2024 Gross-to-Net Realities at 9 Top Drugmakers: A New Era of Market Access

It’s time for Drug Channels’ annual update on drug pricing trends at the largest pharmaceutical manufacturers.

This year’s review includes the following nine companies: Bristol Myers Squibb, Eli Lilly and Company, Genentech, GlaxoSmithKline, Johnson & Johnson, Sanofi, Takeda, Teva, and UCB. You can find links to each company’s data below.

These data highlight divergent trends reshaping the gross-to-net bubble:

• Rebates, discounts, and other fees reduced the selling prices of brand-name drugs at the biggest drugmakers to less than half of their list prices.

• When accounting for all list price reductions, average brand-name drug prices declined at three manufacturers and increased at six others.

• Gross-to-net difference in price changes ranged from −12.8% to +6.3%, reflecting significant differences in the manufacturers’ portfolio mix and pricing strategies.

As I noted in last week’s gross-to-net bubble analysis, manufacturers’ evolving market access strategies increasingly aim to offset—or circumvent—growing pricing pressure from both commercial and government payers. Drug pricing flat earthers (#DPFE) will be challenged by falling net prices, while policy wonks will be amazed at the unintended consequences unleashed by our crazy system.

So, journey with me to Bikini Bottom as we again delve into the murky waters of gross-to-net drug pricing. Click here to share your thoughts with the Drug Channels community.

Gross-to-Net Bubble Hits $356B in 2024—But Growth Slows to 10-Year Low

Is the gross-to-net bubble—the ever-widening gap between brand-name drug sales at list prices and their net revenues after rebates and discounts—finally beginning to deflate?

Drug Channels Institute (DCI) estimates that the gross-to-net reductions for all brand-name drugs reached $356 billion in 2024, a 7% increase over the previous year. Yet despite this record total, the bubble expanded at the slowest rate in at least a decade.

In our analysis below, we highlight five key forces driving this shift. Among them: manufacturers’ evolving market access strategies, which increasingly aim to offset—or circumvent—growing pricing pressure from both commercial and government payers.

Meanwhile, many patients remain adrift in the drug channel’s murky waters. As for SpongeBob SquarePants—the longtime mascot of the gross-to-net bubble here at Drug Channels—he’s still with us…but may be eyeing the exit.

The Stelara Biosimilar Price War: How PBM-Affiliated Private Labels Are Reshaping the Market

The 2025 launch of biosimilars to Johnson & Johnson’s Stelara (ustekinumab) marks another turning point in pharmacy benefit dynamics. But unlike the chaotic rollout of Humira biosimilars, pharmacy benefit managers (PBMs) came prepared.

Private label strategies, aggressive pricing, and exclusive formulary deals have transformed what might have been a slow-crawling biosimilar introduction into a full-on pricing war. As with Humira, the reality of biosimilar economics is far messier—and more revealing—than the policy narratives suggest.

In this post, I examine how the major PBMs—and some of the smaller ones—are handling Stelara biosimilars, what’s changed since the Humira experience, and why their strategies reflect the growing dominance of private-label rebating schemes.

As always, with great pricing power comes great responsibility. Excelsior!

Transparency vs. Reality: Troubling Lessons from PBM Disclosure Laws (rerun)

This week, I’m rerunning some popular posts while I prepare for today’s live video webinar: What’s Next for Retail Pharmacy: Data, Debate, and Disruption. I’ll be joined by special guest Antonio Ciaccia, CEO of 46brooklyn Research, and President of 3 Axis Advisors.

Click here to see the original post from March 2025.

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Last week, President Trump signed yet another executive order, this time promising to make healthcare pricing more transparent.

While this marks another federal push for disclosure, states have already been quite active in this space. Since 2017, 24 states have passed 38 laws targeting healthcare transparency, with a strong focus on unraveling the complex economics of pharmacy benefit managers (PBMs).

But has all this legislation actually provided clarity—or just more red tape?

Below, I analyze four state reports on manufacturers’ rebate and fee payments to PBMs. The findings are dispiriting: mandated disclosures have yielded little actionable, reliable data. Lawmakers got to pat themselves on the back for “transparency,” but the data tell a different story. Federal efforts haven’t been much better.

