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 nearly 100,000 subscribers and followers. Learn more...
Today’s guest post comes from Joshua Guinter, Vice President of Channel Strategy and Product Access at Cencora.
Josh discusses the importance of a customized channel strategy for manufacturers. He outlines four key considerations that will ensure a successful strategy.
It’s time for Drug Channels’ annual update on pricing at the largest pharmaceutical manufacturers.
This year’s review includes the following 10 companies: Bristol Myers Squibb, Eli Lilly and Company, Genentech, GlaxoSmithKline, Merck, Novo Nordisk, Sanofi, Takeda, Teva, and UCB. You can find links to each company’s data below.
These data remain inconvenient for drug pricing flat earthers (#DPFE):
When rebates and discounts were factored in, brand-name drug prices again declined—or grew slowly—in 2023. For the companies that experienced net price gains in their portfolios, net prices grew more slowly than—or only slightly faster than—the overall inflation rate.
Rebates and discounts reduced the selling prices of brand-name drugs at the biggest drugmakers to less than half of their list prices.
For the eight companies with multiple years of data, the gross-to-net difference in price changes remained sizable. See the second chart below.
As I noted last week, multiple forces are poised to pop the gross-to-net bubble for high-list/high-rebate products. Insulin has been the first to deflate—and the Humira biosimilar market may be next. Journey with me to Bikini Bottom as we delve into the murky waters of gross-to-net drug pricing at the biggest drugmakers.
Today’s guest post comes from Greg Skalicky, President, EVERSANA; Krista Pinto, President, Deployment Solutions, EVERSANA; and Faruk Abdullah, President, Professional Services & Chief Business Officer, EVERSANA
Greg, Krista, and Faruk explain how and why integrated delivery networks (IDNs) have become crucial stakeholders for drug commercialization. They outline a two-pronged strategy to help brand teams thrive in today’s IDN landscape.
PBMs’ negotiating leverage against pharmaceutical manufacturers has been a key factor inflating the gross-to-net bubble—the ever-growing dollar gap between sales at brand-name drugs’ list prices and their sales at net prices after rebates, discounts, and other reductions.
For 2023, DCI estimates that the total value of manufacturers’ gross-to-net reductions for all brand-name drugs was $334 billion. (As we describe below, our latest estimates make a crucial change in the presentation of these figures compared with previous editions.)
Multiple forces are poised to pop the gross-to-net bubble for high-list/high-rebate products. This will force PBMs to further evolve their business models, while challenging plan sponsors and the FTC to follow the dollars.
Alas, patients remain caught in the drug channel's murky waters. I still can’t predict when SpongeBob SquarePants departs from Drug Channels—although I wish him a happy 25th birthday!
Today’s guest post comes from Gavin Magaha, Senior Director of External Affairs and Policy at Kalderos.
Gavin discusses the three key reasons for duplicate discounts between the 340B Drug Pricing Program and the Medicaid Drug Rebate Program. He then explains Oregon’s novel approach to fixing the problem.
The econowonks at the Centers for Medicare & Medicaid Services (CMS) recently released the latest projections for U.S. spending on healthcare. (See links below.) These data provide the latest official look at how the Inflation Reduction Act (IRA) will affect U.S. healthcare spending.
As you will see below, CMS projects that outpatient prescription drugs dispensed by retail and mail pharmacies will remain a small share of total U.S. healthcare spending. The Inflation Reduction Act’s changes to the Medicare Part D program, along with coming demographic shifts, will have a significant impact on future spending by government programs and consumers.
Nonetheless, taxpayers—primarily via Medicare and Medicaid—will continue to dominate the employer-sponsored insurance market. Like it or not, vertically integrated insurers, PBMs, specialty pharmacies, and providers will continue to prosper.
Today’s guest post comes from Kristina Crockett, VP of Product Management at CoverMyMeds.
Kristina discusses challenges patients face accessing, affording, and adhering to prescribed medications. She goes on to describe how manufacturers can overcome these challenges to improve outcomes for both patients and brands.
Good news, everyone! We have secured four outstanding fireside chat participants for our inaugural Drug Channels Leadership Forum, which will be held next March in Miami.
I’ll be leading one-on-one conversations with each of these executives:
Steven H. Collis, Chairman, President, and CEO, Cencora, Inc.
Patrick Conway, MD, MSc, CEO, Optum Rx
Frank Cunningham, Group Vice President, Global Value and Access & Lilly Direct, Eli Lilly and Company
Tim Wentworth, CEO, Walgreens Boots Alliance, Inc.
