Kids are heading back to school, but the drug channel never stops handing out homework. Fortunately, we did some of the research prep for you.
In this issue: Extra: Let’s Go on an Adventure to Find Out What Your Prescription Actually Costs You!
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Notice Regarding 340B Rebate Model Pilot Program, HRSA
HRSA published a revised 340B Rebate Model Pilot Program, and it's set to launch January 1, 2027.
The Inflation Reduction Act created a nonduplication requirement between the Maximum Fair Price (MFP) and the 340B ceiling price. Determining which one applies at the transaction level is something the traditional upfront discount model cannot do reliably.
Key details:
The limited scope and conflict with MFP make this a good opportunity for a policy experiment like a rebate model.
Here’s a breakdown between the current model and the new rebate model pilot.
You can find much more from us on the inevitability and implications of a 340B rebate pilot:
The Inflation Reduction Act created a nonduplication requirement between the Maximum Fair Price (MFP) and the 340B ceiling price. Determining which one applies at the transaction level is something the traditional upfront discount model cannot do reliably.
Key details:
- Launch date: January 1, 2027
- Scope limited to 2026-2027 MFP drugs only
- Those drugs represent less than 5.5% of 2025 340B sales, roughly $5.5 billion of the ~$100 billion in annual purchases
The limited scope and conflict with MFP make this a good opportunity for a policy experiment like a rebate model.
Here’s a breakdown between the current model and the new rebate model pilot.
[Click to Enlarge]
You can find much more from us on the inevitability and implications of a 340B rebate pilot:
How does cost affect access to healthcare?, Peterson-KFF Health System Tracker
A new Peterson-KFF Health System Tracker report on cost and healthcare access over a six-year period found that 8% of adults could not get a needed medication due to cost, and another 8% engaged in some form of medication rationing: skipping doses, splitting pills, or taking less than prescribed.
For most of the 2019-2025 period, the share of adults going without a prescription due to cost ran consistently higher than those delaying medical care.
In 2025, U.S. net spending on outpatient prescription drugs was 9% of national health expenditures, but 26% of adults said they or someone in their household had difficulty paying for prescription drugs. Only 11% said the same about medical bills.
Pharmacy isn't where most healthcare dollars go, but it's where patients feel the system most directly and most often. That's how the system is currently structured, but it doesn't have to be that way.
For most of the 2019-2025 period, the share of adults going without a prescription due to cost ran consistently higher than those delaying medical care.
In 2025, U.S. net spending on outpatient prescription drugs was 9% of national health expenditures, but 26% of adults said they or someone in their household had difficulty paying for prescription drugs. Only 11% said the same about medical bills.
[Click to Enlarge]
Pharmacy isn't where most healthcare dollars go, but it's where patients feel the system most directly and most often. That's how the system is currently structured, but it doesn't have to be that way.
2026 Specialty Drug Spend and Trend Report, Pharmaceutical Strategies Group (PSG) and Artemetrx
The 2026 specialty pharmacy trend report confirms the channel is on the path to the Net Pricing Drug Channel (NPDC).
Specialty drug trend came in at 10.8% gross, 12.5% net. When the gross trend runs lower than net trend, that's a sign rebates are having less of an impact.
Cost per claim tells the same story a different way:
With overall cost-per-claim trend running close to zero while overall trend runs in the double digits, nearly the entire rise in specialty costs is coming from increasing utilization.
Rising utilization means more patients are accessing specialty drugs for inflammatory conditions, rare diseases, and immunological disorders. The question is whether every new claim represents the most appropriate use of limited resources.
Specialty drug trend came in at 10.8% gross, 12.5% net. When the gross trend runs lower than net trend, that's a sign rebates are having less of an impact.
Cost per claim tells the same story a different way:
- Pharmacy benefit gross cost per claim fell from $6,694 to $6,500, down 2.9%
- Pharmacy benefit net cost per claim was $4,518 in both 2024 and 2025—the exact same net cost
- Biosimilars for Humira and Stelara pulled unit prices down
[Click to Enlarge]
With overall cost-per-claim trend running close to zero while overall trend runs in the double digits, nearly the entire rise in specialty costs is coming from increasing utilization.
Rising utilization means more patients are accessing specialty drugs for inflammatory conditions, rare diseases, and immunological disorders. The question is whether every new claim represents the most appropriate use of limited resources.
Changes in Medicare Part D Coverage in Competitive Classes in the Post–Inflation Reduction Act Landscape: 2024–2026, Health Affairs Scholar
A Health Affairs Scholar study analyzed change in formulary coverage for 59 brand-name drugs across 16 competitive drug classes from 2024 to 2026 (before and after Inflation Reduction Act implementation), comparing Medicare PDPs, MAPDs, and commercial plans, which served as the control group.
Here’s a summary of the results.
The January 2025 Part D redesign came with significant tradeoffs.
PDPs are particularly exposed because they have no medical side of the business to absorb losses. MAPDs can subsidize across the integrated benefit to keep Part D premiums lower for members—$28/month lower on average.
CMS ran a nearly $10 billion demonstration project specifically to stabilize the PDP market (it’s now ending after 2026), but PDPs have still dramatically reduced plan offerings while restricting formulary coverage the most.
The IRA's $2,100 annual out-of-pocket cap for 2026 is a genuine benefit for the sickest Medicare patients. This study just quantifies one of the tradeoffs.
Here’s a summary of the results.
[Click to Enlarge]
The January 2025 Part D redesign came with significant tradeoffs.
PDPs are particularly exposed because they have no medical side of the business to absorb losses. MAPDs can subsidize across the integrated benefit to keep Part D premiums lower for members—$28/month lower on average.
CMS ran a nearly $10 billion demonstration project specifically to stabilize the PDP market (it’s now ending after 2026), but PDPs have still dramatically reduced plan offerings while restricting formulary coverage the most.
The IRA's $2,100 annual out-of-pocket cap for 2026 is a genuine benefit for the sickest Medicare patients. This study just quantifies one of the tradeoffs.
Choose Your Own Adventure: How Much Will This Drug Cost?, LinkedIn
Many people that don’t read Drug Channels think a drug has one price. That’s incorrect.
It has your price, for your specific situation.
Your employer, your PBM, your pharmacy, your plan design, the time of year, and more can all push you toward a different ending. It's easy to see how patients can get confused or surprised about the price of their medication.
It has your price, for your specific situation.
[Click to Enlarge]
Your employer, your PBM, your pharmacy, your plan design, the time of year, and more can all push you toward a different ending. It's easy to see how patients can get confused or surprised about the price of their medication.
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