Tuesday, July 30, 2019

Drug Channels News Roundup, July 2019: Amazon/PillPack, Novo Nordisk on the G2N Bubble, Copay Accumulators, and Adam's Favorite Chart

Let’s cut through the steamy summer haze with our refreshing selection of articles and insights. In this issue:
  • New details about Amazon’s PillPack deal
  • Novo Nordisk’s CEO on the gross-to-net bubble
  • Fresh data on adherence problems with copay accumulators
  • My all-time favorite chart!
Plus, I am dazed and confused by a Specialty Pharmacy Times article.

P.S. Stay current with my daily links to cool stuff at @DrugChannels on Twitter.

ON SALE! We are offering our 2018–19 Economic Report on Pharmaceutical Wholesalers and Specialty Distributors at discounts up to 30% off. Sales prices valid thru 9/3/19. The updated 2019-20 edition will be available in early October 2019.

Amazon’s Deal Making Threatened by D.C. Scrutiny, The Wall Street Journal

This Wall Street Journal article puts Amazon’s acquisition of PillPack into context. Per the article’s chart below, PillPack is far from Amazon's biggest deal.

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The article also offers some juicy details about Walmart’s dithering over PillPack: “Online pharmacy PillPack had been negotiating a deal with Walmart for months when Amazon swooped in and signed a $753 million deal within weeks of initial talks, people familiar with the deal said.” Does anyone else remember 2008, when Walmart was going to "disrupt" the pharmacy industry?

Impact of a Co-pay Accumulator Adjustment Program on Specialty Drug Adherence, The American Journal of Managed Care

Surprise? People stop taking their specialty drugs when insurers add a copay accumulator. Check out the blue line in the right-hand chart below.

[Click to Enlarge]

As I predicted in January 2018, copay accumulators create massive adherence problems. IMHO, this benefit design tool is a short-sighted way of lowering drug spending while raising overall healthcare spending.

Novo Nordisk’s Jorgensen: If it was easy to correct pricing, we would be doing it already , STAT

Read this fantastic interview with Lars Fruergaard, CEO of Novo Nordisk, about drug prices, PBM rebates, and our broken insulin pricing system. Here’s a sample quote:
“In the insulin space, there is a lot of competition. If you just take the long-acting insulins, there are five competing for market share. And the payers can challenge us. Unless we enhance rebate levels, we are kicked off a formulary. So all manufacturers are giving high rebates and those rebates go into the supply chain, where they actually are used to pay for health care.

Passing through rebates to patients would eliminate a significant part of the problem, but it’s not happening. Or I have my doubts that it will happen, because it’s been recognized that the rebates we are actually paying are being used to fund the health care system, so the money is being spent elsewhere.“
The gross-to-net bubble lives!

Chart of the day … or century?, American Enterprise Institute

Mark Perry’s thought-provoking and informative chart (reproduced below) could spur many provocative discussions. Services vs. manufacturing? Regulatory capture vs. free market? Tradeable vs non-tradeable? Lots to ponder.

[Click to Enlarge]

FYI, prescription drugs account for only 15% of the medical care inflation index. (source)

Vertical Integration in Health Care: The Next Stairway to Heaven?, Specialty Pharmacy Times

This article discusses vertical integration … using Led Zeppelin’s “Stairway to Heaven.” Pharmacist Jacqueline Hanna gets a whole lotta love from Drug Channels for her efforts. However, it makes me wonder how this article got over the hills and far away into the staid Specialty Pharmacy Times. Must have been some sort of ... communication breakdown.

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