Gross-to-Net Bubble Update: 2022 Pricing Realities at 10 Top Drugmakers (rerun)

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).

Four Crucial Questions about the Humira Biosimilar Price War (rerun)

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?

Five (or Maybe Six?) Reasons that the Largest PBMs Operate Group Purchasing Organizations (rerun)

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?

More Than a Feeling: Five Key Challenges When Walking Away From Commercial/340B Duplicate Payments

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.

Drug Channels News Roundup, September 2023: PBM Profits, Specialty Rx Markups, CVS Spending Trends, Pharmacy Pricing Secrets, and Deductibles 101

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.)

EXCLUSIVE: The 340B Program Reached $54 Billion in 2022—Up 22% vs. 2021

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.

A Clear Path to Medication Affordability Requires Meeting Patients Where They Are

Today’s guest post comes from Kristina Crockett, VP of Product Management at CoverMyMeds.

Kristina shares the story of a patient who cut pills in half to extend her prescriptions. Unfortunately, this patient didn’t know about manufacturer affordability programs.

In this article, Kristina reviews how brands can help patients make connections that address medication affordability challenges, whether at the prescriber’s office, the pharmacy, or at home.

To learn about CoverMyMeds’ medication affordability solutions that engage patients, download the CoverMyMeds white paper: Overcoming Affordability Challenges with Patient-Centered Solutions.

Read on for Kristina’s insights.

NEW: The Drug Channels 2024 Video Webinar Series

Drug Channel Institute is pleased to announce The Drug Channels 2024 Video Webinar Series.

Join Dr. Adam J. Fein for three live video webinars during 2024. These live, interactive events will be broadcast via Zoom from the Drug Channels Video studio in beautiful downtown Philadelphia.

During these events, Dr. Fein will address the latest issues confronting the U.S. drug channel. Topics will be determined based on what’s happening—trends, policy changes, company announcements, and more. He’ll share DCI’s latest market data to help you stay on top of new developments. You will be able to use these events as both a capstone of your current learning and a touchpoint for the future.

The three events are scheduled for 12:00 p.m. to 1:30 p.m. ET on the following dates:

• March 29, 2024

• June 21, 2024

• December 13, 2024 (Drug Channels Outlook 2025)

For 2024, we are offering a Corporate Pricing option that will allow larger organizations to register hundreds of colleagues for one fixed price. Please contact Paula Fein (paula@drugchannels.net) for details and custom pricing for your organization.

Read on for full details on pricing, including substantial discounts for multiple sites.

P.S. If you're not familiar with our webinars, click here to watch brief excerpts from our 2023 video webinars.

Do Plan Sponsors Understand How Their PBMs Make Money?

Today, the House Committee on Oversight and Accountability will hold a hearing with a subtle and not-at-all pejorative title: The Role of Pharmacy Benefit Managers in Prescription Drug Markets Part II: Not What the Doctor Ordered.

To help you prepare, I share fresh insights from a new survey of PBMs’ plan sponsor clients. As you will see, clients are somewhat more satisfied with the perceived transparency of smaller PBMs. However, satisfaction with transparency of the Big Three PBMs—CVS Caremark, Express Scripts, and OptumRx—is only a smidge behind smaller PBMs.

From my perspective, this counterintuitive result reflects how the PBM profit model has evolved. A plan sponsor can feel satisfied with its larger PBM’s transparency, while remaining blissfully unaware of how its PBM actually earns money. I outline some of these novel profit sources below.

Can plan sponsors get some satisfaction? Read on for what I say.

Informa Connect’s Patient Support Services Congress

Informa Connect’s Patient Support Services Congress
November 7-9, 2023 | The Inn at Penn, Philadelphia, PA
https://informaconnect.com/patient-support-services/

Exclusive Offer – Be sure to use your exclusive promo code 23DC10 to save 10% off* of your registration.

The Patient Support Services Congress is a dialogue-driven meeting that arms the industry with innovative trends and next-generation approaches to patient services for optimal performance. Showcasing high level discussions on access strategy, patient interactions, case management, compliance practices and more, this two-and-a-half-day event helps navigate complex compliance hurdles to advance and enhance your patient-oriented programs. Benefit from key stakeholder interaction, dedicated breakouts, and detailed case studies on control enhancement and operational excellence to further strengthen your programming.

