Analysis

Today’s guest post comes from Sam Blake, Vice President of Launch Excellence at ConnectiveRx.

Sam discusses the evolving landscape of copay adjustment programs. He explains how pharma brand teams and hub program managers can lessen the impact of accumulators and maximizers on patients’ access and adherence.

To learn more, join Chris Dowd, Senior Vice President of Market Development at ConnectiveRx, for a free webinar on October 26th at 1:00 pm ET: The Battle Over Accumulators and Maximizers: What You Need to Know for 2024.

Read on for Sam’s insights.

I am pleased to announce our new 2023–24 Economic Report on Pharmaceutical Wholesalers and Specialty Distributors, available for purchase and immediate download.

• Click here to download a free report overview (including a summary of industry trends, the Table of Contents, and a List of Exhibits)

• New Drug Channels Institute Study: U.S. Drug Distribution Industry Gaining from Anti-Obesity Drugs and Provider-Administered Biosimilars (press release)

We’re offering special discounted pricing if you order before October 23, 2023!

The 2023–24 Economic Report on Pharmaceutical Wholesalers and Specialty Distributors—our 14th edition—remains the most comprehensive, fact-based tool for understanding and analyzing the large and growing U.S. pharmaceutical distribution industry. No other report on the market today offers the depth, insight and analysis into these channels

This 2023-24 edition contains the most current financial and industry data along with detailed information about the strategies and market positions of the largest companies: AmerisourceBergen, Cardinal Health, and McKesson. It updates our annual analysis of each wholesaler’s business segments and underlying business profitability, based upon our proprietary economic models.

The notable new material in this 2023-24 edition includes:

• New data about commercial pricing and reimbursement for provider-administered biosimilars appears in Section 3.2.2. and Section 6.4.3.

• A new Section 6.2.2. reviews the evolving specialty pharmacy industry and discusses emerging challenges from direct distribution models that bypass wholesale distribution.

• A new Section 6.3.2. analyzes the acquisitions of physician practices by corporate entities and private equity firms

• A new Section 6.5. addresses the Inflation Reduction Act of 2022. In Subsection 6.5.1., we summarize the key provisions of the law that relate to prescription drugs. In Subsection 6.5.2., we analyze the IRA’s likely consequences for wholesalers and the overall pharmaceutical business.

• We provide updated, expanded, and reorganized data about the following markets:
  • Pharmacy services administrative organizations (Section 2.2.4.)
  • Group purchasing organizations for small pharmacies (Section 2.2.5.)
  • Group purchasing organizations for physician practices (Section 3.3.2.)
• Material that addresses COVID-19 and its impact on the wholesale channel has been integrated into our analyses throughout the report. However, we have retained and updated Section 6.1.4., which examines the distribution of COVID-19 vaccines and therapeutics.

• There are 163 exhibits in this 2023-24 edition, compared with 150 in the 2022-23 edition.

If you would like to pay by corporate purchase order or check, please email Tamra Feldman. If you preordered the report, you should have already received an email with download instructions. Please contact us if you did not receive the email.

WHAT’S GOING ON

Twice a year, I research and write two comprehensive, fact-based, and nonpartisan reports on drug channel economics. In some small way, I try to make the world a better and smarter place.

Licenses for our DCI reports are regularly purchased by nearly every entity involved in the drug channel: pharmaceutical manufacturers, wholesalers, pharmacists, pharmacy owners, hospitals, buyers, benefit managers, managed care executives, policy analysts, investors, consultants, and more. So, you can find out what your customers, partners, and competitors are reading.

The 2023–24 Economic Report on Pharmaceutical Wholesalers and Specialty Distributors is the only resource of its kind available anywhere. It offers 163 proprietary charts, exhibits, and data tables.

FOUR FUN FACTS

• The 9 chapters are self-contained and do not need to be read in order. (Really!) There are loads of internal hyperlinks to help you navigate the document and customize it to your specific interests and priorities.

• We are offering the option to download an additional PowerPoint file with images of all 163 exhibits. This popular option helps you share the insights and data with others in your organization. (The exhibits appear in all license versions. The PowerPoint file option is available only with the purchase of a corporate license.)

• There are more than 660 endnotes, most of which have hyperlinks to original source materials. These source materials offer a handy way to build your knowledge base beyond what’s included in the full report.

