DC EKG

DC EKG with Joe Grogan
The Economics of Ozempic and Other Weight Loss Drugs
Episode 136.5 (“Prescription Refill” – A replay from the archives)
Original Air Date: May 2024

In this episode, Joe Grogan welcomes Ben Ippolito, Senior Fellow in Economic Policy Studies at the American Enterprise Institute, to discuss the rapidly evolving economics of GLP-1 weight loss drugs like Ozempic and Wegovy.

Ben explains the two main competitors in this market—Novo Nordisk's Ozempic and Wegovy versus Eli Lilly's Mounjaro and Zepbound. Revealing how insurance coverage decisions drive pharmaceutical marketing strategy.

The conversation reveals a critical irrationality in Medicare policy: the statutory prohibition on covering weight loss drugs despite their profound clinical and quality-of-life benefits. Yet these same drugs are covered for diabetes and cardiovascular risk reduction.

Ben explores the surprising economics of drug pricing through gross-to-net pricing—the massive gap between list prices and what insurers actually pay through rebates and discounts.

The episode examines critical implications of the Inflation Reduction Act's price negotiation provisions. Once Medicare negotiates Ozempic's price, that same price applies to all products using the same active ingredient. This creates cascading market effects: competitors must match those prices to remain on formularies, new entrants face lower pricing power even if clinically superior, and pharmaceutical companies may abandon promising programs due to regulatory uncertainty.

Ben argues Congress doesn't need to act immediately to expand Medicare coverage, but likely will within a few years.

Joe and Ben discuss unintended consequences of government price regulation, including effects on innovation and drug development pipelines. They explore how price controls announced before elections affect pharmaceutical strategy and development timelines.

Concluding with Ben's research on Medicare Advantage and why both Democrats and Republicans scrutinize this private alternative to traditional Medicare. With over 50 percent of seniors enrolled in Medicare Advantage plans, bipartisan interest in reform is reshaping healthcare policy conversations on Capitol Hill.

Key Topics
GLP-1 drugs, Ozempic, Wegovy, Mounjaro, Zepbound, weight loss medications, obesity treatment, Medicare coverage, drug pricing, Inflation Reduction Act, pharmaceutical competition, rebates, gross-to-net pricing, health economics, cardiovascular benefits, diabetes treatment, Medicare Advantage, healthcare policy, innovation incentives

Key Timestamps
00:00 Cold Open: "Turned Up to 11"
00:24 Welcome to DC EKG
00:46 Meet Ben Ippolito (AEI)
03:48 The GLP-1 Landscape: Ozempic, Wegovy, and the Field
05:04 One Drug, Two Names
06:45 Medicare's Weight-Loss Coverage Ban
07:21 Blockbusters and Big Effect Sizes
09:32 Why Isn't Congress Acting?
10:17 Why It Costs Less Than You Think
12:34 The Coverage Irrationality
14:05 Quality of Life as a Real Benefit
15:17 Beyond Weight: Cravings and Addiction
18:21 Devil's Advocate: Why Cover It At All?
19:48 Gross-to-Net and the Rebate Problem
22:41 Why Can't You Just Pay Cash?
25:43 The IRA and the Ozempic Price Cut
27:32 One Ingredient, One Price
30:10 Unintended Consequences in Part D
34:01 New Competitors and Killed Programs
38:03 What's Next: Medicare Advantage
42:04 Wrap-Up and Credits

About the Guest
(As of May 2024) Ben Ippolito is a Senior Fellow in Economic Policy Studies at the American Enterprise Institute. He holds a PhD and Master's degree in Economics from the University of Wisconsin-Madison and a Bachelor's degree in Mathematics and Economics from Emory University. Ben examines drug pricing policy, Medicare Advantage, and healthcare innovation economics with regular engagement with Congress.

Podcast: DC EKG with Joe Grogan
Guest: Ben Ippolito

Sponsor: Survivors for Solutions
Producer: Stay on Course Studios
Executive Producer: John CZ Czwartacki, DC EKG Podcast

In Episode 136 of DC EKG, Joe Grogan hosts Tom Barker, a top drug-pricing attorney at Foley Hoag and former acting general counsel of Health and Human Services (HHS) under the Bush administration. Tom helped implement Medicare Part D and now advises drugmakers and policymakers on complex pricing issues. The episode traces 20 years of policy: what went right with Part D, what the Inflation Reduction Act (IRA) did, and what effective policy should look like.

Tom explains that Part D's success rested on three pillars: private plans only, limited government control over benefit design, and a non-interference clause barring the government from intervening in negotiations among plans, pharmacies, and manufacturers. Competition worked and premiums stayed low, until the government asserted more control and weakened those pillars. The IRA, he argues, was a 16-year Democratic effort to repeal non-interference, creating price controls disguised as negotiations.
The Trump administration has taken a different tack, focusing not on the IRA but on MFN and Globe Guard models pegged to other developed countries. Tom also breaks down the 340B program, now the country's second-largest expenditure program, and the fight between manufacturers and covered entities over contract pharmacies.