Drug Channels subscribers: Save 10% off the current registration rate
with promo code 21DC10*. Register today.

In-Depth Discussions and Actionable Takeaways on Critical Topics:

• Enforcement Update – Explore Rising Oversight and High Priority Risk Areas for Patient Services Compliance
• Digitizing the Patient Services Sector – Implications of AI and Machine Learning
• Patient Data and Privacy – An Essential Component in your Support Program
• Fostering Value through Cross-Functional Collaboration

Featured Faculty Driving the Conversation:

• Peter Agnoletto, Compliance Officer, General Medicines and Consumer Healthcare, Sanofi
• Kelley Allison, Senior Vice President, US Market Access, Horizon
• Marianne Gandee, Vice President, Patient Solutions & Alliances, Pfizer
• Matt Giordano, Director of Patient Services Field Operations, Krystal Biotech, Inc.
• Tom Hiney, Privacy Counsel, Blueprint Medicines
• Matt Howatt, Assistant U.S. Attorney, U.S. Attorney’s Office for the Eastern District of Pennsylvania
• Suzanne Marinakos, Director, Patient Services Operations- Rare Disease, Novo Nordisk
• Snigdha Santra, Director, Business Insights and Strategy, Chugai Pharmaceuticals
• Kinshuk Saxena, Pharm.D., MBA, Lead Commercialization Strategy, Novartis
• Anthony Scatamacchia, Head, Patient Support Services – Innovation, Specialty Care, Sanofi
• Susan Stein, Executive Director, Head of Patient Engagement and Professional Alliances, Agenus Bio
• Donna White, Vice President, Compliance Officer, Chiesi USA, Inc.
• And so many more!

Comprehensive Content and Dynamic Features Include:

• 2.5 days of live content from industry thought-leaders
• 15+ on-demand sessions, tailored to both access and compliance
• Over 4 hours of live speaker Q&A
• AI-powered virtual networking with colleagues and counterparts
• Private meeting and chat rooms
• Access to live and on-demand content for 30 days post-event

Drug Channels subscribers — Save 10% off the current registration rate with promo code 21DC10*. Register today.

*Offer applies to current rates only and may not be combined with other offers, category rates, promotions or applied to an existing registration. Offer not valid on workshop only or academic/non-profit registrations.

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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).

How Payers Are Reacting to Insulin Price Changes

Today’s guest post comes from Nicole Mayer, Senior Analyst at MMIT.

Nicole summarizes MMIT’s research on payers’ views of two crucial market changes: (1) the Inflation Reduction Act of 2022’s requirement to cap insulin prices at $35 for Medicare beneficiaries, and (2) manufacturers’ reduction in list prices for certain insulin products. She also discusses MMIT’s research on such glucagon-like peptide 1 (GLP-1) drugs as Ozempic and Mounjaro.

Click here to learn more about MMIT’s Biologics & Injectables Index, a research series that provides unblinded payer perspectives.

Read on for Nicole’s insights.

White Bagging Update 2023: Saving Money or Shifting Costs?

Time for our annual update on the channels for provider-administered drugs.

For 2023, specialty pharmacies—via white, brown, and clear bagging—retained a meaningful share of the distribution channels for provider-administered oncology drugs. Despite the concerted efforts of insurers such as UnitedHealthcare and Elevance Health, however, buy-and-bill remains the most common channel for these products. Below, I review the latest data on trends over the past five years.

Strategies for white and brown bagging reflect the broader battle over oncology margins—and plans’ attempts to shift costs to providers, patients, and manufacturers. The persistence of buy-and-bill reflects this channel’s legacy infrastructure as well as providers’ push back on white bagging mandates. But perhaps patients and manufacturers will start paying more attention to the higher costs from white bagging.

FYI: The material in today’s article is adapted from Chapter 3 of our forthcoming 2023-24 Economic Report on Pharmaceutical Wholesalers and Specialty Distributors, now available to preorder at special introductory pricing.