Our fireside chats will illuminate crucial issues and key strategic concerns affecting the prescription drug market and the entire U.S. healthcare system.
The event will also include panel discussions covering a range of important topics. Participants in these panels will be announced this fall.
IMPORTANT: To maximize the value of networking and learning, the event will have a limited number of attendees. Click here to request an invitation.
It's Valentine’s Day—and commercial plan sponsors remain smitten with copay accumulators and maximizers.
Our latest update finds that as of late 2023, about half of commercial lives were in plans that utilize a copay accumulator and/or a maximizer. These programs’ growth continues to divert the value of a manufacturer’s copay support payments away from patients and toward plans and PBMs. Check out the data below.
Patient advocacy groups and some big legal wins are starting to reverse Cupid’s arrow. But given the money at stake, I suspect that plans will keep looking for love in all the wrong places.
Today, we examine how manufacturers’ specialty networks contribute to this concentration. In DCI’s exclusive analysis below, we show that specialty pharmacies affiliated with pharmacy benefit managers (PBMs) play an outsized role in manufacturer-designated dispensing networks.
A typical network contains about five specialty pharmacies—but one in three specialty products with a manufacturer-designated network contains only a single specialty pharmacy. In those exclusive networks, independent and smaller specialty pharmacies are the big winners.
Read on for DCI’s updated profile of specialty networks—and ponder why smaller pharmacies are winning the battle for exclusive networks.
One important update to the figures below: We (and many others) had significantly underestimated Walgreens' revenues and market share. As we discuss below, its market share is closer to 10%, compared with the 3% that we originally reported.
Drug Channels Institute’s (DCI’s) latest analysis finds that participants in the specialty pharmacy market continue to get more diverse—although revenues remain highly concentrated.
We have identified nearly 1,800 dispensing sites with specialty pharmacy accreditation—about 40% of which are owned by hospitals, physician practices, and other healthcare providers.
Alas, specialty pharmacies owned by the three largest pharmacy benefit managers (PBMs) have the most brass in their pocket, as they accounted for two-thirds of prescription revenues from pharmacy-dispensed specialty drugs.
Read on for DCI’s latest overview of the 2023 marketplace and revenues of the biggest market participants, along with key specialty pharmacy trends.
Three is still the magic number for pharmacy benefit managers (PBMs).
For 2023, nearly 80% of all equivalent prescription claims were processed by three companies: the Caremark business of CVS Health, the Express Scripts business of Cigna, and the Optum Rx business of UnitedHealth Group.
Read on for Drug Channels Institute’s (DCI’s) latest market share figures, along with a preview of the industry changes that will shift these shares over the next few years.
Today’s guest post comes from Christine Juday, Head of Market Access at Real Chemistry.
Chris discusses new research on how patients perceive out-of-pocket costs. As she explains, many patients and unpaid caregivers consider out-of-pocket costs for medication within the context of their total spending. She then recommends three ways that manufacturers can improve patients' access and affordability.
The 340B contract pharmacy market shows little sign of slowing down. Drug Channels Institute’s exclusive analysis of the 2024 market reveals that:
About 33,000 pharmacy locations—more than half of the entire U.S. pharmacy industry—act as contract pharmacies for the hospitals and federal grantees that participate in the 340B program.
Five multi-billion-dollar, for-profit, publicly traded pharmacy chains and pharmacy benefit managers (PBMs)—Cigna (via Express Scripts), CVS Health, UnitedHealth Group (via OptumRx), and Walgreens, Walmart—continue to dominate the 340B contract pharmacy market.
Federal grantees are aligned primarily with the vertically intergated organizations' retail pharmacies, while hospitals rely on mail and specialty pharmacies.
Over the past four years, manufacturers’ restrictions on 340B contract pharmacies have led hospitals to deepen their relationships with the largest PBMs—even as those PBMs have simultaneously limited hospitals’ direct participation in specialty pharmacy networks.
Today’s guest post comes from Nasir Ali, Chief Product Officer at CareMetx.
Nasir highlights manufacturers' top objectives and vendor metrics from CareMetx’s recent survey of leaders and decision makers in the specialty pharmaceutical industry. He then outlines key questions to help manufacturers evaluate their potential hub partners.
It’s time for the annual update to Drug Channels Institute’s (DCI) analysis of pharmacist salaries and employment.
