Follow the 340B Dollar: Senator Cassidy Exposes How CVS Health and Walgreens Profit as 340B Contract Pharmacies (rerun)

This week, I’m rerunning some popular posts while I prepare for Friday’s live video webinar: Drug Channels Outlook 2026.

Today's rerun provides background for the webinar, when I will discuss the consequences of the Inflation Reduction Act for the 340B program and contract pharmacies. Click here to see the original post from May 2025.

---

Two weeks ago, Senator Bill Cassidy—now chair of the Senate Committee on Health, Education, Labor, and Pensions (HELP)—dropped a must-read, eyebrow-raising report on the out-of-control 340B Drug Pricing Program. (Link below.)

The report reveals previously confidential information showing how billions are funneled to health systems and pharmacies—with manufacturers unable to follow the flow.

Below, we use these new disclosures to illustrate the 340B program’s hidden prescription economics for 340B contract specialty pharmacies operated by CVS Health and Walgreens Boots Alliance.

As you can see, the program’s participants earn substantial margins, while plans and third-party payers foot the bill.

What do you think? Click here to share your thoughts with the Drug Channels LinkedIn community.  

How Large PBMs Make Money Today: A 2025 Drug Channels Update (rerun)

This week, I’m rerunning some popular posts while I prepare for Friday’s live video webinar: Drug Channels Outlook 2026 .

Today's rerun provides valuable context for the webinar, when I will discuss how the large PBMs' profit model will be changing in the coming years. Click here to see the original post from May 2025.

---

During my PBM Industry Update: Trends, Challenges, and What’s Ahead video webinar, I explored the latest trends, emerging data, and strategic shifts transforming the pharmacy benefit management (PBM) industry.

In the video clip below, I explain how PBM compensation models continue to evolve:

• Traditional profit sources, such as mail dispensing of nonspecialty drugs and retained rebates, have become less significant.

• Retail network spreads now account for a small portion of large PBMs’ overall profits.

• Specialty dispensing profits, manufacturer administrative fees, and revenues from group purchasing organizations (GPOs) have emerged as major contributors to PBM profitability.

Can’t see the video? Click here to watch the PBM compensation models clip.

Understanding how PBMs generate profits is key to navigating the evolving drug channel landscape. Watch the full webinar replay and download the complete slide deck to explore these dynamics in more depth.

For a more comprehensive analysis of the forces transforming PBMs, see DCI’s 2025 Economic Report on U.S. Pharmacies and Pharmacy Benefit Managers.

Closing the Specialty Access Gap: How GoodRx Turns Intent Into Therapy Starts

Today’s guest post comes from Laura Jensen, Chief Commercial Officer and President, Pharma Solutions at GoodRx

Laura explores the structural hurdles that slow time-to-therapy and outlines practical ways stakeholders can streamline the path from prescription intent to treatment initiation.

To learn more, book a meeting with GoodRx.

Read on for Laura’s insights.

List Price Reductions Will Deflate the Gross-to-Net Bubble–and Threaten Pharmacy and 340B Profits from IRA-Negotiated Drugs

Contrary to popular belief, the Inflation Reduction Act’s (IRA) maximum fair prices (MFPs) could temporarily boost profits for retail pharmacies serving Medicare Part D patients.

The bad news? The IRA is also one of the five key forces deflating the gross-to-net bubble.

That’s why any IRA-related pharmacy profits will vanish if manufacturers lower list prices to be closer to net prices. At least 13 brand-name drugs—five of which have MFPs—reportedly plan to reduce list prices within the next two months.

As I show below, retail pharmacies risk becoming collateral damage from significant deflation in the gross-to-net bubble for drugs subject to an MFP. Welcome to our bonkers healthcare system—where everyone wants lower prices, until they actually get them.

What’s more, list price cuts will reduce profits from 340B contract pharmacy operations, while weakening covered entities’ main objections to a 340B rebate model. Get ready for a 340B slowdown.

For more on the intended and unintended consequences of the IRA—and its interplay with 340B—join me for my live video webinar, Drug Channels Outlook 2026, on December 12, 2025, from 12:00 p.m. to 1:30 p.m. ET.