- A Lump of Coal—Should plan sponsors be saving even more money when brands lose exclusivity?
- Anti-Stocking Stuffer—90-days supplies can be wasteful, but mail is no better (or worse) than retail
- The Ghost of Health Reform Future—A look at EHB benchmarks show skimpy coverage in some states
- Reindeer Games—Walgreen sells a small wholesale business
Focus on the Patent Cliff To Maximize Generic Savings
Here’s a fascinating behind-the-scenes look at how retail prescription prices translate into plan sponsor costs. Linda Cahn, a long-time critic of Pharmacy Benefit Managers (PBMs), advises plan sponsors on PBM contracting. She argues that PBMs are not passing through the savings from newly-launched generics. While Ms. Cahn criticizes certain PBM business practices, she also highlights the fact that payers have the opportunity to make well-informed business decisions about PBM contracts. In a free market economy, the operative lesson is Caveat Emptor (Let the buyer beware). Bigger question: Do people even need prescription insurance for generic drugs that end up costing so little?
Comparing Medication Wastage by Fill Quantity and Fulfillment Channel
You may be familiar with the NCPA’s "Waste Not, Want Not" anti-mail campaign, which argues that mail pharmacies are wasteful. The NCPA’s argument is fundamentally incomplete because the NCPA assumes near-zero waste from retail-dispensed prescriptions. In contrast, this peer-reviewed new study finds no significant wastage difference between retail or mail pharmacies for 90-day supplies. However, there was more overall waste from 90-day prescriptions in 8 of the 14 therapeutic categories. A rebuttal argues that 90-day supplies are more wasteful, regardless of channel. Ironically, the study was funded by Walgreen, which has been pushing 90 day scripts.
EHB Benchmark Formularies Vary Greatly State to State
In Prescription Drugs in CMS' New Essential Health Benefits Proposed Rule, I point out that actual pharmacy benefit design will be linked to each state’s definition of its benchmark plan. These requirements will apply to plans within health insurance exchanges as well as non-grandfathered private health insurance options in the individual and small group markets. The policy wonks at Avalere Health created an informative map showing the variation around the country. Twenty-two states will require formulary coverage for more than 90% of drugs, while twelve states will require coverage for only “45% to 76%” of all drugs. California is one of the states with the skimpiest coverage. Crazy.
L&R Distributors Acquires SAJ Distributors from Walgreens
In Shopping Spree! Walgreen Snaps Up USA Drugs, I note that Walgreen (NYSE: WAG) picked up SAJ Distributors, a small wholesaler with its acquisition of regional drugstore chain USA Drugs. Given the many rumors flying around about Walgreen’s plan for wholesaling, it’s interesting to note that Walgreen divested this small wholesaler. The move makes sense, as it would be mighty tricky for Walgreen’s to own a wholesaler that supplies competing pharmacies. Or would it?
Oppa Pharmacy Style
I suppose this video had to happen sooner or later. Credit goes to Tony Huynh and Johnny Rau. Hopefully, 2013 will see a marked reduction in Gangnam Style parody videos. Click here if you can't see the video.