Should we continue down the path of government-mandated reporting, or should plan sponsors be left to negotiate their own deals? 

Inflation-Adjusted U.S. Brand-Name Drug Prices Fell for the Seventh Consecutive Year as a New Era of Drug Pricing Dawns (rerun)

This week, I’m rerunning some popular posts while I prepare for today’s live video webinar: PBM Industry Update: Trends, Challenges, and What’s Ahead.

Click here to see the original post from January 2025.

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It's time for Drug Channels’ annual examination of U.S. brand-name drug pricing.

For 2024, average brand-name drugs’ list prices grew by only 2.3%. What’s more, after adjusting for overall inflation, brand-name drug net prices dropped for an unprecedented seventh consecutive year. Details and additional commentary below.

As I predicted two years ago, the combined impact of changes to Medicaid rebates, the Inflation Reduction Act (IRA), and novel formulary access strategies have led multiple manufacturers to pop the gross-to-net bubble for high-list/high-rebate products. Consider the 18 products with list-price cuts shown below.  Other drugmakers have reduced the rate of price increases, thereby inflating the bubble more slowly.

Employers, health plans, and pharmacy benefit managers (PBMs) determine the extent to which patients with insurance share in this ongoing deflation. But signs of change to the conventional approaches are undeniable.

New channel models—including smaller PBMs, cost-plus pharmacies, patient-paid discount card prescriptions, and manufacturers’ direct-to-patient businesses—are creating novel paths for drugs that can be sold without gross-to-net bubble distortions.

The bubble won’t vanish overnight. But for the first time in years, I can foresee a time when SpongeBob SquarePants will move on from Drug Channels.

Transparency vs. Reality: Troubling Lessons from PBM Disclosure Laws

Last week, President Trump signed yet another executive order, this time promising to make healthcare pricing more transparent.

While this marks another federal push for disclosure, states have already been quite active in this space. Since 2017, 24 states have passed 38 laws targeting healthcare transparency, with a strong focus on unraveling the complex economics of pharmacy benefit managers (PBMs).

But has all this legislation actually provided clarity—or just more red tape?

Below, I analyze four state reports on manufacturers’ rebate and fee payments to PBMs. The findings are dispiriting: mandated disclosures have yielded little actionable, reliable data. Lawmakers got to pat themselves on the back for “transparency,” but the data tell a different story. Federal efforts haven’t been much better.

Should we continue down the path of government-mandated reporting, or should plan sponsors be left to negotiate their own deals? I’ll explore these questions and more during DCI’s upcoming live video webinar, PBM Industry Update: Trends, Challenges, and What's Ahead on April 4, 2025. Click here to learn more and sign up.

Drug Channels News Roundup, January 2025: Mark Cuban Fixes Healthcare, Payers’ G2N Bubble, Pharmacists Rejoice, 340B Shenanigans, and 46Brooklyn vs. Mushrooms

Get ready to climb a Crisco-covered light pole! DCI’s hometown Philadelphia Eagles are going to Super Bowl LIX! Go E-L-G-S-E-S! (No, that's not a typo.)

Before you overturn any cars, please enjoy this month’s playbook of articles, intercepted for you from the Drug Channels gridiron:

• Touchdown! How Mark Cuban would quarterback the U.S. healthcare system 

• Trick Play: Patients and plans get sacked by a gross spending-to-net bubble

• Defensive line: A comeback for pharmacy students

• Offensive line: Apexus dances in the end zone, while a 340B hospital tackles a patient

Plus, Super Antonio runs downfield in the Mushroom Kingdom.

P.S. I recently passed 60,000 LinkedIn followers. If you haven’t done so already, follow along for my daily links to neat stuff along with thoughtful and provocative commentary from the DCI community.

Inflation-Adjusted U.S. Brand-Name Drug Prices Fell for the Seventh Consecutive Year as a New Era of Drug Pricing Dawns

It's time for Drug Channels’ annual examination of U.S. brand-name drug pricing.

