It’s hard to believe it’s already time for the release of our Six-Month Recap, where we take an in-depth look at how the top March Healthcare Classic trends have been shaping the industry over the year. This year, the line-up was especially compelling, leading to fierce competition and tenacious wins among the powerhouse trends. The trends that landed a spot in the finals are: Lasting Effects of GLP1’s (8), Evolution of Medicare Advantage (1), Expansion of Self Care (8), and Focus on Women’s Health (5). Impressively, these trends continue to secure headlining news. Keep reading to discover how the industry is responding to them.
If you missed the Three-Month Recap, catch up here.
2024 Champion: Lasting Effects of GLP-1’s (8)
Lasting Effects of GLP1’s (8)—the 2024 Champion—continues to command significant attention across the industry from patients, payers, clinicians, and employers alike. While it made its first play this year, there is no lack of conversation surrounding this winning trend. GLP1’s (Glucagon-like peptide-1), known by brand names such as Ozempic and Wegovy, are a class of prescription drugs typically used to treat Type 2 Diabetes and obesity.
A major evolvement is the route of administration for the drug. Previously, GLP-1’s have been administered solely via needles, and injected into the patient weekly. However, there may be other options entering the market soon. Clinical trials are being conducted on over a dozen weight loss pills. These pills contain a form of semaglutide, the active ingredient in injectables like Ozempic. Some of the pills are currently in their third and final rounds of testing. However, it is unknown whether the drug manufacturer, Novo Nordisk, has filed for approval with the Food and Drug Administration (FDA). As these clinical trials progress, the weight loss drug market expects the introduction of 16 new drugs by 2029. Projections indicate the market for obesity treatments will reach an astounding $200B by 2031. As the competition for market share intensifies over the coming year, consumer demand will likely see a steady rise.
Even with rapid market expansion, price has been a barrier to entry. Employers and payers remain hesitant to cover these high-cost medications, with brands like Ozempic exceeding $10,000 annually for each patient. However, several factors could contribute to lower prices in the future. GLP-1 manufacturers are offering significant discounts to incentivize payers and employers to include these popular treatments in their coverage plans. Earlier this year, Eli Lilly launched a website that allows patients to order GLP-1’s directly from the manufacturer, and it priced Zepbound 20% lower than Novo Nordisk’s offerings. In response to this competitive pricing, Novo Nordisk increased its rebates to maintain market share.
As pricing strategies evolve, healthcare companies are eager to identify opportunities in the booming market. Some are developing innovative solutions to improve access and remove information barriers. In August, direct-to-consumer health startup, Ro, launched a free tool to help consumers determine if their insurance covers GLP-1’s. According to data provided by Ro, over half of users’ health insurance plans cover these drugs. Ro hopes to provide transparency to consumers, allowing them to make informed decisions on their weight loss journeys.
Despite these positive developments, the GLP-1 market still faces significant issues including drug shortages and bottlenecks in the supply chain. These access issues, coupled with soaring consumer demand, raise questions as to whether the drugs should be prioritized for patients living with Type 2 Diabetes. Since 2011, approximately 1 million new users of GLP-1 have been identified. Among those, the rate of users without Type 2 Diabetes doubled. For context, in 2018, 90% of semaglutide-based drug users were patients with Type 2 Diabetes. In 2023, this percentage dropped to 58%, reflecting a surge in the drugs being used off-label for weight loss.
The anticipated release of weight loss pills may help to mitigate the current shortages of GLP-1 injectibles. In the meantime, experts are closely monitoring whether government agencies and payers will intervene to ensure patients with Type 2 Diabetes receive priority access to these drugs.
Keep an eye on our Champion to discover if it will earn a spot as a holdover trend in the 2025 tournament. In the meantime, GLP-1’s are poised to continue driving advancements in clinical treatments while creating new opportunities in the pharmaceutical sector.
Top Two Trend: Evolution of Medicare Advantage (1)
Evolution of Medicare Advantage (1), a long-standing Selection Committee favorite, was the runner-up in this year’s tournament.
Previously, we highlighted tensions between providers and Medicare Advantage (MA) insurers. These tensions are expected to continue rising. Among public contract disputes since 2022, approximately 50% have involved MA plans. Additionally, in the second quarter of this year, 75% of public contract disputes involved MA plans. These battles are resulting in fractured relationships between health systems and MA plans. In September, Essentia Health announced it would no longer be an in-network provider for UnitedHealthcare and Humana MA plans, effective in 2025. However, this is not a unique occurrence. Modern Healthcare highlighted five other examples of large health systems opting out of major MA networks.
In the Three-Month Recap, we discussed the plans of CVS Health and Humana to scale back their MA plan benefits and geographic presence. At the time, it was unclear how those decisions would impact the broader MA landscape. Forecasts now indicate that Humana will lose a few hundred thousand MA members next year. While this is a staggering number, financial projections expect the large insurer to yield a margin increase of 3% on its MA business—currently at break even.
The challenges facing the MA sector stem from several industry pressures, including increased regulations from CMS, smaller base payments, and rising healthcare costs. Many hospitals have reported that MA insurers are denying claims, paying less than what was billed, or not authorizing care in a timely way. In light of these allegations, the Office of Inspector General (OIG) announced its intentions to audit MA plans in June.
In response, the insurance industry is launching a seven-figure lobbying campaign to emphasize the importance of MA. This includes digital ads, social media campaigns, and encouraging older adults to share their positive MA experiences with policymakers. While this commitment of significant dollars to lobbying is not a new tactic, it is uncertain whether it will counter negative press including fraud allegations and prior authorization denials.