His prescription is simple: let competition work. Speed FDA approval of generics and biosimilars, and trust the marketplace over price controls. He points to hepatitis C, where prices fell sharply once competition entered.

In This Conversation
The three pillars that made Part D successful for 20 years
How non-interference kept government from setting drug prices
The IRA as a 16-year Democratic push to repeal non-interference
Why Tom calls the IRA price controls disguised as negotiations
The Trump administration's focus on MFN and Globe Guard pricing
340B and the battle between manufacturers and covered entities
The Chevron repeal's impact on drug pricing law
HRSA's proposed rebate model and ongoing 340B litigation
Why effective policy means competition, not controls
Tom's work helping North Korean defectors and refugees

Key Timestamps
1:51 Tom's background at HHS and CMS
2:30 The three pillars of Part D's success
5:10 Why Democrats wanted to repeal non-interference
5:55 Ted Kennedy's compromise and bipartisan votes
11:38 The IRA as a 16-year repeal attempt
12:03 What the IRA changed in Part D
15:02 IRA negotiations vs. real negotiations
16:25 How the excise tax makes it no real negotiation
21:32 Trump's focus on MFN and Globe Guard
25:37 340B's history back to 1991
28:45 340B as the second-biggest expenditure program
29:30 Manufacturer vs. covered-entity acrimony
33:18 The Chevron repeal's impact on pricing
34:54 HRSA's rebate model, the next step on 340B
35:40 The lawsuit over "patient" in 340B
38:18 Tom's advice: let competition work
39:30 Hepatitis C: competition drives prices down
40:34 Competition for gene therapies and CRISPR
41:36 Tom's work for North Korean defectors
44:49 Sponsoring Free North Korea Radio

Medicare Part D, drug pricing policy, Inflation Reduction Act, non-interference clause, 340B program, MFN pricing, Globe Guard pricing, pharmacy benefit managers, covered entities, contract pharmacies, biosimilars, generics, federal drug pricing, government price controls, Tom Barker

About the Guest
Tom Barker is a partner at Foley Hoag in Washington, DC, and one of the country's top drug pricing attorneys. He served as acting general counsel of HHS and chief legal officer at CMS under the Bush administration, where he helped implement Part D from its inception. He is now a go-to expert on drug pricing, and helps North Korean defectors navigate US immigration law.

Podcast: DC EKG with Joe Grogan
Episode: 136 Guest: Tom Barker
Sponsor: Survivors for Solutions - https://survivorsforsolutions.org
Executive Producer: John "CZ" Czwartacki,
DC EKG Podcast Producer: Stay on Course Studios - https://www.stayoncourse.studio

In Episode 134 of DC EKG, former CDC Director Dr. Robert Redfield joins Joe Grogan to discuss his new book, Redfield's Warning, and break down three major threats to public health: Long COVID, Hantavirus, and bird flu. Dr. Redfield explains the persistent viral reservoirs in long COVID patients, the cognitive dysfunction and autonomic dysfunction that devastate these individuals, and why the federal government must partner with the private sector to develop meaningful treatments. He also walks through the current Hantavirus outbreak on a cruise ship, the human-to-human transmission of the Andes virus strain, and why bird flu is the most likely candidate for the next pandemic. Throughout, Dr. Redfield emphasizes the critical importance of antiviral development and the dangers of gain-of-function research.

In This Conversation

The current Hantavirus outbreak on a cruise ship and human-to-human transmission

The Andes virus strain and why it differs from Sin Nombre and Four Corners Disease

Two transmission routes: aerosolization and direct contamination

Asymptomatic transmission and the intrinsic bias in testing

Why has the US government not developed Hantavirus countermeasures in 70 years

Bird flu is the most likely candidate for the next pandemic.

Gain-of-function research and the public disclosure of dangerous genetic data

Long COVID: viral reservoirs and the need for effective antiviral treatments

Why antivirals should be the priority over vaccines for emerging viruses

Operation Warp Speed and the importance of private sector partnerships

The dismissal of long COVID patients as psychosomatic and the need for validation

Key Timestamps
1:49 Details of the Hantavirus outbreak and cruise ship cases
3:00 Two methods of transmission: aerosolization and direct contamination
5:24 Asymptomatic transmission and testing bias
10:35 The Hantavirus family and why the Andes virus goes from human to human
12:35 How nervous should the public be
16:43 Shifting to bird flu and Redfield's Warning
19:00 Bird flu spread in US poultry and mammal populations
22:00 The four amino acids for bird flu to infect humans
23:30 The debate with Fauci over gain-of-function research
27:55 Unregulated gain-of-function research worldwide
33:35 Why antivirals should be the priority
37:55 Long COVID viral reservoirs and treatment gaps
42:37 The economic burden and need for solutions
43:57 The story of Joy and psychiatric misdiagnosis of long COVID
48:12 The solvability of long COVID and the importance of investing

