Tuesday, April 27, 2021

Drug Channels News Roundup, April 2021: Cigna’s $500 Gift, 340B & Specialty Pharmacy, GoodRx Deep Dive, and U.S. Drug Pricing Policy

While we all roll up our sleeves for a full reopening, let’s spring into this month’s selection of noteworthy news:
  • Thoughts on Cigna’s payments to patients for non-medical switching
  • 340B’s explosive specialty pharmacy growth
  • An excellent analysis of GoodRx
Plus, my $0.02 on U.S. drug pricing policy.

P.S. Join the more than 11,600 followers of my daily links to neat stuff at @DrugChannels on Twitter. Recent posts have covered biosimilars, pharmacist workloads, formularies, pricing, PSAOs, Part D spending, copay accumulators, H.R.3, and more. You can also join my more than 17,000 followers on LinkedIn.

Cigna Dangles $500 to Persuade Patients to Switch Psoriasis Drugs, AJMC

ICYMI, patients in certain Cigna health plans are being offered $500 to switch from Novartis’s Cosentyx to Eli Lilly’s Taltz. The move is prompted by exclusions on the Express Scripts 2020 formulary, which I explained in The Big Three PBMs Ramp Up Specialty Drug Exclusions for 2021.

Inducing non-medical switching with a direct-to-patient cash incentive is quite rare—and perhaps unprecedented. It raises crucial questions:
  • Why is Cigna using a debit card (cash) rather than relying on the more typical benefit design strategies?
  • What happens to a patient if the Express Scripts formulary shifts back to Cosentyx for 2022?
  • Will patients who change plans and/or change jobs be forced to switch again?
More than 60 patient advocacy organizations have sharply criticized Cigna’s strategy, writing in part: “This non-medical advice, paired with a financial incentive for the express purpose of moving a stable patient to a different drug, circumvents shared decision-making in the provider-patient relationship and undermines the doctor’s advice on what medicines and treatments are best.”

Ronny Gal at Bernstein argues that this move is a “general rehearsal for Humira” in 2023.

Seems plausible to me. Get ready for a wild few years in the specialty channel.

Growth of the 340B Program Accelerates in 2020, IQVIA

The 340B Drug Pricing Program continues to expand much more quickly than the overall pharmaceutical market. According to IQVIA’s latest report, the list price value of 340B purchases reached $80 billion in 2020. That equates to about 12% of the total U.S. market—and roughly 20% of the gross-to-net bubble for brand-name drugs. (See Exhibit 168 of our 2020 Economic Report on U.S. Pharmacies and Pharmacy Benefit Managers.)

Even more astonishing: 340B sales through mail pharmacies grew by 55% in 2020! (See the chart below.) This growth translates into mega-profits for PBM-owned specialty pharmacies, as I explain in How Hospitals and PBMs Profit—and Patients Lose—From 340B Contract Pharmacies.

[Click to Enlarge]

Manufacturers should be very nervous about these figures. Without further action, growth will continue with no apparent upper limit.

GDRX:NASDAQ, The 10th Man

I highly recommend this deep dive into GoodRx and its business. It provides a solid overview of many key drug channel industry issues, while also explaining how GoodRx profits from this system.

My perspectives are here:

My $0.02 on U.S. drug pricing policy
, @DrugChannels

The political rhetoric around drug pricing continues to escalate.

Unfortunately, it’s hard to have sensible policy conversations about "drug pricing” when politicians won't or can't distinguish between:
  1. A drug's list price
  2. A drug's net cost to a payer/PBM after rebates and discounts
  3. The percentage of a prescription's net cost that a patient pays out-of-pocket
I shared this sentiment on social media over the past weekend. As of this morning, it has received 140 likes on Twitter and 340 reactions on LinkedIn. Looks like many people feel the same as I do.

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