Weekly Health Tech Reads 2/22/26

Given the national conversation about healthcare costs, the question of “what would it look like to actually reduce healthcare spending?” is on my mind a lot lately. This week saw a confluence of news around three recent regulatory attempts to reduce healthcare costs that I thought would be interesting to unpack — the IRA, the NSA, and ACCESS:

The Inflation Reduction Act and drug costs.
As I generally understand the theory of the IRA, Medicare’s massive volume should create negotiating leverage, enabling it to secure meaningful price discounts from pharma. That should help reduce overall drug spending.

To that end, Eliquis, one of the highest revenue drugs in the US, was identified as one of the first ten drugs for the first round of IRA negotiations. Eliquis generated $12.2 billion of revenue in 2023. Medicare negotiated a 56% price decrease with Bristol Myers Squibb, the manufacturer of Eliquis, which would appear on its face to be a win for healthcare costs. In total, the negotiations across the first 10 drugs were celebrated for driving down seniors' spending by an estimated $1.5 billion in 2026, the first year the new prices go into effect. Great!

Given that, it was a bit odd to read in Bristol Myers Squibb’s earnings call earlier this month that it now expects Eliquis revenue to grow by 10% to 15% in 2026.

So, the same year that the IRA goes into effect and will slash the price of Eliquis by 56% in Medicare, Bristol Myers Squibb is somehow still growing revenue generated by that drug from $14.4 billion in 2025 to an expected ~$16 billion, an increase of ~$2 billion, or more than the entire expected savings from the IRA negotiation process. Analysts were apparently pleasantly surprised by this outcome, and BMY’s stock is up ~10% over the last few weeks. Lots of analysts focused on Eliquis in the Q&A, which apparently will see a revenue decline in 2027, driven by going off-patent OUS. By 2030, going off-patent is expected to drive Eliquis revenue down to nearly zero. The benefits of competition versus regulation.

One might ask, how is it possible that an already market-dominant drug sees growth while its price is slashed 56%? This article does a nice job walking through the dynamics at play here. It doesn’t appear that volume increases are driving revenue growth; instead, BMY appears to have changed its approach to list-to-net pricing differences, which more than offset the price decrease. An example of the oddities here… BMY has agreed to reduce the price of Eliquis in Medicaid to zero — literally free of charge! — and somehow that move is apparently actually a boost to BMY profitability because of some inflation rebate dynamic that I cannot claim to fully comprehend.

This is a wild quote to read about what was essentially the poster child drug for the IRA:

The No Surprises Act & provider OON billing
Also on the list of regulatory oddities this week is the No Surprises Act, legislation that seemed designed to protect consumers from surprise medical bills from out-of-network providers while bringing more transparency to the market. Great!

There seemed to be some early wins from the NSA, as it drove a handful of PE-backed groups deploying these tactics into bankruptcy early on (Envision and American Physician Partners). Yet here we are now several years later, and other PE-backed groups apparently have figured out how to leverage the Independent Dispute Resolution process to their advantage.

So much so that Centene noted on its most recent earnings call that it is seeing a 1% increase in medical expenses for its ACA population in 2025 due to providers abusing the IDR process. It is now apparently initiating lawsuits against some providers as a result. If I assume Centene’s experience is accurate and representative of the overall exchange population, this would seemingly imply that the IDR process is increasing medical costs on the exchanges by $1 to $2 billion in 2025, driven by a small group of providers leveraging the process to increase the amounts they can charge payors.

Yet again, we have an example of legislation seemingly designed to reduce costs being outsmarted by the industry to drive up costs. It turns out that provider price transparency, while a noble goal, is actually a mechanism for provider groups to charge more. What appears to happen is that providers that have historically been paid lower prices can use the transparency to ratchet up rates, with the result being that the market as a whole is pulled up. Or at least that’s what the IDR process seems to suggest is the case.

The implications for ACCESS & digital health
The examples of NSA and IRA highlight the challenges the government has faced in implementing regulations that actually reduce healthcare spending, despite its best efforts. Companies that understandably want to protect their profit pools can find ways around them.

It was fascinating to juxtapose those conversations this week with the dialogue around the CMMI ACCESS Model, another program seemingly designed to deflate healthcare costs by encouraging the adoption of technology-enabled care and a new associated profit pool. As I mentioned in the newsletter last week, CMMI announced ACCESS payment rates that were lower than many in the industry expected.

It was really helpful to chat with CMMI’s Chief AI & Technology Officer, Jacob Shiff, about the model this week. You can listen on YouTube below (or Spotify, or Apple):

Listening to Jacob articulate the vision here, it very much seems that ACCESS is intended to improve access to high-quality, cost-effective care for a broad swath of the Medicare population, aligned with broader administration efforts to leverage technology to set healthcare on a better financial trajectory.

If ACCESS is successful, it will also create a new profit pool with billions in annual revenue for participants. That seems like a huge opportunity for entrepreneurs and investors to pursue. I’d imagine the “AI will make the marginal cost of care delivery zero” investor/entrepreneur crowd will be all over this opportunity. This is the most interesting aspect of this to me — ACCESS is inviting more competition and the opportunity to create a bigger overall market for digital health, albeit one at a fundamentally different cost structure than it exists today.

The rates seem intentionally set low to be deflationary for healthcare costs. They will necessitate a cost structure that will likely require rethinking approaches from the ground up rather than building on previous generations of digital health for chronic condition management. The labor costs in traditional approaches are too high to make the math work here. Inevitably, this tension will invite reasonable questions about the safety and quality of care provided by the participating companies, as the existing industry pushes back against more technology-centric approaches. It’s an issue that seems both important and very political in nature, as it puts jobs at risk. It will be worth keeping an eye on the outcomes data CMMI reports on participants as part of this. As we’re seeing with the NSA process, visibility into the data is helping people understand what is happening to program outcomes.

Ultimately, it strikes me as a good thing for regulators to be taking swings like this to deflate healthcare costs, encourage competition, and foster greater transparency in the market. The challenges facing these efforts seem fairly straightforward, and if previous attempts are any indication, it’s a steep uphill battle. Healthcare’s profit pools have proven to be quite resilient over time, and shrinking them is hard. If ACCESS is going to be successful in creating a new profit pool for tech-enabled care while also deflating overall costs, it will need to shrink profits somewhere else in the ecosystem.

There are undoubtedly a number of obstacles that make success here a challenge — from model awareness to industry pushback to questions on specific model tweaks — that’s how it goes with efforts like this. But I find myself growing more intrigued by the day in ACCESS as a new attempt here.

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