Analysis

For 2023, the three largest pharmacy benefit managers (PBMs)—Caremark (CVS Health), Express Scripts (Cigna), and OptumRx (United Health Group)—have again increased the number of drugs they exclude from their standard formularies.

Each exclusion list now contains about 600 products. Growth in the number of excluded drugs slowed for the second year, due partly to the fact that so many drugs have already been dropped from PBMs’ formularies.

Below, I highlight four takeaways from this year’s lists, including a look at biosimilar insulin and the forthcoming biosimilar competition for Humira. I also note some troubling research on the patient impact of exclusions—although much remains unknown.

As always, I welcome your comments below or on social media.

Posted by Drug Channels Institute, an HMP Global company on Tuesday, January 10, 2023

Labels: Biosimilars, Benefit Design, Specialty Drugs, PBMs

Time for the Drug Channels annual reality check on drug pricing. The data once again tell a different story than you might read in your favorite politician’s Twitter feed or misleading news reports.

For 2022, brand-name drugs’ net prices dropped for an unprecedented fifth consecutive year. What’s more, after adjusting for overall inflation, brand-name drug net prices plunged by almost 9%.

The factors behind declining drug prices will remain in the coming years—and become even stronger due to forthcoming changes in Medicare and Medicaid. Employers, health plans, and PBMs will determine whether patients will share in this ongoing deflation.

Read on for details and make up your own mind. And please pass the news along to the drug pricing flat earthers (#DPFE) who refuse to accept that brand-name drug prices are falling—or that prescription drug spending is a small and stable portion of overall U.S. healthcare expenditures.

Even a purple gorilla professor understands these facts.

Posted by Drug Channels Institute, an HMP Global company on Wednesday, January 4, 2023

Labels: Gross-to-Net Bubble, Costs/Reimbursement, Industry Trends, Health Care Policy, PBMs

Whew. It was quite a year—one filled with big deals, big news, and big legislation.

Drug Channels also had a big 2022. We now have 35,000 LinkedIn followers, almost 25,000 email subscribers, and nearly 16,000 Twitter followers.

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.

Wishing you and your family health and happiness,
Adam

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Ring in 2023 with our final news roundup of the year:

• A vertical integration update

• Walgreens backs away from prescriptions

• Meet a cash-pay pharmacy that’s not owned by a billionaire

• Time to cure or kill 340B?

Plus, Dr. Glaucomflecken helps you celebrate “I met my deductible” season!

Posted by Drug Channels Institute, an HMP Global company on Tuesday, December 20, 2022

Labels: Mergers and Acquisitions, 340B, PBMs, Pharmacy Economics

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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. To find out how you can promote an event on Drug Channels, please contact Paula Fein (paula@drugchannels.net).

Posted by Drug Channels Institute, an HMP Global company on Monday, December 19, 2022

Labels: Sponsored Post

This week, I’m rerunning some popular posts while I prepare for today’s live video webinar: Drug Channels Outlook 2023.

ICYMI, the Health Resources and Services Administration (HRSA) finally got tired of my Freedom of Information Act (FOIA) requests. Shortly after I published the article below, HRSA posted public data about 340B covered entity purchases on its website. Alas, HRSA neglected to post any historical data. Fortunately, my 2022 FOIA efforts (described below) extracted purchases by 340B covered entity type for 2015 through 2021.

Click here to see the original post and comments from August 2022.

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Here’s a summer surprise for fans of the 340B Drug Pricing Program: Drug Channels has just obtained the 2021 figures from the Health Resources and Services Administration (HRSA)! Even better, my Freedom of Information Act (FOIA) request was able to pry out detailed purchases by covered entity type.

The data tell a familiar story. For 2021, discounted purchases under the 340B program reached a record $43.9 billion—an astonishing $5.9 billion (+15.6%) higher than its 2020 counterpart. Hospitals accounted for 87% of these skyrocketing 340B purchases.

What’s more, the difference between list prices and discounted 340B purchases also grew, to $49.7 billion (+$7.0 billion). This figure approximates the money collected by 340B covered entities.

340B advocates have been screaming that “drug companies are cutting 340B,” but the data tell a very different story. 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 very own copy of the raw data from HRSA.

Posted by Drug Channels Institute, an HMP Global company on Friday, December 16, 2022

Labels: Gross-to-Net Bubble, Hospitals, 340B, Health Care Policy, Industry Trends, Pharmacy

This week, I’m rerunning some popular posts while I prepare for tomorrow’s live video webinar: Drug Channels Outlook 2023.

Click here to see the original post and comments from October 2022.

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Last month, IQVIA quietly released a fascinating new report on discount cards. (Link below.) The research was sponsored by the Association for Accessible Medicines (AAM).

Below, I highlight three unexpected findings from the data regarding GoodRx’s market position, when people use discount cards, how much they save, and why PBMs should still be worried about this market.