• As usual, I have reluctantly stripped out the corny jokes and pop culture references.

If you have any questions (before or after reading the report), please email me.

Enjoy!

Today’s guest post comes from Michael Carr, Group Vice President, CoAssist Pharmacy at AssistRx.

Michael discusses the challenges that patients and healthcare providers face during the prescription intake and enrollment process. He outlines four key features of solutions that improve digital intake.

To learn about AssistRx’s digital intake technologies, download their case study: Digital Intake for More Meaningful Patient and HCP Interactions.

Read on for Michael’s insights.

This week, I’m rerunning some popular posts while I put the finishing touches on DCI's new 2023-24 Economic Report on Pharmaceutical Wholesalers and Specialty Distributors.

One important update on copay accumulators since my original post from August 2023: U.S. District Court, District of Columbia struck down U.S. Department of Health and Human Services rule allowing non-grandfathered individual and group plans to exclude manufacturers' copay assistance from deductibles. (Details and industry reactions here.) IMHO, this was a huge win for patients thanks to the HIV + Hepatitis Policy Institute, the Diabetes Patient Advocacy Coalition, and the Diabetes Leadership Council.

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In my most recent video webinar, I explored how plans and PBMs are turning to novel—and highly controversial—benefit design tools that access manufacturers’ patient support spending: copay accumulators, maximizers, and alternative funding programs.

In the video excerpt below, I describe these new approaches that plans offset specialty drug expenses. I then follow the dollar to show how they impact plan, patient, and manufacturer costs when compared with traditional approaches to copay support.

During the full 90-minute webinar, I discussed seven crucial risks that could disrupt this market along with many other aspects of this emerging market. If this clip whets your appetite for more, you can purchase the 90-minute webinar replay and full slide deck here: PBMs and the Battle Over Patient Support Funds: Accumulators, Maximizers, and Alternative Funding.

Click here if you can’t see the video below.



Two recent Drug Channels article on these topics:

• Copay Accumulator and Maximizer Update: Adoption Plateaus as Insurers Battle Patients Over Copay Support

• Employers Expand Use of Alternative Funding Programs—But Sustainability in Doubt as Loopholes Close

Errata: The formulary rebate in the mathematical example that begins at 4:40 should be shown as 16.7%, not 20%. We apologize for the error.

This week, I’m rerunning some popular posts while I put the finishing touches on DCI's new 2023-24 Economic Report on Pharmaceutical Wholesalers and Specialty Distributors.

Click here to see the original post from June 2023.

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Time for Drug Channels’ annual update on pricing at the largest pharmaceutical manufacturers. This year’s review includes the following 10 companies: Eli Lilly and Company, Genentech, GlaxoSmithKline, Janssen, Merck, Novartis, Novo Nordisk, Sanofi, Takeda, and UCB. You can find links to each company’s data below.

When rebates and discounts were factored in, brand-name drug prices again declined—or grew slowly—in 2022. However, some companies had net price gains. Consistent with our previous analyses, rebates and discounts reduced the selling prices of brand-name drugs at the biggest drugmakers to less than half of their list prices.

For the eight companies with multiple years of data, the gross-to-net difference in price changes was the smallest gap in six years. See the second chart below.

As I have noted, powerful industry forces may trigger the gross-to-net bubble to deflate. But for now, the 2022 data provide fresh inconvenient facts for the drug pricing flat earthers (#DPFE).

This week, I’m rerunning some popular posts while I put the finishing touches on our new 2023-24 Economic Report on Pharmaceutical Wholesalers and Specialty Distributors.

Since I published the article below in July 2023, there have been three notable market develpoments:

• IQVIA has reported that as as of mid-2023, there was almost no adoption of Amgen's Amjevita, the first Humira biosimilar.

• CVS Health launched Cordavis, a new subsidiary that will market a private label, low-list-price version of Sandoz’ Hyrimoz.

• Boehringer-Ingelheim launched an unbranded, low WAC version of its interchangeable biosimilar.

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The Humira biosimilar market has arrived!

This month, nine biosimilar versions of adalimumab launched in the U.S. market. As I predicted in 2021, some products launched with list prices that are only slightly lower than Humira’s list price, while others are trying to tempt payers and pharmacy benefit managers (PBMs) with deep list price discounts.