For 2024, average brand-name drugs’ list prices grew by only 2.3%. What’s more, after adjusting for overall inflation, brand-name drug net prices dropped for an unprecedented seventh consecutive year. Details and additional commentary below.

As I predicted two years ago, the combined impact of changes to Medicaid rebates, the Inflation Reduction Act (IRA), and novel formulary access strategies have led multiple manufacturers to pop the gross-to-net bubble for high-list/high-rebate products. Consider the 18 products with list-price cuts shown below.  Other drugmakers have reduced the rate of price increases, thereby inflating the bubble more slowly.

Employers, health plans, and pharmacy benefit managers (PBMs) determine the extent to which patients with insurance share in this ongoing deflation. But signs of change to the conventional approaches are undeniable.

New channel models—including smaller PBMs, cost-plus pharmacies, patient-paid discount card prescriptions, and manufacturers’ direct-to-patient businesses—are creating novel paths for drugs that can be sold without gross-to-net bubble distortions.

The bubble won’t vanish overnight. But for the first time in years, I can foresee a time when SpongeBob SquarePants will move on from Drug Channels.

PBM Power: The Gross-to-Net Bubble Reached $334 Billion in 2023—But Will Soon Start Deflating (rerun)

This week, I’m rerunning some popular posts while I prepare for Friday’s Drug Channels Outlook 2025 live video webinar. Click here to see the original post.

As you reread the article below, note that some manufacturers have already announced wholesale acquisition cost (WAC) list price declines for 2025.

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Last week, the Federal Trade Commission (FTC) released its interim report on pharmacy benefit managers (PBMs). The report’s unsubtle subtitle revealed how the agency views PBMs: The Powerful Middlemen Inflating Drug Costs and Squeezing Main Street Pharmacies. ICYMI, the FTC's report relied extensively on the Drug Channels Institute's (DCI's) 2024 Economic Report on U.S. Pharmacies and Pharmacy Benefit Managers.

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!

Humira Biosimilar Price War Update: Should We Be Glad that CVS Health and Express Scripts Are Using Private Label Products to Pop the Gross-to-Net Bubble? (rerun)

This week, I’m rerunning some popular posts while I prepare for Friday’s Drug Channels Outlook 2025 live video webinar. Click here to see the original post. During Friday's webinar, I’ll share some updated thoughts on biosimilars and PBM’s private label products.

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The Humira biosimilar market just took another step forward—but remains far from its ideal state.

Last week, Cigna’s Express Scripts announced that it that will follow CVS Health’s CVS Caremark business and remove Humira from its largest commercial formulary in favor of multiple biosimilars.

Below, we review the 20 products competing with Humira—including four private-label products marketed by in-house subsidiaries owned by CVS Health and Cigna.

As you will see below, CVS Health’s formulary actions led to rapid uptake of a low-list-price biosimilar. Express Scripts’ 2025 strategy will also drive biosimilar adoption, although its pricing strategy is more problematic.

But what’s really going to bake your noodle later: Would the largest PBMs have popped the gross-to-net bubble for Humira if they hadn’t been able to profit from the switch?

Drug Channels News Roundup, October 2024: Humira Price War Update, PA vs. Providers, IRA vs. Physicians, My AI Podcast, New DCI Jobs, and Dr. G on Copayments

Eeek! It's time for Drug Channels’ Halloween roundup of terrifying tales to share with your ghoulish fiends. This month’s tricks and treats:

• Spooky! Blue Shield of California frightens away the gross-to-net bubble with its Humira biosimilar strategy

• Vampiric! Prior authorization sinks its fangs into providers’ time

• Wicked! How the IRA will put a stake through specialty physician practices

• Eerie! Google’s monstrous AI podcasts leave me petrified

• Zoinks! Join the vampire hunters at Drug Channels Institute

Plus, Dr. Glaucomflecken tells us a frightening tale of copayments.

P.S. Stretch out your arms and join the ever-growing zombie horde who shamble after me on LinkedIn. You’ll find my ghostly rantings along with commentary from the undead hordes in the DCI community.

The 340B Program Reached $66 Billion in 2023—Up 23% vs. 2022: Analyzing the Numbers and HRSA’s Curious Actions

Reality has again failed to support the spin surrounding the 340B Drug Pricing Program.

