Analysis

This week, I’m rerunning some popular posts before the holidays. Click here to see the original post and comments from September 2018.

BTW, my personal Independence Blue Cross “platinum” health plan just added copay accumulator adjustment! Click here to see the evidence.

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In January, I alerted you to an important new benefit design trend in Copay Accumulators: Costly Consequences of a New Cost-Shifting Pharmacy Benefit. It is by far the most widely read article ever published on Drug Channels.

New data from Zitter Health insights (ZHI) suggest that these programs are widely used. Nearly one-third of commercially-insured lives are enrolled in plans that have implemented copay accumulator adjustment or closely-related copay maximizers. (We explain the benefit design math behind maximizers below.)

ZHI also found that a surprising number of plans are already set up to use these programs, but have not done so yet. And many more are planning implementation for 2019 and beyond. Check out the full data below.

Manufacturers have stepped up with more financial support to shield patients from the worst aspects of these benefit designs. This support further inflates the gross-to-net bubble. Plan sponsors’ use of maximizers instead of accumulators has also blunted the impact on patients.

Accumulators, maximizers, and large copay support programs are inefficient solutions to flaws in the U.S. drug channel system. Alas, it looks like they are all now a common—but possibly not even fully utilized—feature of the benefit design landscape.

Today’s guest post comes from Lee Ann Stember, President and CEO of the National Council for Prescription Drug Programs (NCPDP).

Lee Ann discusses the crucial importance of getting patients timely access to specialty therapies. She invites Drug Channels readers to participate in NCPDP’s specialty pharmacy work group and its four task groups. Your participation will help establish and refine standards that will benefit patients and all industry participants.

It's simple. Create an account at www.dms.ncpdp.org and then select your preferred task groups. You can also click here to register for upcoming NCPDP meetings.

Read on for Lee Ann’s insights and to get more information about NCPDP’s specialty pharmacy task groups.

Whew. I can’t recall a year with as much drug channel tumult as we experienced in 2018.

Hot topics included the ever-inflating gross-to-net bubble, the prospect for a world without rebates, the boom in copay accumulators, the specialty pharmacy industry’s slowdown, the completion of vertical integration mega deals, an aggressive federal government attempt to reform the entire industry, the still-looming challenge from Amazon, and much more.

I’m exhausted just thinking about it all!

I’m happy to say that Drug Channels was there to help you figure it out. Our site had another record year of readership. Drug Channels now has more than 24,000 subscribers, including more than 6,600 @DrugChannels Twitter followers. (Follow me there for daily updates.)

Thank you, dear readers, for welcoming me into your inboxes and browsers each week. I’ve had a blast writing Drug Channels and hope that you had fun reading it. I’m grateful to our many sponsors and guest writers. Special thanks to the brave souls who posted comments and joined in the spirited discussions below the articles.

Below, you'll find our annual bonus stocking stuffer: The Drug Channels Outlook: Things to Watch in 2019. These slides capture ideas I shared in my recent keynote presentation at CBI's Trade and Channel Strategies conference. It’s a sneak peek at some of next year's likely hot topics.

You'll also find our annual holiday tradition—a video greeting below from me and Paula, my wife and business partner in Drug Channels Institute.

Wishing you and your family health and happiness,
Adam

Last week, the econowonks at the Centers for Medicare & Medicaid Services (CMS) released the 2017 National Health Expenditure (NHE) data. Links below.

For 2017, drug spending grew by a mere 0.4%—significantly below the growth of spending on hospitals, physician services, and overall national healthcare costs. These latest CMS data confirm the drug spending slowdown that I have highlighted in previous Drug Channels articles.

Too many people—including politicians, journalists, and a certain billionaire—have committed to a false narrative of “skyrocketing” drug spending. Hmm, I don’t recall any of them ranting about “hospital prices” or “physician salaries”—two categories that together account for six times as much healthcare spending as outpatient drugs. Perhaps that's because despite the aggregate spending disparity, consumers (voters) spend a lot more out-of-pocket on pharmaceuticals than what they spend out-of-pocket on hospital care.

Alas, I must again note that demonizing pharmaceuticals as the prime driver of U.S. healthcare spending is simply false. See what you think.

sPCMA Business Forum

March 11 & 12, 2019

Hilton Bonnet Creek | Orlando, FL
Register Today!

The sPCMA Business Forum will return to the Hilton Bonnet Creek in Orlando, FL on March 11 & 12.

Senior executives and decision makers from PBMs, health plans and their affiliate specialty pharmacies will come together at the 2019 Business Forum to collaborate with drug makers and their other important business partners. The event offers invaluable networking and education for individuals and companies involved in the specialty drug supply chain. Registration for the conference is now open online.

