Thursday, April 26, 2018

Drug Channels News Roundup, April 2018: Copay Accumulators, Express Scripts, Pharmacy Pricing, Amazon, and Almost-Pharmacist Jack Nicklaus

Baseball season is finally here! Oil up your glove, lace up your cleats, and let's run the bases around this month's news stories. Remember: Sometimes you win, sometimes you lose, and sometimes it rains.

In this issue:
  • Green Monster: The drug manufacturers that are most vulnerable to copay accumulators
  • Pop Fly: Express Scripts wants to pop the gross-to-net bubble?
  • Foul! Fresh evidence that uninsured consumers pay rip-off cash prices at retail pharmacies
  • Strikeout: My $0.02 on Amazon’s decision not to sell drugs to hospitals
Plus, from the diamond to the green: the secret pharmacy history of golf legend Jack Nicklaus.

P.S. For my daily pitches on the industry’s hits and misses, follow @DrugChannels on Twitter. My recent tweets have covered copay accumulators, the oncology market, drug costs, biosimilars, PBMs, and more.

Which drug makers are most vulnerable to a new cost-shifting maneuver?, Pharmalot/STAT

In January, I predicted growth and controversy in 2018 for copay accumulator adjustment programs. See my overview in Copay Accumulators: Costly Consequences of a New Cost-Shifting Pharmacy Benefit.

Wall Street analysts are now forecasting how accumulators will affect pharmaceutical manufacturers. Ronny Gal of Bernstein projects that by the end of 2018, half of self-insured employer plans will use accumulator adjustment programs. Richard Evans of Sector & Sovereign Research identifies the five manufactures at greatest risk as AbbVie, Actelion Pharmaceuticals, Amgen, Gilead Sciences, and UCB. Heads up!

Express Scripts targets Amgen, Lilly migraine drugs in pricing shift, Reuters

Well, pierce my ears and call my drafty. Apparently, Express Scripts is pressing manufacturers of new migraine drugs to “to forego the usual strategy of setting a high U.S. list price, then lowering the cost for health plans through hefty rebates.”

Coincidentally, this Reuters article was published on the same day as The Gross-to-Net Bubble Topped $150 Billion in 2017.

Here's a surprising comment from Steve Miller, chief medical officer of Express Scripts:
“If your expectation is that you are not going to actually get that high list price, then don’t do that to patients who have high co-pays. Let’s be more balanced. Let’s get back to where gross-to-net is not so different.”
SpongeBob warily approves. Now let’s see what really happens.

Kmart Pharmacy Lowered Its Prices. Why Don't Others?, Consumer Reports

Last week, I analyzed Consumer Reports’ survey of pharmacies’ cash prices for five common generic drug prescriptions. See Why Retail Pharmacies Still Overcharge Uninsured Patients—And What That Means for Amazon.

Intrepid reporter Lisa Gill has just published a follow-up article in the magazine. She finds that uninsured consumers often do pay the quoted cash price. The article also describes disturbing variations in price quotes, even when the price comes from different locations within the same chain. As she notes: “CR shoppers can testify that shopping around for prescription drugs can indeed save you money. But it can also be confusing, unpredictable, and potentially expensive.” Very troubling.

Amazon has shelved a plan to sell drugs to hospitals, and insiders say there are two reasons why, CNBC

I can’t omit the biggest news from last week: The mighty Amazon has decided that selling and distributing pharmaceutical products actually isn’t easy. My Twitter followers saw the Dude's reaction on the right.

Regular readers know that I have been skeptical of the overblown Amazon hype. Check out my articles from May (A Reality Check on Amazon’s Pharmacy Ambitions) and November (The Latest on Amazon’s Pharmacy Ambitions—And a Possible Express Scripts Collaboration).

I still believe that Amazon will enter the pharmacy industry, per my observations last week about the cash-pay prescription market. I would never underestimate Amazon, but its impact will take longer and be less disruptive than many people seem to believe.

Jack Nicklaus on the Ohio Neighborhood Where He Fell in Love With Golf, The Wall Street Journal

Today's fun pharmacy fact: Jack Nicklaus's father was an independent pharmacy owner. Before becoming a professional golfer, Nicklaus had been studying to be a pharmacist. You don’t say!

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