Many of the disputes involve UnitedHealthcare and Humana; combined, these organizations account for nearly half of all MA enrollees. This concentration highlights the vulnerability of many beneficiaries who rely on these insurers to access healthcare services. Amidst these industry tensions, it is important to recognize the impact these changes will have on MA beneficiaries. With fewer in-network providers and reduced plan benefits, access to care becomes more difficult. Looking ahead, the Congressional Budget Office projects that MA beneficiaries will encompass 64% of the entire Medicare market by 2034. Currently, MA beneficiaries encompass 54% of the market, while traditional Medicare enrollees hold 46%. As more individuals transition to MA, the impact of these changes will be felt by an increasing number of beneficiaries—making it essential to address these challenges.
As competition intensifies, MA plans must adapt to beneficiaries’ needs. Stability in benefits will be a top priority for beneficiaries when choosing a plan. To differentiate, MA plans need to offer exceptional service quality and ensure effectiveness. Despite major plans downsizing their market presence, a strong emphasis on quality and comprehensive offerings will be crucial for attracting and keeping members.
As the MA sector grapples with increased tensions, regulatory pressures, and competitive dynamics, consumers are in a unique position with more influence than ever before. To maintain their market position, MA plans need to make a crucial shift toward prioritizing and meeting beneficiaries’ needs.
Top Four Trend: Expansion of Self Care (8)
Expansion of Self Care (8) was a newcomer trend that captured the attention of the Selection Committee and earned a Top Four spot. While this trend may be progressing more gradually, the last few months alone have seen notable advancements in self-testing.
Previously, we discussed a new self-test for the human papillomavirus (HPV), which was approved by the FDA in May. The test, produced by Becton, Dickinson and Company (BD), allows patients to take their own sample as an alternative to a pelvic exam completed by a doctor. However, the tests are for “clinical use” meaning they will be completed only in a doctor’s office, clinic, or other healthcare setting. The tests arrived at clinics in late September and are now available to patients. Given that HPV is the most common sexually transmitted infection, with over 42 million cases annually, BD aims to enhance access to crucial testing, particularly for those in medically underserved areas.
Other advancements include the first self-test for hepatitis C virus, which is now prequalified by the World Health Organization (WHO). Despite effective antiviral therapies, limited access to testing contributes to many complications including chronic infection and liver damage. The WHO intends for the tests to remove obstacles for patients and minimize the disease burden worldwide.
With the rise of self-testing, the WHO also released new guidance for countries to implement self-care. The guidance covers best practices for interventions such as “medicines, diagnostic and monitoring devices and digital tools.” WHO executives emphasize the critical need to provide accurate and accessible information to those who may be unfamiliar with self-care options.
As self-care continues to infiltrate the healthcare sector, it will be interesting to observe its impact on health equity—creating new pathways to deliver care to underserved communities.
Focus on Women’s Health (5)
Focus on Women’s Health (5), a newcomer to the Classic this year, demonstrated a strong performance by landing a spot in the semi-finals. The win foreshadowed several key advancements in care tailored to meet women’s needs.
In July, the Biden-Harris administration announced $27.5 in funding to enhance behavioral health for women. Specifically, the funds will support access to providers, focusing on mental health conditions, substance use, and gender-based violence. The funds were allocated to the Community-Based Maternal Behavioral Health Services Program ($15M) and the Women’s Behavioral Health Technical Assistance Center ($12.5M).
Advancements are also occurring in the private sector. Earlier this year, Midi Health, an organization focused on midlife women’s care, raised $60 million in series B funding. A total of 80 investors joined this round, including female celebrities such as Tory Burch and Amy Schumer. The virtual care company focuses on perimenopause and menopause, catering to women over 40.
In January, Midi expanded its virtual care clinic to employers nationwide. Now, the startup is securing impressive partnerships with major healthcare companies. In August, Midi inked a partnership with San Francisco-based musculoskeletal company, Hinge Health. As a physical therapy provider, Hinge Health launched an offering to provide “movement-based menopause support” for women with musculoskeletal and pelvic health conditions. Through the partnership, Hinge Health members will also have access to Midi’s clinical care if they are in-network.
Shortly after, Midi announced another partnership with New York City-based Mount Sinai Health System. Through the partnership, Midi aims to close gaps and support the continuum of care by connecting patients to Mount Sinai’s renowned menopause care. Midi and Mount Sinai both have robust direct-to-employer businesses, allowing the partnership to serve patients and employers.
Other women’s health companies are also garnering significant attention. Flo Health, a consumer-based period tracking app, secured $200M in Series C funding. The digital health company’s valuation is now $1B, making it the first women’s health app to reach unicorn status. With the new funding, Flo intends to expand into new market segments, such as menopause and perimenopause.
These substantial investments underscore broader trends in the market. According to Forbes, as of June 30, 2024, women’s health companies received a total of $679.48M in venture capital (VC) funding. If this trajectory continues, annual funding for women’s health companies is expected to surpass previous years. Another notable trend includes an increase in large funding rounds. In the first half of the year, at least four women’s health companies raised $50M or more in a single round of funding. In comparison, only two companies reached this amount during the same period in 2023.
With increased government initiatives, substantial VC investments, and support from public figures, the women’s health sector is experiencing positive momentum that is expected to continue.
Stay tuned for future posts and insights on the blog as well as LinkedIn.