Drug Channels delivers timely analysis and provocative opinions from Adam J. Fein, Ph.D., the country's foremost expert on pharmaceutical economics and the drug distribution system. Drug Channels reaches an engaged, loyal and growing audience of more than 50,000 subscribers and followers. Learn more...

Monday, August 15, 2022

The 340B Program Climbed to $44 Billion in 2021—With Hospitals Grabbing Most of the Money

Here’s a summer surprise for fans of the 340B Drug Pricing Program: Drug Channels has just obtained the 2021 figures from the Health Resources and Services Administration (HRSA)! Even better, my Freedom of Information Act (FOIA) request was able to pry out detailed purchases by covered entity type.

The data tell a familiar story. For 2021, discounted purchases under the 340B program reached a record $43.9 billion—an astonishing $5.9 billion (+15.6%) higher than its 2020 counterpart. Hospitals accounted for 87% of these skyrocketing 340B purchases.

What’s more, the difference between list prices and discounted 340B purchases also grew, to $49.7 billion (+$7.0 billion). This figure approximates the money collected by 340B covered entities.

340B advocates have been screaming that “drug companies are cutting 340B,” but the data tell a very different story. Only in the U.S. healthcare system can billions more in payments and spreads be considered a cut.

Read on for full details and analysis, including the opportunity to download your very own copy of the raw data from HRSA.

Friday, August 12, 2022

Improving Out-of-Pocket Cost Transparency For Physicians

Today’s guest post comes from Divya Iyer, VP, Strategy and Business Development, Pharma Manufacturer Solutions at GoodRx.

Divya highlights new GoodRx research on the out-of-pocket cost gap between brand-name and generic prescriptions. She discusses the challenges that providers face when having real-time discussions with patients about out-of-pocket costs. Divya then explains how GoodRx partners with pharmaceutical companies to improve cost transparency and communication between patients and providers.

Click here to learn more about how GoodRx helps brand teams engage providers in specific specialties.

Read on for Divya’s insights.

Tuesday, August 09, 2022

Texas Shows Us Where PBMs’ Rebates Go

Over the weekend, the U.S. Senate passed a massive overhaul of the Medicare Part D program. If passed into law, these changes will have many unintended consequences, but will not address the warped incentives baked into our current rebate system.

This makes it a good time to review the murky, little-seen economics of how commercial plan sponsors and payers access the billions of dollars in manufacturer rebates and fee that are negotiated by their pharmacy benefit managers (PBMs).

Our analyses of new Texas-mandated PBM disclosures reveal that plan sponsors receive most of the rebates, fees, and other payments from manufacturers. However, PBMs retain an unexpectedly large share of these payments—while the patients whose prescriptions generated these funds get almost nothing.

In other words, plans spread around manufacturers’ rebates and fees to offset premiums for all beneficiaries, rather than lower out-of-pocket costs for drugs that plans buy at a discounted price. Perhaps Congress will someday get around to corralling these funds.

Friday, August 05, 2022

Three Technology Tactics for Overcoming Prior Authorization Hurdles

Today’s guest post comes from Karina Castagna, SVP of Access and Adherence at OptimizeRx.

Karina discusses the challenges health care providers and patients face in their quest to secure prior authorizations from payers. She argues that manufacturers adopt an electronic health record-based solution to facilitate access to therapies, from the point of prescription through the point of dispensing at the pharmacy.

To test the efficacy of your market access digital strategy against industry best practices, take the OptimizeRx Market Access Strategy Quiz.

Read on for Karina’s insights.

Tuesday, August 02, 2022

The Shady Business of Specialty Carve-Outs

Watch out! Plan sponsors are getting even bolder in their attempts to grab financial support intended for patients. The latest scam is called a specialty carve-out.

Here’s the game: A commercial plan eliminates coverage for all specialty drugs. Beneficiaries are then shunted over to a charitable foundation, because they are now disguised as uninsured—at least for specialty drugs. Naturally, the vendor skims a healthy share of the charity’s money.

In addition to the ethical and compliance issues, some vendors raise safety risks by sourcing prescriptions from non-U.S. pharmacies as a backup.

The Orwellian euphemism for this “benefit” design: alternative funding program.

A new survey reveals that an astounding four out of 10 commercial plans are already using, or exploring the use of, these specialty carve-out programs. Yikes.

Read on for an overview of these shady programs—and the many problems they are creating.