Hantavirus, Hantavirus transmission, Andes virus, Sin Nombre virus, Four Corners Disease, cruise ship outbreak, bird flu, avian influenza, gain of function research, Dr. Robert Redfield, CDC Director, antivirals, vaccines, long COVID, pandemic preparedness, infectious disease, virology, Redfield's Warning

About the Guest
Dr. Robert Redfield is the former Director of the Centers for Disease Control and Prevention. A trained virologist with decades of experience in infectious disease, he has been a leading voice on public health policy, pandemic preparedness, and biosecurity. He is the author of Redfield's Warning: What I Learned as CDC Director and What We Must Do to Be Prepared for the Next Pandemic, available on Amazon: https://www.amazon.com/Redfields-Warning-Learned-Couldnt-Might/dp/1510785051

Podcast: DC EKG with Joe Grogan
Episode: 134
Guest: Dr. Robert Redfield, former CDC Director
Sponsor: Survivors for Solutions –
https://survivorsforsolutions.org
Executive Producer: John "CZ" Czwartacki, DC EKG Podcast
Producer: Stay on Course Studios –
https://www.stayoncourse.studio

In Episode 133 of DC EKG, Joe Grogan welcomes back Dr. Christiaan Alting von Geusau for Part 2 of their conversation, this time turning to the European Union. Christiaan walks Joe through the post-World War II origins of the EU as a peace initiative built around the Schuman Plan, the pooling of coal and steel between France and Germany, and the visionary leadership of Robert Schuman and Konrad Adenauer. He explains why understanding the EU's founding purpose is essential to understanding what has gone wrong since.

Joe and Christiaan unpack the principle of subsidiarity, the rise of EU bureaucracy and over-regulation, the ideological capture of Brussels institutions, and the long detour into cultural battles that were never the EU's job to fight. They discuss Germany's strategic mistake of abandoning nuclear energy, the widening economic gap between the US and Europe, and why Friedrich Merz himself has called the EU the world champion of over-regulation.

The second half of the episode looks at the US-EU relationship under President Trump's second term, including the Digital Services Act and free speech, decades of European free-riding on American defense, and the rise of bilateral engagement between Washington and individual European capitals. The conversation closes with a sharp discussion of the leadership vacuum across the West and Europe's growing economic dependence on China.

In This Conversation

How the European Union began as a Franco-German peace project

Why the Schuman Plan and the pooling of coal and steel still shape Europe today

The principle of subsidiarity and how Brussels has overstepped it

Why Germany's abandonment of nuclear energy was a strategic disaster

How EU institutions have been captured by ideology

The Digital Services Act and the threat to free speech in Europe

Why the US-EU relationship is under serious strain

Whether Washington should deal with Brussels or with national capitals

Europe's leadership vacuum and growing dependence on China

Timestamps

0:00  Why Brussels has become the global champion of over-regulation

1:10  Joe welcomes back Christiaan for Part 2

1:32  Christiaan reintroduces himself and his background

3:00  Why the EU is misunderstood on both sides of the Atlantic

4:15  The historical origins of the EU and the Franco-German conflict

6:00  The Schuman Plan and the pooling of coal and steel

11:30  Truman, the Marshall Plan, and Dean Acheson

12:37  What went wrong with the EU

14:50  Bureaucracy, nuclear energy, and the German mistake

19:35  The principle of subsidiarity and why it matters

23:24  Cultural overreach by Brussels

26:44  Friedrich Merz on EU over-regulation

27:28  The widening US-EU economic gap

32:03  Free speech, the Digital Services Act, and Trump

38:33  European free-riding on American defense

44:07  Should Washington bypass Brussels

48:30  The rise of bilateral engagement

51:23  The leadership vacuum across the West

58:30  Europe's economic dependence on China

1:01:12  Wrap-up

European Union, EU history, Schuman Plan, Franco-German conflict, subsidiarity, EU bureaucracy, EU overregulation, German nuclear energy, Digital Services Act, free speech Europe, US-EU relations, Trump and the EU, NATO defense spending, Europe-China dependence, transatlantic relationship, Christiaan Alting von Geusau, DC EKG

About Our Guest

Dr. Christiaan Alting von Geusau is a lawyer, professor, advisor, and host of the podcast The Educated Leader. Born in the United States and raised in the Netherlands, he studied law at Leiden University and Heidelberg University. He earned his doctorate in philosophy of law at the University of Vienna. He leads the International Catholic Legislators Network, serves as the principal of Ambrose Advice, and is the Rector emeritus and Professor of Philosophy of Law and Education at ITI Catholic University in Austria.

Podcast: DC EKG with Joe Grogan

Episode: 133

Guest: Dr. Christiaan Alting von Geusau

Sponsor: Survivors for Solutions – 

https://survivorsforsolutions.org

Executive Producer: John “CZ” Czwartacki, DC EKG Podcast

Producer: Stay on Course Studios – 

https://www.stayoncourse.studio