Pages

Tuesday, October 30, 2018

Drug Channels News Roundup, October 2018: Amgen, Walgreens, Rite Aid’s PBM, Drug Price Ads, and Buy-and-Bill Murray

Boo! Time for my Halloween bag of Drug Channels news stories. This issue’s tricks and treats:
  • Shocking! The gross-to-net bubble for Amgen’s PCSK9 product magically vanishes—and my $0.02 appears
  • Creepy! Stefano Pessina of Walgreens Boots Alliance shares startling thoughts about Amazon, ABC, and more
  • Scary! Shareholders vote today on whether Rite Aid should amputate its PBM
  • Spooky! The Wall Street Journal conjures up a frightfully funny editorial about the drug channel
Plus, the Centers for Medicare & Medicaid Services summons Buy-and-Bill Murray for its latest foray into Part B reform.

P.S. Join the zombie horde who shamble after me at @DrugChannels on Twitter. It’s a great way to haunt me between Drug Channels articles.

Amgen Makes Repatha® (Evolocumab) Available In The US At A 60 Percent Reduced List Price, PR Newswire

Here’s another gross-to-net bubble disruption alert. Amgen will cut the Wholesale Acquisition Cost (WAC) list price of its Repatha product by 60%. The new list price will therefore reflect the post-rebate net cost of this therapy.

This is a huge pro-patient move, especially for those whose coinsurance and deductibles expose them to the artificial, pre-rebate list price.

Here are three crucial differences between Amgen’s move and the Gilead strategy, which I highlighted in last month’s news roundup:
  • Amgen is launching a new National Drug Code (NDC) for the lower-list-price version. Repatha will therefore remain a brand-name drug and likely continue to move through brand distribution channels.
  • Repatha will no longer be considered a specialty tier drug in Medicare Part D. That’s because its monthly list price of $487.50 will fall below the $670 specialty tier eligibility threshold for a Part D plan. A potential downside: plans may prefer competitor Praulent, which (for now) remains a specialty tier product and therefore has tighter utilization management.
  • The higher-priced NDC will be discontinued in 2020. This presumably provides an opportunity for pharmacy benefit managers (PBMs) to restructure any rebate guarantees with plan sponsors. It will also test whether PBMs and plans truly prefer a low list-price over a high-list/high-rebate product.
So, which manufacturer will become the next to reduce a list price?

Walgreens CEO Says Pharmacy Chain Will Survive Amazon Threat, Bloomberg

Here’s a must-read interview with Stefano Pessina, our global channels overlord and executive vice chairman and chief executive officer of Walgreens Boots Alliance (WBA). A few topics that caught my eye:
  • Amazon: “We’ll adapt.”
  • Vertical integration: “We should have bought an insurance company four years ago…”
  • AmerisourceBergen: “[W]e control them strategically.” (Has anyone told Steve Collis?)
For a deep dive into the WBA-ABC relationship, see Section 7.3.2. of our new 2018–19 Economic Report on Pharmaceutical Wholesalers and Specialty Distributors.

October Surprise: Rite Aid Shareholders Propose Worthy Spin-Off At Annual Meeting, Forbes

A few weeks ago, I wondered: Does Rite Aid Have the Grit to Succeed With Its EnvisionRx PBM Business?

At today’s annual meeting, shareholders will have the opportunity to vote on the “Weiss Proposal.” Page 75 of the proxy statement summarizes the three components of this proposal:
“(1) divest and spin off 80% of its EnvisionRx subsidiary as a separately traded public company, (2) transfer up to one third of its outstanding corporate debt to the spun-off EnvisionRx and (3) distribute a special dividend to existing stockholders.”
The proposal seems like a long shot, but shareholders are not happy with management. Check @DrugChannels for my tweet about the results. (UPDATE: See comment below.)

Trump’s Drug Price Bust, The Wall Street Journal

Here’s an excellent—and surprisingly witty—Wall Street Journal editorial about the U.S. Department of Health & Human Services plan to advertise drug list prices. A few choice quotes:
"More broadly, drug costs are roughly 14% of health spending but absorb about 99% of public attention."

“Pharmaceutical companies are annoyed that the middlemen drive steep rebates and pocket some of the difference. The benefit managers complain that pharmaceutical companies are villains with huge profit margins. Congrats, you’re both wrong.”
Secretary of Health and Human Services Alex Azar responded with this letter: Drug-Price Transparency Helps Consumers

Medicare Program; International Pricing Index Model for Medicare Part B Drugs, Centers for Medicare & Medicaid Services

Strange but true! Page 8 of the Federal Register notice for last week’s Medicare Part B ANPRM featured an image and link to this 2016 Drug Channels post. It prominently features none other than Buy-and-Bill Murray!

FYI, we offer updated information on the buy-and-bill market in Sections 3.1. and 3.2. of our new 2018–19 wholesale report.

No comments:

Post a Comment