Programming Note: Value Report will take a one-week break in observance of Juneteenth National Independence Day. We’ll return on June 26 with fresh insights on health policy and prescription drugs. Thank you for being a valued reader.

Employer-sponsored health insurance is facing a new level of scrutiny driven by fresh data that underscores just how unsustainable current cost trends have become.

This week, multiple surveys and analyses pointed to mounting pressure on employers. A new PwC report projects commercial healthcare costs could rise 9% in 2027, the highest increase in nearly two decades. The spike is reportedly driven in part by rising pharmacy spend, provider reimbursement pressure and increasing utilization of behavioral health services.

Coverage of GLP-1 weight loss drugs remains a flashpoint, with surveys showing widespread concern about affordability and a growing willingness to scale back benefits. Along with specialty drugs, GLP-1s continue to be the biggest drivers of pharmacy spend.

The Business Group on Health found that one in 10 employers plan to pull back coverage in 2027. Employee plan sponsors are also exploring measures to control costs, with more than two-thirds of employers surveyed by the Pharmaceutical Strategies Group considering changes to their cost-sharing structure.

Consumers, workers included, are feeling the squeeze. Another survey, this time from the Coalition to Strengthen America’s Healthcare, found that nearly half of Americans blame health insurers as the primary driver of rising healthcare costs, reflecting growing frustration with premiums, coverage decisions and perceived barriers to care.

With healthcare as a key voting issue heading into midterm elections, we anticipate a continued uptick in published surveys and analyses as healthcare stakeholders—and voters themselves—seek to quantify and assign responsibility for cost pressures. This drumbeat of data will further shape the narrative around affordability, keeping employer-sponsored coverage squarely in the spotlight.

– Megan Hickey, Managing Director

The U.S. biotech industry has remained a bipartisan priority for members of Congress looking to support innovation and economic growth stateside. However, in recent meetings, industry groups are now reckoning with a “growing fracture” in D.C. over dealmaking with Chinese companies and how it intersects with national security

Case in point: The Department of Defense recently added WuXi AppTec, a major drug development and manufacturing contractor, to a list of companies the agency says are linked to the Chinese military.

The list stems from a provision in last year’s annual defense policy bill intended to limit federal purchasing of biotechnology equipment and services from companies deemed national security risks. Based on the controversial BIOSECURE Act, the law prohibits federal agencies or recipients of federal funds from doing business with listed companies.

“Such designation is mistaken and baseless,” WuXi AppTec said in a statement. “We will pursue every available avenue to correct this mistake.”

The immediate impact of the Pentagon’s list is blunted by the narrow tailoring and yearslong timeline before any sanctions would take effect. However, it does resurface concerns that the law would cause U.S. pharma companies to at least consider major changes to procurement and contracting with Chinese partners.

– Andrew Wishon, Editor-in-Chief

The American Medical Association’s annual House of Delegates meeting in Chicago signaled a shift for the country’s largest physician lobby as it seeks to counter declining public trust in medicine and unprecedented political pressure on the profession.

The meeting’s clearest signal was the election of Sandra Fryhofer as AMA president-elect. An Atlanta internist and public critic of HHS Secretary Robert F. Kennedy Jr., Fryhofer defeated the incumbent board chair with pledges to fight the administration “tooth and nail.” Her victory breaks with outgoing president Bobby Mukkamala’s strategy of selective engagement with Kennedy, an approach Fryhofer called “too silent and too timid.”

The policy votes from the meeting reflected a more selective posture. On drug pricing, delegates aligned with the administration in backing requirements that direct-to-consumer drug purchases through platforms like TrumpRx count toward patient deductibles. However, the AMA declined to endorse the Most Favored Nation drug pricing approach and held off on extending 340B drug discount program savings to private practice patients—both issues referred for further study.

Delegates drew firmer lines elsewhere: opposing the “provider” label for physicians in an effort to combat scope creep, considering legal action against a White House grantmaking rule, and passing resolutions defending COVID vaccination and opposing NIH grant terminations.

Fryhofer won’t take office until next summer, meaning incoming president Willie Underwood III—a health equity-focused urologist described as a “wild card”—will govern the critical next year for the organization.

– Isha Vial, Senior Manager

Coverage denied.
Evidence supplied.
Patients thrive.
Knicks in five.

Leah Nebbia, Managing Director

• June 14-18 – Global Annual Meeting for professionals in the life sciences, Drug Information Association
• June 17 – committee markup on eight healthcare bills, Senate HELP
• June 22-25 – the largest convening on biotechnology, BIO International Convention
• June 23 – public meeting on the fiscal management of the agency’s user fee agreements, FDA

• “Gene therapies are not mass-produced pills. In many ways, they are closer to organ transplants, requiring specialized centers, highly trained teams, and limited clinical capacity.” – William V. Padula, STAT
• “The nurse who spent her career telling patients to take their medications as prescribed was sometimes forced to ration her own.” – Merith Basey, The Hill
• “The fox was left to guard the henhouse, and now the chickens are all gone. If this issue goes uncorrected, there will soon be no pharmacy choice for Medicare beneficiaries at the table.” – John Mildenberger, Pharmacy Times
• “Americans wait an average of just three months between the global launch of a new medicine and reimbursement through Medicare. Patients in comparable countries wait nearly three years, on average. That delay can mean the difference between life and death…” – Sally Pipes, Newsmax

• Five EU countries are calling for a united response to drug-pricing pressure from the Trump administration, as over 30 pharma CEOs request urgent meetings with Germany’s chancellor. Politico: 5 countries call for united EU response to Trump’s drug price threats.
• The FDA’s warnings of advertising and promotion violations have expanded beyond TV commercials to include emails and YouTube videos. Pink Sheet: Recent US FDA Ad/Promo Untitled Letters Citing More Email, Internet Issues, Less DTC TV Spots.
• In France, higher costs tied to conflict in the Middle East have led manufacturers to request price adjustments for prescription drugs. Pink Sheet: Iran War: Adapt Pricing To Mitigate Rocketing Costs, Demands French Drug Industry.
• President Trump announced that his titular prescription drug discount website will add 160 new medicines. The Hill: Trump announces TrumpRx expansion, adding 160 more drugs.
• AstraZeneca CEO Pascal Soriot warns that if pricing pressure continue to rise, the company could withhold new medicines from Europe, adding to concerns that U.S. MFN pricing might strain new prescription drug launches abroad. Financial Times: AstraZeneca chief warns group could withhold new drugs in Europe.
• According to reports, HHS Secretary Kennedy has shown limited engagement with the department’s broader staff and its 13 operating divisions, raising concern about how closely he is monitoring public health crises. The New York Times: Kennedy Shows Minimal Engagement With Vast Health Portfolio.
• As menopause becomes a priority in public policy, over half of U.S. states are enacting or considering legislation from support of women’s health to anti-discrimination policies. Axios: More than half of states have taken up menopause legislation.
• Use of GLP-1 weight loss drugs in the UK has led to about $1 billion in grocery savings annually in the nation as 6.3% of British households now have at least one member on a GLP-1. Bloomberg: Weight-Loss Drugs Cut UK Food Bills by £780 Million, Study Shows.