Tuesday, April 30, 2024

Drug Channels News Roundup, April 2024: CVS’s Humira Strategy, White Bagging “Savings,” IRA vs. Part D Plans, Walgreens Specialty Update, Pharmacies vs. GoodRx, and Oncology Fun

April is over, so it's time to hop into this month’s selection of noteworthy news:
  • CVS Health’s formulary boosts a Humira biosimilar
  • An insurer ditches buy-and-bill to save money for plans—but maybe not for patients?
  • My $0.02 on how Medicare Part D plans will react to the Inflation Reduction Act
  • Walgreens' unexpected specialty pharmacy strength
  • A video deconstruction of my infamous Drug Channels article on GoodRx
Plus, a cartoonist illustrates my recent keynote on the battle for oncology margin.

P.S. Join my nearly 55,000 LinkedIn followers for daily links to neat stuff.

Hyrimoz Rx Growth Continues; Humira Biosimilars NRx Share up to ~43%, EvercoreISI

The Humira biosimilar story just got more interesting.

As I described in January’s review of PBMs’ 2024 formularies, CVS Caremark began excluding Humira from most (but not all) of its major commercial formularies on April 1. Its 2024 Advanced Control Specialty Formulary now contains three preferred options: Hyrimoz, the high-list-price Humira biosimilar from Sandoz; Hyrimoz, the low-list-price Humira biosimilar from Cordavis; and adalimumab-adaz, the unbranded, low-list-price Humira biosimilar from Sandoz.

And guess what? This approach drove a noticeable jump in Hyrimoz prescriptions in the first three weeks of April!

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Kudos to Elizabeth Anderson at EvercoreISI for being the first to spot this inevitable surprise.
P.S. Starting in June, Express Scripts will be offering its private label Humira biosimilar—but will reportedly not be removing Humira from its formulary.

How our specialty pharmacy program saved more than $81 million for Tennessee businesses, BlueCross BlueShield of Tennessee

Last September, I pondered whether white bagging by specialty pharmacies saves money or merely shifts costs.

As you can see below, BlueCross BlueShield of Tennessee has answered the first half of this conundrum. According to its recently released figures, eliminating buy-and-bill saved $58M (21%) on provider-administered drugs due to (1) white bagging by specialty pharmacies, and/or (2) providers matching SP network prices.

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Alas, a health plan’s savings from white bagging often come from the lost profits and incremental costs incurred by providers, patients, and manufacturers. In general, patient out-of-pocket costs are generally higher when products are white bagged compared with buy-and bill.

Perhaps that’s why the BCBS of TN analysis mentioned premiums, but omitted any consideration of white bagging’s economic impact on everyone else.

Medicare-Negotiated Drugs May Not Get Favorable Coverage In Part D: Will CMS Intervene?, The Pink Sheet

In my recent Drug Channel Implications of the Inflation Reduction Act (IRA) video webinar, I described the intended and unintended consequences of this legislation.

This Pink Sheet, which journalist Cathy Kelly has graciously unpaywalled, highlights some of my comments on Medicare Part D plan formulary approaches, manufacturers’ market access strategies, and how non-negotiated drugs will compete.

You can learn more by watching a replay of the full 95-minute webinar.

Walgreens Launches Gene and Cell Services as Part of Newly Integrated Walgreens Specialty Pharmacy Business, Business Wire

In April, DCI published our top 15 specialty pharmacies list. We had estimated Walgreens’ U.S. dispensing revenues from specialty drugs to be $8.4 billion.

Judging by last week’s disclosure, we (and many others) had significantly underestimated its revenues and market share. Our $8.4 billion figure was roughly accurate for the AllianceRx Walgreens Pharmacy business. However, Walgreens apparently also generates about $16 billion in specialty revenues from its retail pharmacies and nearly 300 community-based specialty pharmacy locations. Consequently, its market share is closer to 10%, compared with the 3% that we reported.

We look forward to additional transparency about the new Walgreens Specialty Pharmacy business.

How GoodRx Helped Steal $7 From My Pharmacy (Featuring Algorithmic Price Fixing), Luke Slindee

In November 2022, I wrote Behind the GoodRx-Express Scripts Partnership: How PBMs Profit from Discount Cards in Pharmacy Benefits. It was one the first articles to deconstruct the economics of discount card pricing within pharmacy benefit plans. Since then, this activity has grown significantly, as we analyze in Section 12.4.3. of our new 2024 Economic Report on U.S. Pharmacies and Pharmacy Benefit Managers.

Luke Slindee, a consultant at Myers and Stauffer, used my article to illustrate why retail pharmacies dislike the presence of GoodRx within CVS Caremark’s pharmacy benefit plans. Definitely worth watching. Click here if you can’t see the video below.

The Battle for Oncology Margin, Drug Channels Institute

I had the pleasure of delivering the keynote address at the inaugural ONCare Alliance meeting. For those who don’t know, ONCare is a clinically integrated network of independent community oncology practices. It was recently formed by the merger of National Cancer Care Alliance (NCCA) and Quality Cancer Care Alliance (QCCA).

While I spoke, a cartoonist rapidly sketched out an entertaining summary of my presentation. Even our old friend SpongeBob SquarePants made an appearance. Enjoy!

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P.S. Some shameless self promotion: Email Paula if you'd like to learn more about my keynote speaking.

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