- Health inequities in utilization management
- Insurers compute big white bagging savings
- The biosimilar boom accelerates
- The patient upside of manufacturers’ copay support
- Whoa. CVS Health takes the red pill.
Patient Experience Survey, November 30 – December 18, 2021, PhRMARegister for my new video webinar, PBM Industry Update: Trends, Controversies, and Outlook. This event will be broadcast live on April 22, 2022, from 12:00 p.m. to 1:30 p.m. ET.
Utilization management (UM) refers to pharmacy benefit management services that directly influence prescriptions at the point of dispensing. As I discuss in Section 5.1.5. of our new 2022 Economic Report on U.S. Pharmacies and Pharmacy Benefit Managers, plans and their PBMs can (in theory) implement effective and appropriate prior authorization and utilization management practices.
However, these practices seem to have a greater impact on certain underserved populations. According to a PhRMA-sponsored patient survey, utilization management and prior authorization disproportionately affect communities of color and those with mental health conditions. The survey doesn’t delve into the factors behind these troubling results.
Also troubling: According to a separate American Medical Association survey, one in three physicians reports that prior authorization (PA) has led to serious adverse events for patients.
However, these practices seem to have a greater impact on certain underserved populations. According to a PhRMA-sponsored patient survey, utilization management and prior authorization disproportionately affect communities of color and those with mental health conditions. The survey doesn’t delve into the factors behind these troubling results.
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Also troubling: According to a separate American Medical Association survey, one in three physicians reports that prior authorization (PA) has led to serious adverse events for patients.
Hospital Price Hikes: Markups for Drugs Cost Patients Thousands of Dollars, AHIP
In White Bagging Update: PBMs’ Specialty Pharmacies Keep Gaining on Buy-and-Bill Oncology Channels, I showed how specialty pharmacies—via white, brown, and clear bagging—continue to displace buy-and-bill distribution channels for provider-administered drugs.
The new AHIP study linked above quantifies the payers’ savings from white bagging. Compared to a specialty pharmacy, a payer’s costs for a single treatment of a provider-administered drug averaged $7,000 more in a hospital and $1,400 more at a physician office. Here are the detailed markup data from the study:
White bagging eliminates the need to control hospital markups by absorbing the specialty drug distribution into vertically integrated insurer/PBM/specialty pharmacy/provider organizations that now dominate U.S. drug channels.
Hospitals are pushing back against payers and have slowed the growth of white bagging. However, hospitals conveniently forget that white bagging would not happen if their drug mark ups were not so outrageous.
The battle for the specialty patient continues...
The new AHIP study linked above quantifies the payers’ savings from white bagging. Compared to a specialty pharmacy, a payer’s costs for a single treatment of a provider-administered drug averaged $7,000 more in a hospital and $1,400 more at a physician office. Here are the detailed markup data from the study:
[Click to Enlarge]
White bagging eliminates the need to control hospital markups by absorbing the specialty drug distribution into vertically integrated insurer/PBM/specialty pharmacy/provider organizations that now dominate U.S. drug channels.
Hospitals are pushing back against payers and have slowed the growth of white bagging. However, hospitals conveniently forget that white bagging would not happen if their drug mark ups were not so outrageous.
The battle for the specialty patient continues...
2022 Cardinal Health Biosimilars Report: The U.S. Journey and Path Ahead, Cardinal Health
Check out this great biosimilar report from Cardinal Health. As you can see from the report’s Figure 2 (reproduced below), the biosimilar boom is real. Adoption is growing, while prices are dropping. You may recall that I highlighted this potential growth in October 2020.
However, the survey also highlights some disturbing trends that are holding back biosimilar adoption. Physician survey data show many providers are still not prescribing biosimilars, while some payers are not covering lower-cost products.
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However, the survey also highlights some disturbing trends that are holding back biosimilar adoption. Physician survey data show many providers are still not prescribing biosimilars, while some payers are not covering lower-cost products.
The Patient Impact of Manufacturing Copay Assistance in an Era of Rising Out-of-Pocket Costs, Tomas J. Philipson and Troy Durie, University of Chicago
Check out this important research highlighting some often overlooked benefits of manufacturers’ copay support.
Because of today’s benefit designs, some patients have very high out-of-pocket expenses, particularly for fourth-tier and specialty drugs. Since these amounts can reach thousands of dollars, they often end up being partially or fully paid by the manufacturers of the brand-name drugs.
As we all know, reducing cost-related non-adherence increases prescription utilization. The authors of the white paper linked above estimate how this improved utilization raises patients’ health outcomes, noting:
Because of today’s benefit designs, some patients have very high out-of-pocket expenses, particularly for fourth-tier and specialty drugs. Since these amounts can reach thousands of dollars, they often end up being partially or fully paid by the manufacturers of the brand-name drugs.
As we all know, reducing cost-related non-adherence increases prescription utilization. The authors of the white paper linked above estimate how this improved utilization raises patients’ health outcomes, noting:
“[W]e find that copay assistance closed important affordability gaps, increasing utilization by 4.8 to 16.7 percent which in turn raised health outcomes by 1.0 to 3.3 percent. This evidence suggests that the affordability and access copay assistance provides has substantial benefit to the patients receiving them in today’s environment of rising overall out-of-pocket expenses.” (emphasis added)Too often, I see copay support discussions that focus only on costs. As this paper shows, it’s also crucial to consider patients’ health outcomes.
CVS files to trademark its pharmacy and health clinics in the metaverse, CNBC
Hmm. This CNBC article links to CVS Health’s trademark application, which reads in part: “Downloadable virtual goods, namely, a variety of consumer goods, prescription drugs, health, wellness, beauty and personal care products and general merchandise for use online and in online virtual worlds.”
Downloadable virtual prescription drugs?!?
My avatar looks forward to mining some bitcoin to pay for virtual medication in the pharmacy benefit metaverse (PBM). ¯\_(ツ)_/¯
Downloadable virtual prescription drugs?!?
My avatar looks forward to mining some bitcoin to pay for virtual medication in the pharmacy benefit metaverse (PBM). ¯\_(ツ)_/¯
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