For 2023, discounted purchases under the 340B program reached a record $66.3 billion—an astounding $12.6 billion (+23.4%) higher than its 2022 counterpart. The gross-to-net difference between list prices and discounted 340B purchases also grew, to $57.8 billion (+$5.5 billion). 340B purchases are now almost 40% larger than Medicaid’s prescription drug purchases.

Hospitals again accounted for 87% of 340B purchases for 2023. Purchases at every 340B covered entity type grew, despite drug prices that grew more slowly than overall inflation.

Lobbyists claim that manufacturers’ 340B contract pharmacy changes are “stripping billions of dollars from the healthcare safety net.” But every year, 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 our analysis, along with fresh details of troubling behavior by the Health Resources and Services Administration (HRSA).

If Plan Sponsors Are So Unhappy with Their PBMs’ Transparency, Why Won’t They Change the Model?

A new survey of plan sponsors sheds light on their satisfaction with transparency at large and small pharmacy benefit managers (PBMs).

As you will see, clients remain slightly more satisfied with the perceived transparency of smaller PBMs compared with the Big Three PBMs—CVS Caremark, Express Scripts, and Optum Rx.

However, plan sponsors are dissatisfied with transparency about how both large and small PBMs make money. Smaller PBMs have an edge, but it’s narrower than you might think.

Perhaps PBMs’ clients are unable or unwilling to negotiate better deals, write more effective contracts, and switch to more satisfying relationships. Or maybe they don’t mind the current system, despite the challenges for patients. Some argue that transparency could swoop down to solve this problem. Riddle me this: Should we watch what plan sponsors say, or what they do?

Read on to see what you think of my arguments below. Then, click here to share your thoughts with the Drug Channels community.

Five Crucial Trends Facing U.S. Drug Wholesalers in 2024 and Beyond

As regular readers of Drug Channels know, U.S. distribution and dispensing channels for prescription drugs are undergoing significant evolution and consolidation as the changing economics of pharmaceuticals challenge conventional business models.

During this period of volatility, the core business model of the Big Three public pharmaceutical distribution companies—Cardinal Health, Cencora, and McKesson—remains intact. Put simply: Buy low, sell high, collect early, and pay late.

But as I explain below, wholesalers continue to position themselves as essential intermediaries by expanding their industry position and strengthening their economic fundamentals.

Read on for five key pricing, pharmacy, provider, and manufacturer trends that are driving the U.S. drug wholesaling industry.

For even more, check out DCI's new 2024-25 Economic Report on Pharmaceutical Wholesalers and Specialty Distributors, the fifteenth edition of our deep dive into wholesale distribution channels.Click here to download a free report overview (including key industry trends, the table of contents, and a list of exhibits)

Why PBMs and Payers Are Embracing Insulin Biosimilars with Higher Prices—And What That Means for Humira (rerun with an FTC update)

This week, I’m rerunning some popular posts while we put the finishing touches on DCI’s new 2024-25 Economic Report on Pharmaceutical Wholesalers and Specialty Distributors.

Last week, the Federal Trade Commission (FTC) released the redacted version of administrative complaint against the three largest pharmacy benefit managers (PBMs). The FTC rightly calls out how the gross-to-net bubble can raise patients’ out-of-pocket costs, while also acknowledging how rebates can reduce a plan's (but not the patient’s) costs. Apparently, the FTC believes that PBMs’ customers are pretty dumb, because PBMs are able to prevent plans from “appreciating” such healthcare financing dynamics.

Section V.E. of the complaint (starting on page 23) focuses on the PBMs’ alleged unlawful conduct related to preferring high-list/high-rebate insulin products over versions with lower list prices. I thought it would therefore be fun to take the Wayback Machine to November 2021, when I wrote about this specific topic.

Below, you can review my commentary about the warped incentives behind Viatris’ dual-pricing strategy for its interchangeable biosimilar of Lantus. Much of the FTC’s description of the drug channel aligns with my commentary. But before you fist pump too hard for Ms. Khan’s FTC, you should pause to reflect on the agency’s legal theories in light of plans’ revealed preferences.