2023 was another tough year for pharmacists working in retail settings. While average salaries grew, they did not keep pace with overall inflation. Pharmacist employment at drug stores shrank but grew at supermarkets and mass merchants.
Meanwhile, employment and salaries in non-retail settings—hospitals, physician offices, outpatient centers, and home healthcare—continued to grow. These settings now employ one in three U.S. pharmacists. Greener grass—or just different soil?
Full salary and employment data below for your enjoyment or sorrow.
In my recent Drug Channel Implications of the Inflation Reduction Act video webinar, I explained the intended and unintended consequences of the Inflation Reduction Act of 2022 (IRA) for the commercial market and drug channel participants.
In the video excerpt below, I walk through a mathematical example to show why the IRA will encourage Part D plans to prefer high-list, high-rebate specialty drugs, even as the government and manufacturers will prefer a low-list-price version. What’s more, a product with a maximum fair price (MFP) may also raise total costs for the healthcare system—despite the likely political posturing and spin.
Dr. Adam J. Fein, president of Drug Channels Institute (DCI) and the author of Drug Channels, invites you to join him for DCI’s new live video webinar:
Friday, June 21, 2024, from 12:00 p.m. to 1:30 p.m. ET
This page describes the event and explains how to purchase a registration. The webinar will be broadcast from the Drug Channels studio in beautiful downtown Philadelphia.
The federal 340B Drug Pricing Program continues to grow much more quickly than the overall pharmaceutical market. For 2023, total purchases under the 340B program exceeded $124 billion. DCI estimates that 340B discounts equated to more than 17% of total value of gross-to-net reductions for brand-name pharmaceuticals. The 340B program also remains a significant and controversial source of profits for the pharmacy and pharmacy benefit management (PBM) industries.
In this all-new webinar, Dr. Fein will provide a fact-based look at the 340B program, summarize the multiple controversies surrounding the program’s operations, and deliver a clear-eyed outlook for the program’s future. Key topics will include:
Current operations of the 340B program
340B growth trends by dispensing/administration channel and covered entity type
Following the 340B dollar
Contract pharmacy controversies
Impact of CMS’s latest 340B guidance for the Inflation Reduction Act
PBM and pharmacy profits from the 340B program
Vertical integration and third-party administrators
How state Medicaid program reforms are affecting the 340B program
Manufacturers’ 340B strategies
State and federal legislative actions and outlook
And much more!
PLUS: During the webinar, Dr. Fein will give participants an opportunity to unmute themselves and ask live questions. The webinar will last at least 90 minutes to accommodate audience questions.
Today’s guest post is from Dr. Preeti Parikh, a practicing pediatrician and VP, Executive Medical Director at GoodRx.
At the recent Publicis Health Media HealthFront event, Preeti hosted a dialogue on the main stage with Dr. Minisha Sood. They discussed new GoodRx research and had a candid discussion about their daily challenges in caring for patients—especially those living with diabetes and obesity.
Contrary to what you may have heard, the Inflation Reduction Act’s (IRA) inflation rebates for Medicare Part B drugs do not always save money for seniors.
As we document below, a growing share of Part B drugs have inflation-adjusted coinsurance rates that have been increasing, not declining. In many cases, the coinsurance rate declines only briefly before rebounding back to the standard 20% rate. What’s more, these fluctuations have triggered huge jumps in patients’ out-of-pocket obligations for some drugs—even when a drug’s costs were falling.
Chalk off these coinsurance surprises to yet another unintended consequence of the IRA. Seniors who are expecting to see costs drop may find they are instead being taken for a rollercoaster ride.
Today’s guest post comes from Hannah Baxter, Associate Partner at The Dedham Group; Jen Klarer, Partner, Head of Cell & Gene Therapy at The Dedham Group; and Carolyn Zele, Advisor, Solution Consulting at MMIT.
The authors discuss the access barriers facing patients who need biomarker testing. They discuss five ways manufacturers can prevent these barriers from affecting patients.
It's time for Drug Channels’ annual update of vertical integration among insurers, PBMs, specialty pharmacies, and providers within U.S. drug channels.
Below you’ll find our latest illustration of the major vertical business relationships among the largest companies along with some of the notable activity since our previous update. These organizations continue to exert greater control over patient access, sites of care/dispensing, and pricing, although some have started to unwind their vertical efforts.
The companies face renewed scrutiny from the Federal Trade Commission, the Office of Inspector General, and members of Congress. But until anyone takes action, we will continue to live with the golden rule of the drug channel: Whoever has the gold gets to make the rules.