Surprisingly, two PBMs—Express Scripts and OptumRx—will each offer at least one low-list-price biosimilar option on their main national formularies.

Below, I help you understand the current and future market dynamics by posing four questions about drug pricing, rebate walls, patient behavior, the gross-to-net bubble, pharmacy/wholesaler economics, and more.

No biosimilar has the trifecta of being high-concentration, citrate-free, and fully interchangeable. These shortcomings, combined with physician hesitancy, will limit the ability of price to drive adoption. But as I see it, the Humira price war signals that rebate walls will crumble and the gross-to-net bubble will pop. Will payers let Humira go?

This week, I’m rerunning some popular posts while I put the finishing touches on DCI's new 2023-24 Economic Report on Pharmaceutical Wholesalers and Specialty Distributors.

Click here to see the original post from May 2023.

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In The Top Pharmacy Benefit Managers of 2022: Market Share and Trends for the Biggest Companies, I shared Drug Channels Institute's analysis showing that three pharmacy benefit managers (PBMs)—the Caremark business of CVS Health, the Express Scripts business of Cigna, and the OptumRx business of UnitedHealth Group—accounted for about 80% of total equivalent prescription claims in 2022.

In recent years, each of these companies has launched new group purchasing organizations (GPOs) to further consolidate the number of covered lives in rebate negotiations with pharmaceutical manufacturers. Today, I examine these PBM-owned GPOs and then speculate on five plausible explanations for their existence. I also highlight a sixth, alleged rationale that is currently the subject of litigation.

The Federal Trade Commission (FTC) has recently started investigating these GPOs. I wonder if this additional focus will deepen the FTC’s ongoing investigation—or slow it down even further?

Today’s guest post comes from Micah Litow, Chief Operating Officer at Kalderos.

According to Kalderos, at least 5% of commercial rebates are paid for prescriptions that also have discounts under the 340B Drug Pricing Program. Micah outlines why it's more than a feeling that manufacturers struggle to walk away from these duplicate payments. But as he explains, reliable data is crucial to avoid hearing that old song that PBMs play.

To learn about Kalderos’ Commercial Discount Monitoring solution, close your eyes and slip away with Micah at his free webinar on November 1, 2023, at 2:00 p.m. ET: Sharpening Focus: How Data Analytics Transforms Commercial Contracting Strategies.

Read on for Micah’s insights.

Autumn is here! Curl up with your favorite pumpkin-spiced blog and savor these stories harvested from the great Drug Channels patch:

• A must-read report on hidden sources of PBMs’ profits

• How generic drugs drive specialty pharmacy profits

• CVS Health’s unadvertised 2022 drug trend report

• A shocking look at how PBMs set prescription prices

Plus, Dr. Glaucomflecken teaches us about our insurance benefits.

P.S. Join my more than 45,000 LinkedIn followers for daily links to neat stuff. You can also find my daily posts at @DrugChannels on Twitter/X, where I have more than 16,900 followers. (I recommend that you follow me on LinkedIn, because the quality of comments and engagement is much higher than they are on Twitter. I’m not posting to Threads yet.)

Drug Channels has just obtained new details on the size of the 340B Drug Pricing Program. I couldn’t wait to share the news, hence this special Sunday post.

For 2022, discounted purchases under the 340B program reached a record $53.7 billion—an astonishing $9.8 billion (+22.3%) higher than its 2021 counterpart. The difference between list prices and discounted 340B purchases also grew, to $52.3 billion (+$2.6 billion).

Hospitals accounted for 87% of 340B purchases for 2022. Every 340B covered entity type experienced double-digit growth, despite drug prices that grew more slowly than overall inflation.

Another surprise: HRSA estimated that manufacturers' contract pharmacy restrictions reduced 340B purchases by only $470 million—or less than 1% of 2022's total purchases. That's far below the figure quoted by 340B lobbyists.

Once again, the data demonstrate that 340B advocates are wrong when they claim that manufacturers are “stripping critical resources from the nation’s health care safety net.” As I noted last year, only in the U.S. healthcare system can billions more in payments and spreads be considered a cut.

Read on for full details and analysis, including the opportunity to download your own copy of the raw data from HRSA.