Contact PCMA

Please contact Jenny Bradham (jbradham@pcmanet.org) with questions or to request further information.

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The content of Sponsored Posts does not necessarily reflect the views of Pembroke Consulting, Inc., Drug Channels, or any of its employees.

Today’s guest post comes from Brian Nightengale, President, Good Neighbor Pharmacy at AmerisourceBergen.

Brian discusses the challenges facing independent pharmacies. He outlines an intriguing growth vision for pharmacies that provide medication therapy management and other patient care services.

For more on how pharmacies can enhance care and lower medical expenses, see Delivering Care Beyond Prescriptions: A Marketplace Opportunity for Independent Pharmacies.

Read on for Brian’s insights.

Modern Distribution Management recently published my article 2018 MDM Market Leaders | Top Pharmaceuticals Distributors. It is an excerpt from our 2018–19 Economic Report on Pharmaceutical Wholesalers and Specialty Distributors.

Below, I republish the section of the article highlighting five significant industry trends affecting the U.S. drug wholesaling industry. I think Drug Channels readers will enjoy this summary as we look toward 2019. Click here to download a free overview of the full 2018-19 report.

P.S. I’ll be discussing these and other topics next week in my keynote address at CBI's 14th Life Sciences Trade and Channel Strategies. Hope to see you there!

Last week, the Centers for Medicare & Medicaid Services (CMS) released a new rule for Medicare Parts B and D. It proposes changes to protected classes, e-prescribing, and other issues. Links and background below.

Notably for the Drug Channels audience, CMS also announced that it is considering—but not yet formally proposing—changes to how pharmacy price concessions are handled within Medicare Part D. These payments currently function like pharmacy rebates to Part D plans. They are therefore considered to be direct and indirect remuneration (DIR) and often called “DIR fees.”

Thanks to new CMS disclosures, we can now see why pharmacy owners hate these payments. Pharmacy DIR was $4 billion in 2017—about 1.5% of the retail pharmacy industry’s prescription revenues.

As I explain below, pharmacy DIR negatively affects the Medicare program and its beneficiaries in a manner similar to the impact of the rebates that manufacturers pay to plans. CMS wants the pharmacy DIR passed through to beneficiaries at the point of sale, i.e., when a prescription is dispensed.

Below, I explain this proposal, provide DCI's new analysis of DIR, and review the financial impact on drug channel participants. Keep in mind that the CMS proposal would *not* eliminate DIR fees or alter the financial impact of these payments on pharmacy profits. However, it’s clear that CMS wants plans and PBMs to change how these fees are computed and levied.

Pharmacy DIR is an important issue, because CMS is sharing some its views for a world without Part D rebates. The tough political question: Should taxpayers spend more to fix this problem?

PBMI 2019 Annual National Conference
March 4-6, 2019 │Palm Springs, CA

PBMI invites you to join more than 400 healthcare stakeholders in sunny Palm Springs, California at The Westin Mission Hills Golf Resort & Spa Hotel, March 4-6, 2019 for its 24th Annual Conference.

As a special offer to Drug Channels readers, PBMI is offering a $200 savings discount on conference registration fees. Enter discount code PEM19 when you register online – code expires February 15, 2019.

The conference will open with a keynote presentation from Thomas E. Price, MD, an orthopedic surgeon. Dr. Price most recently served as the 23rd Secretary of Health and Human Services (HHS). During his presentation, Dr. Price will talk about the ever-evolving and transforming role innovation has on healthcare and how Artificial Intelligence (AI) will change our system.

Attendees will also hear from thought leaders at the forefront of what's happening in the industry and the patient perspective. See a list of confirmed speakers here.

As a special offer to Drug Channel subscribers, PBMI is offering a $200 savings discount on conference registration fees. Enter discount code PEM19 when you register online – code expires February 15, 2019.

For more conference information, visit the conference website.

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The content of Sponsored Posts does not necessarily reflect the views of Pembroke Consulting, Inc., Drug Channels, or any of its employees.

Today’s guest post comes from Patricia Milazzo, Senior Director, Embedded Content with Clinical Effectiveness at Wolters Kluwer, Health.

As Patty explains, the U.S. Food & Drug Administration (FDA) will run out of 5-digit National Drug Code (NDC) codes within the next ten to fifteen years. She describes how the FDA can minimize the negative effects of the inevitable change in NDC format.

To learn more about the debates and best practice recommendations, download the complete paper, The NDC Shortage: What the FDA Could (and Should) Do to Address It.

Read on for Patty’s insights.