from these medications to help them lose weight. 10%, 15%, 20% of their weight lowers their risk for heart disease, hypertension, and just a whole bunch of other complications that can come with obesity. The cost, there's one, Mounjaro, costs about $1,227 per month. This comes from somebody at Priority Health who also noted that another one of the drugs, Wegovy and Saxenda, if I could pronounce that, they're more than $1,600 a month. So, the whole point was employers, you need to start thinking about this. If you're in small group coverage, do you work this into your plan? If you are fully funded, self-funded, large group. How do you work this into your cost equation for your health benefits and whether insurers cover these? There are different variables depending on the type of coverage an employer buys and whether they're fully funded, self-funded, small group coverage and I don't go too deep into the story on that we posted the other day at Crain’s Grand Rapids Business but just basically, be aware for employers. Here's a new generation of drugs coming out into the market and their use is growing rapidly. There's one site when I was, I had a conversation with Dominick Pallone. He runs the Michigan Association of Health Plans that represents HMOs, about 3.5 million members. And he was noting that just Medicaid health plans, just the Medicaid population, those health plans are spending about $12 million a month now for the weight loss drugs. Which, oh, by the way, some of which are also approved to treat diabetes. That $12 million a month, that's up from zero at the start of 2022. So again, these drugs are coming onto the market. You're seeing the ads and they are here and employers need to start thinking about how they're going to handle these for coverage.

Patrick Center: And we'll stick with healthcare in particular prescription drug costs. We've seen at the national level, the Biden administration stepping in recent weeks working to curb prescription drug costs. I believe that there were 10 selected. They'll be working with the pharmaceutical companies to negotiate price. And now we're seeing a prescription drug cost review board here in the state.

Mark Sanchez: Yeah, this is an idea that Governor Whitmer proposed in her address to the legislature last week called, What's Next. Basically, you know, setting the fall agenda in Lansing and one of the ideas she floated was this idea for a Prescription Drug Affordability Board. Terms of which exactly how it would work as not quite defined right now, but again it puts more attention on the high cost of pharmaceutical prescriptions and these costs continue to rise. Your health insurers, your health plans, what they say sometimes is they're paying more now for prescription drugs and their claims than they do for hospitalizations. So, it's a growing issue. Again, you throw into the issue of the cell and gene therapies that do amazing things, but they're significantly expensive. On top of that, we saw a proposal last month, or in July, proposed by Republican Representative Curtis VanderWaal out of Luddington, who's not a guy that advocates more government intervention in the private markets. But he's got legislation out there that says, let's allow the state to enter a public-private partnership and offer $150 million grant to support the production of insulin in Michigan. A new facility or somebody could retrofit a facility to produce and sell insulin in Michigan. And that's a drug that's been on the market a long time to help diabetics control their condition. It's risen 600% in the last decade. So, that's just here a couple more examples of movements afoot here on the public sector level to try to better control the cost of prescription medications and there's a lot of data out there where people have difficulty paying for their prescriptions, paying their copays because of that, they're skipping their medication or they're instead of taking two a day they're taking one a day to make that prescription last longer. And if they've got a condition, hypertension, diabetes, they don't stay on those maintenance drugs, that condition can get out of control, lead to more complications, more complication leads to higher costs. So again, going back to what we talked about, the weight loss drugs, the cell and gene therapies and just everyday prescriptions, there's a lot of movement, not only in Michigan, but across the country to try to rein in some of these costs.

Patrick Center: We're talking with Crain’s Grand Rapids Business senior writer, Mark Sanchez. There are some office managers out there who are trying to rein in work from home or at least end the full-time remote work. What are you hearing from business leaders across the region?

Mark Sanchez: Well, yeah, this is a story that came to us from our colleagues at Crain’s in Chicago the other day. It's a story that's going to play out this fall across the country. A lot of employers are using that Labor Day as the point where, okay, we've done this for three plus years, three and a half years, let's start getting back to the office at least X number of days a week. They're perhaps using a hybrid model. And, uh, we'll see where it goes. There is a generation of folks that really like this work-at-home scenario, but now employers would like folks back in the office, collaboration, culture, mentoring of the younger generation of workers, for all those issues we've been hearing about for some time. And there's also the issue of a lot of vacant office space in this country right now with folks not going into those offices in the downtowns and or wherever folks are working these days. So, It's going to be something to really watch play out this fall to see how effective some of these requests, mandates, depending on how each employer decides to handle the situation, how many folks start filtering back to the office and how many would really prefer that work at home model.

Patrick Center: Sticking with the idea of kind of readjusting or recalibrating, this is the time of year also when the University of Michigan looks again at its economic outlook for the year and what's it telling us?

Mark Sanchez: Well, there was a couple of outlooks that the U of M put out here last week. These are the quarterly economic outlooks. One for the nation basically said, things are plugging along, expect slower growth. Maybe, maybe a recession, maybe not. The U of M outlook the other day for the US just kind of lowered the chances of a US economic recession in the coming year or so. Although you're still seeing slower growth and... might get one more interest rate hike this year and then perhaps in 2024 is the time when interest rates start coming down again. On top of that here late last week the U of M also put out its latest outlook for Michigan and it shows well we've got this issue coming up which is a UAW contract here and boy if you're from the Detroit area you've been in the state a while you know what that term means it's a contract here. So, in the latest outlook that the U of M put out, it said if indeed the UAW does call a strike against GM, Ford, Stellantis, maybe for a week, 10 days, two weeks, that's going to take a little bit of a bite out of Michigan's momentum recovering from three years ago. Basically, most of the jobs have been regained, the state's plugging along. But if we have a strike, that's going to slow things down temporarily.

Patrick Center: What's the forecast on a strike? What are you hearing?

Mark Sanchez: There are some folks that are pretty convinced, I talked to we're going to get an auto strike this year. Some folks are hopeful that somehow here in the next, what, 10 days, 9 days that the two sides can really come to an agreement and shake hands across the table and get that contract in place and avoid a strike. But you are certainly hearing a much more militant tone coming out of the UAW this year.

Patrick joined WGVU Public Media in December, 2008 after eight years of investigative reporting at Grand Rapids' WOOD-TV8 and three years at WYTV News Channel 33 in Youngstown, Ohio. As News and Public Affairs Director, Patrick manages our daily radio news operation and public interest television programming. An award-winning reporter, Patrick has won multiple Michigan Associated Press Best Reporter/Anchor awards and is a three-time Academy of Television Arts & Sciences EMMY Award winner with 14 nominations.