Drug Channels delivers timely analysis and provocative opinions on pharmaceutical economics and the drug distribution system. It is written by Adam J. Fein, Ph.D., one of the country's foremost experts on pharmaceutical economics and channel strategy. Drug Channels reaches an engaged, loyal and growing audience of more than 22,000 subscribers. Learn more...

Monday, August 20, 2018

CBI’s 13th Annual Value-Based Oncology Management Summit

CBI’s 13th Annual Value-Based Oncology Management Summit
October 10-11, 2018 | Scottsdale, AZ
www.cbinet.com/VBO

As cancer care costs continue to soar, innovations in oncology care management and payer-provider payment reform remain a critical imperative for key stakeholders. Now in its 13th year, CBI’s Value-Based Oncology Management Summit convenes payers, providers, PBMs, manufacturers and specialty pharmacies to examine current trends/challenges and share best practices to control costs, reduce variation in care and improve patient outcomes.

Drug Channels readers will save $400 off the standard registration rate when they use discount code FZK768*
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In-Depth Sessions and Discussions Include:
  • Demystify current trends in value-based oncology payment and reimbursement models
  • Examine the future of (CAR)-T cell therapy and cost effectiveness
  • Explore the use of biosimilars in cancer treatment – Consider how biosimilars contribute to treatment options, efficiencies and expanded access to cancer therapies
  • Assess the impact of oncology value partnerships with managed care plans
  • Leverage real-world data and observational insights to understand and assess value-based care performance
  • Advance palliative care models – Empower patients to make informed treatment decisions

Visit www.cbinet.com/VBO for more information, or download the full agenda today. Drug Channels readers will save $400 off the standard registration rate when they use discount code FZK768*.

*Discount expires October 10, 2018; applies to standard 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.


The content of Sponsored Posts does not necessarily reflect the views of Pembroke Consulting, Inc., Drug Channels, or any of its employees.

Thursday, August 16, 2018

2019 Express Scripts Formulary Exclusions: Hepatitis C Changes Show Why the Drug Channel Must Change, Too

Last week, Express Scripts released the 2019 updates to its formulary exclusion lists. They are available below for your downloading pleasure. Unfortunately, CVS Health won’t release its list until October.

For 2019, Express Scripts was more aggressive than ever, expanding its list to more than 240 excluded products. For the first time, it excluded products in two specialty categories: HIV antiretrovirals and Factor VIII recombinant products. It also added a new exclusion in multiple sclerosis.

Oddly, Express Scripts has made a patient unfriendly change to the hepatitis C category. It has excluded AbbVie’s Mavyret, the market share leader with a low list price. Instead, it added Merck’s Zepatier, whose list price was recently cut but can’t treat all types of hepatitis C. Consequently, the 2019 preferred formulary will force at least one in four patients to use the products with high list prices and high rebates. Many patients will end up incurring much higher out-of-pocket costs. Incredibly, Express Scripts advocates copay cards as a fix!

To me, the hepatitis C formulary change are further evidence of the warped incentives of our gross-to-net bubble. Payers benefit from a low net price, and PBMs gain from high list prices with high rebates (though less than we once thought). Meanwhile, patients get stuck making out-of-pocket payments based on the higher list price. Is this any way to run a drug channel?

Tuesday, August 14, 2018

New Disclosures Show CVS and Express Scripts Can Survive in a World Without Rebates. Are Plan Sponsors Now the Real Barrier to Disruption?

Last week, the two largest pharmacy benefit managers (PBMs)—CVS Health and Express Scripts—both stated that rebates now account for a small part of their profits. The companies therefore strongly implied that they could survive in a world in which PBMs did not participate in the flow of funds from a brand-name manufacturer to a plan sponsor. Below, I unpack the new disclosures, which move us materially closer to a new model.

Hmm. The two biggest PBMs and at least one major manufacturer (Pfizer) have now implied a willingness to change. So what’s to stop massive drug channel disruption?

CVS Health perhaps inadvertently identified the real barrier to a system without rebates: employers and health plans. As you will see below, CVS Health disclosed for the first time the massive gross-to-net bubble within its commercial book of business. The new information confirms that plan sponsors are hoarding rebates rather than sharing the savings with the employees whose prescriptions generated the rebate funds.

If we really do migrate to a system without rebates, PBMs’ reportedly minimal profits from rebates mean they could escape drug channel disruption unscathed. The focus will now turn to the plan sponsors that are absorbing rebate dollars. Whether plan sponsors realize it or not, they are the next target.

Monday, August 13, 2018

CBI’s Life Sciences Outcomes-Based Contracting Summit

CBI’s Life Sciences Outcomes-Based Contracting Summit
October 3-4, 2018 | Philadelphia, PA
www.cbinet.com/OutcomesContracting

Exclusive Offer for Drug Channels Readers:
Register Now to SAVE $400* using discount code OUT400

CBI’s 3rd Annual Life Sciences Outcomes-Based Contracting Summit is the ideal platform to discuss best practices for value optimization and price alignment with health outcomes data and provides critical strategies into the process of outlining, structuring and negotiating risk-sharing agreements between bio/pharma manufacturers and payers.

This timely event will address the continuous challenges the industry faces to lower drug costs and increase patient access, all while demonstrating the value of their drugs to insurers by providing best practices and key insights from thought-leaders regarding the nuances surrounding outcomes-based contracting.

Gain critical insights from distinguished speaking faculty, including those representing AstraZeneca, Novartis Pharmaceutical Corporation, Aetna, University of Portsmouth, Center of Medicine in the Public Interest, BeiGene, Ltd., University of Washington Medicine Health System, Bristol-Meyers Squibb and more.