There’s a lot to unpack about the growing discount card market. As you’ll see, this report provides valuable insights about a market that seems stacked against patients.

Posted by Drug Channels Institute, an HMP Global company on Thursday, December 15, 2022

Labels: Costs/Reimbursement, Discount Cards, Benefit Design, Pharmacy, PBMs, Pharmacy Economics

This week, I’m rerunning some popular posts while I prepare for tomorrow's live video webinar: Drug Channels Outlook 2023.

In the four months since I published the article below, the issues with alternative funding programs have hit the mainstream press. Check out last week's article from Kaiser Health News: Employers Use Patient Assistance Programs to Offset Their Own Costs.

Click here to see the original post and comments from August 2022.

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Watch out! Plan sponsors are getting even bolder in their attempts to grab financial support intended for patients. The latest scam is called a specialty carve-out.

Here’s the game: A commercial plan eliminates coverage for all specialty drugs. Beneficiaries are then shunted over to a charitable foundation, because they are now disguised as uninsured—at least for specialty drugs. Naturally, the vendor skims a healthy share of the charity’s money.

In addition to the ethical and compliance issues, some vendors raise safety risks by sourcing prescriptions from non-U.S. pharmacies as a backup.

The Orwellian euphemism for this “benefit” design: alternative funding program.

A new survey reveals that an astounding four out of 10 commercial plans are already using, or exploring the use of, these specialty carve-out programs. Yikes.

Read on for an overview of these shady programs—and the many problems they are creating.

Posted by Drug Channels Institute, an HMP Global company on Wednesday, December 14, 2022

Labels: Alternative Funding Programs (AFPs), Co-pay Offset Programs, Costs/Reimbursement, Benefit Design, Specialty Drugs

This week, I’m rerunning some popular posts while I prepare for this Friday’s live video webinar: Drug Channels Outlook 2023.

Click here to see the original post and comments from August 2022.

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Over the weekend, the U.S. Senate passed a massive overhaul of the Medicare Part D program. If passed into law, these changes will have many unintended consequences, but will not address the warped incentives baked into our current rebate system.

This makes it a good time to review the murky, little-seen economics of how commercial plan sponsors and payers access the billions of dollars in manufacturer rebates and fee that are negotiated by their pharmacy benefit managers (PBMs).

Our analyses of new Texas-mandated PBM disclosures reveal that plan sponsors receive most of the rebates, fees, and other payments from manufacturers. However, PBMs retain an unexpectedly large share of these payments—while the patients whose prescriptions generated these funds get almost nothing.

In other words, plans spread around manufacturers’ rebates and fees to offset premiums for all beneficiaries, rather than lower out-of-pocket costs for drugs that plans buy at a discounted price. Perhaps Congress will someday get around to corralling these funds.

Posted by Drug Channels Institute, an HMP Global company on Tuesday, December 13, 2022

Labels: Gross-to-Net Bubble, Costs/Reimbursement, Benefit Design, PBMs

This week, I’m rerunning some popular posts while I prepare for this Friday’s live video webinar: Drug Channels Outlook 2023.

Click here to see the original post and comments from September 2022. During Friday’s webinar, I’ll be sharing my updated thoughts about the IRA’s impact on manufacturers, Part D plans, and patient behavior.

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By now, you have already read innumerable articles explaining what’s in the new Inflation Reduction Act of 2022 (IRA; P.L. 117-169).

Today, I want to highlight three significant—and presumably unintended—drug channel consequences from the hastily-passed IRA legislation. These include disruption to the now-booming biosimilar market, the prospects of physician/hospital vertical integration that will raise commercial healthcare costs and expand 340B, and the need for complex new processes to administer the IRA's lower pharmacy reimbursements.

I can only barely scratch the surface in this article, so feel free to share your own thoughts in the comments below or on social media.

At this point in our country’s history, you might think Congress would have learned the immutable law of 730-page bills: Legislate in haste, repent at leisure.

Posted by Drug Channels Institute, an HMP Global company on Monday, December 12, 2022

Labels: Biosimilars, Hospitals, Health Care Policy, 340B, Physicians, Pharmacy, Inflation Reduction Act of 2022, Buy-and-Bill, Medicare Part D

Today’s guest post comes from Leslie Small, Managing Editor, and Jinghong Chen, Reporter, at Health Plan Weekly, published by AIS Health, the journalism division of Managed Markets Insight & Technology, LLC. (MMIT).

Leslie and Jinghong discuss the terms of health insurance startups CEOs’ compensation packages. They explain why the reported CEO total compensation numbers are deceiving.

Access the full findings from AIS’ Healthcare Executive Compensation Survey here.

Read on for Leslie’s and Jinghong’s insights.

Posted by Drug Channels Institute, an HMP Global company on Friday, December 9, 2022

Labels: Guest Post, Sponsored Post