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The Food & Drug Administration (FDA) recently approved the first interchangeable biosimilar insulin product: the insulin glargine-yfgn injection from Viatris. Read the FDA’s press release.

Alas, I’m sad to report that the warped incentives baked into the U.S. drug channel will limit the impact of this impressive breakthrough.

Viatris is being forced to launch both a high-priced and a low-priced version of the biosimilar. However, only the high-list/high-rebate, branded version will be available on Express Scripts’ largest commercial formulary. Express Scripts will block both the branded reference product and the lower-priced, unbranded—but also interchangeable—version. Meanwhile, Prime Therapeutics will place both versions on its formularies, leaving the choice up to its plan sponsor clients.

Consequently, many commercial payers will adopt the more expensive product instead of the identical—but cheaper—version. As usual, patients will be the ultimate victims of our current drug pricing system.

Below, I explain the weird economics behind this decision, highlight the negative impact on patients, and speculate on what this all could mean for biosimilars’ future. Until plan sponsors break their addiction to rebates, today’s U.S. drug channel problems will remain.

Drug Channels News Roundup, September 2024: Inside JNJ’s Gross-to-Net Bubble, Optum Rx’s Private Label Biosimilars, Where Biosimilars Boom, Accumulators vs. Patients, and Steve Collis Retires

Autumn is here! Curl up with your favorite pumpkin-spiced blog and savor these acorns that we’ve squirrelled away for you:

• Johnson & Johnson Innovative Medicines gives a peek inside its $43 billion gross-to-net bubble

• Optum Rx joins the private label biosimilar bandwagon

• Biosimilars boom for provider-administered drugs

• Fresh evidence of how copay accumulators hurt patients

Plus, words of wisdom from Cencora's soon-to-be-former CEO Steve Collis.

P.S. Join my more than 58,000 LinkedIn followers for daily links to neat stuff along with thoughtful and provocative commentary from the DCI community.

There’s still time to request an invite to the inaugural Drug Channels Leadership Forum. Attendance will be highly limited. We have already begun extending invitations, so apply now to be considered. Click here to view the full agenda.

Humira Biosimilar Price War Update: Should We Be Glad that CVS Health and Express Scripts Are Using Private Label Products to Pop the Gross-to-Net Bubble?

The Humira biosimilar market just took another step forward—but remains far from its ideal state.

Last week, Cigna’s Express Scripts announced that it that will follow CVS Health’s CVS Caremark business and remove Humira from its largest commercial formulary in favor of multiple biosimilars.

Below, we review the 20 products competing with Humira—including four private-label products marketed by in-house subsidiaries owned by CVS Health and Cigna.

As you will see below, CVS Health’s formulary actions led to rapid uptake of a low-list-price biosimilar. Express Scripts’ 2025 strategy will also drive biosimilar adoption, although its pricing strategy is more problematic.

But what’s really going to bake your noodle later: Would the largest PBMs have popped the gross-to-net bubble for Humira if they hadn’t been able to profit from the switch?

Gross-to-Net Bubble Update: 2023 Pricing Realities at 10 Top Drugmakers

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.

PBM Power: The Gross-to-Net Bubble Reached $334 Billion in 2023—But Will Soon Start Deflating

Last week, the Federal Trade Commission (FTC) released its interim report on pharmacy benefit managers (PBMs). The report’s unsubtle subtitle revealed how the agency views PBMs: The Powerful Middlemen Inflating Drug Costs and Squeezing Main Street Pharmacies. ICYMI, the FTC's report relied extensively on the Drug Channels Institute's (DCI's) 2024 Economic Report on U.S. Pharmacies and Pharmacy Benefit Managers.

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!

Why the IRA Will Encourage Part D Plans to Prefer High-List, High-Rebate Drugs (video)

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.

If this clip whets your appetite for more, register to watch a replay of the full 90-minute video webinar from April.

Curious about the IRA will disrupt the 340B market? Then register for The 340B Drug Pricing Program: Trends, Controversies, and Outlook, a new live video webinar with Adam J. Fein, PhD. Click here to learn more and reserve your spot at the June 21 webinar.

Click here if you can’t see the video below.