Join CBI for Solutions-Oriented Sessions, Powerful Payer Insights and Illuminating Case Studies:
  • Overview of over 60 published outcomes-based innovative contracts
  • Pinpoint how AstraZeneca and Aetna have succeeded in creating outcomes-based contracts
  • Explore new conditional reimbursement models with real-world versus real-time performance data
  • Implement contracts to define, measure, report and create payment mechanisms for value-based arrangements
  • Hear how payers perceive value-based agreements that involve rebates versus those with refunds
  • And more!
  • Plus, join us for the Pre-Conference Workshop: Playbook for the Construction & Deployment of Outcomes-Based Innovative Contracting
Download the complete agenda, then register using promo code OUT400 to receive $400 off* the standard rate.

 *Expires 10/2/18; applies to standard rate only and cannot be combined with other offers or applied to existing registration.


The content of Sponsored Posts does not necessarily reflect the views of Pembroke Consulting, Inc., Drug Channels, or any of its employees.

Friday, August 10, 2018

Redefining Digital Health: How a Different Approach Can Get Manufacturers Closer to Patients

Today’s guest post comes from Mary Roberts, Vice President of Business Development at EnvoyHealth, a subsidiary of Diplomat.

Mary describes the next generation of patient services and explains how manufacturers can use new digital health tools to get closer to patients.

Visit envoyhealth.diplomat.is/innovative to learn more about using technology to enhance patient services and differentiate brands.

Read on for Mary’s insights.

Wednesday, August 08, 2018

Still Possible: Hospitals Overcharge Health Plans for Specialty Drugs

Over the years on Drug Channels, I have explained the two primary reasons a drug’s list price doesn’t reflect what a third-party payer actually spends for that drug: (1) channel intermediaries and providers add markups that account for the costs, profits, and value of the services, and (2) manufacturers provide rebates and discounts to third-party payers.

Two recently-released reports confirm the often-overlooked magnitude of provider markups.

As you will see below, commercial payers use reimbursement approaches that permit hospitals to inflate specialty drug costs by thousands of dollars per claim when compared with physician offices. This is not about differences in patient care. It’s about hospitals adding big markups to drug costs.

Meanwhile, commercial insurers complain about “drug prices,” going so far as to publish misleading data about drug spending. Yet insurers conveniently forget to mention their own role in allowing powerful providers inflate drug spending. As evidenced by the proposed outpatient prospective payment system (OPPS) rule, the Secretary (of Health and Human Services) does not disavow any knowledge of site-neutral payments.

Monday, August 06, 2018

CBI's West Coast Real-Time Benefit Check & ePrior Authorization Summit

West Coast Real-Time Benefit Check & ePrior Authorization Summit
October 17-18, 2018 | San Francisco, CA
www.cbinet.com/eBenefit

CBI’s West Coast Real-Time Benefit Check & ePrior Authorization Summit convenes stakeholders, including manufacturers, specialty pharmacies, PBMs, health plans, solution providers and prescribers to discuss and share best practices regarding electronic patient service technology and speed to therapy. With constant innovations in electronic patient services (ePA, FHIR, HL7, RTPBI), the integration and implementation of this technology is imperative to drive patient access to therapy.

Join the conversation and participate in open discussions with your peers to discuss workflow improvements, firsthand experiences with system integration and the latest advancements in ePA and RTBC. Drug Channels readers will save $400 off the standard registration rate when they use discount code SGK838.*

Critical Topics for Peer-To-Peer Benchmarking:
  • Discuss clinical and operational factors to consider when implementing portal PA solutions with medical specialty drugs
  • Hear how to streamline electronic benefit verifications and prior authorization solutions into a hub model
  • Examine how to configure interoperability in a local/regional health setting and recent efforts within the FHIR/HL7 standards
  • Understand how to work more efficiently between specialty pharmacies, providers and payers to manage patient therapy
  • Discuss alert fatigue, additional clicks, and how to avoid prescriber burnout
  • Address considerations for enrollment standards in hubs and specialty pharmacies

Visit www.cbinet.com/eBenefit for more information, or download the full agenda today. Drug Channels readers will save $400 off the standard registration rate when they use discount code SGK838*

*Discount expires October 17, 2018; applies to standard 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.


The content of Sponsored Posts does not necessarily reflect the views of Pembroke Consulting, Inc., Drug Channels, or any of its employees.

Thursday, August 02, 2018

A System Without Rebates: The Drug Channels Negotiated Discounts Model

Are you ready for a world without rebates?

In June, Alex Azar, Secretary of the U.S. Department of Health & Human Services (HHS), summarized his long-range vision for a new drug channel system:
“[W]e may need to move toward a system without rebates, where PBMs and drug companies just negotiate fixed-price contracts. Such a system’s incentives, detached from artificial list prices, would likely serve patients far better.” (emphasis added)
No one has yet explained what a system without rebates would look like.

To facilitate the discussion, I have sketched out a possible new drug channel system that would:
  • Respond to the HHS vision for a “system without rebates”
  • Remove/decrease the reliance on list price as a component of intermediary compensation
  • Use negotiated discounts as an alternative to the current system of retrospective rebates
  • Require manufacturers to negotiate for desirable market access
You can download The Drug Channels Negotiated Discounts Model below.

Please note that I am not advocating for this approach. I am merely exploring one way that a system without rebates could be implemented. I hope you find it helpful for your strategic planning.

As always, I welcome feedback on how to improve and refine this model. Either leave comments below or email me. Enjoy!