Hey, did you hear about the Supreme Court’s decision on the Patient Protection and Affordable Care Act (ACA) Yeah, I thought so.
I won’t rehash the constitutional issues. As long-time readers know, I think the ACA is messy, inelegant legislation with enormous unintended consequences. Nonetheless, it’s the law of the land (for now), so let’s review what it means for drug channel participants.
- Pharmacy Benefit Managers (PBMs) will gain from the expanded coverage and the launch of biosmiliars. The “transparency” requirements should not be material.
- Retail pharmacies will benefit from increased prescription volume and various legislative “fixes,” but face margin risk as the uninsured get the advantage of third-party bargaining power.
- Drug wholesalers will benefit from increased volume, although pharmacies’ generic margin pressure will flow up the channel.
- For pharmaceutical manufacturers, the gains from increased prescription volume and expanded coverage are offset by new fees and higher rebates. The impact of biosimilars depends on whether your company is facing biosimilar competition, or planning to become a biosimilar competitor.