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Showing posts with label Net Pricing Drug Channel. Show all posts
Showing posts with label Net Pricing Drug Channel. Show all posts
Every year, Drug Channels reviews drug pricing trends at the largest pharmaceutical manufacturers. This year's disclosures provide early evidence that the economics of the U.S. drug channel—and the strategies manufacturers use to secure market access—are beginning to change.
We review the following eight companies: Bristol Myers Squibb, Eli Lilly and Company, Genentech, GlaxoSmithKline, Sanofi, Takeda, Teva, and UCB. You can find links to each company’s data in the appendix.
Our review found:
Brand-name drug list prices continued to rise modestly, while mandatory and voluntary rebates, discounts, and fees reduced net prices at seven of the eight manufacturers.
The average gross-to-net price difference was –5.5%, reflecting an average list price increase of 3.7% and an average net price decline of 1.8%.
For the three manufacturers that disclosed these data, rebates, discounts, and other fees reduced the selling prices of brand-name drugs to less than half of their list prices.
Sanofi's latest and historical disclosures provide one of the clearest illustrations yet of the drug channel's changing economics. Since 2020, the company's estimated U.S. biopharmaceutical sales have grown far faster than rebate payments. As a result, the share of its gross sales returned to payers as rebates declined from 51% to 39%.
Taken together, this year's manufacturer disclosures suggest that the gross-to-net bubble is growing more slowly—and even deflating in parts of the market. Meanwhile, the Net Pricing Drug Channel (NPDC) is becoming visible in manufacturers’ pricing disclosures and financial statements.
Football season is officially back. Personally, my signal is hearing my uncle curse about bad calls from 1,000 miles away, but you may have already seen a game.
This news roundup is short enough to fit into an ad break or two. *Caveat: may lead to rabbit holes that take much longer than an ad break.
Drug Channels Institute is proud to host the 2027 Drug Channels Leadership Forum, which will take place from March 15–17, 2027, in Miami. Request your invitation to this invite-only gathering of senior leaders from across the drug channel ecosystem. You must request an invitation to be considered for attendance. We will begin sending invitations in mid-October.
Every year, Drug Channels reviews drug pricing trends at the largest pharmaceutical manufacturers. This year's disclosures provide early evidence that the economics of the U.S. drug channel—and the strategies manufacturers use to secure market access—are beginning to change.
We review the following eight companies: Bristol Myers Squibb, Eli Lilly and Company, Genentech, GlaxoSmithKline, Sanofi, Takeda, Teva, and UCB. You can find links to each company’s data in the appendix.
Our review found:
Brand-name drug list prices continued to rise modestly, while mandatory and voluntary rebates, discounts, and fees reduced net prices at seven of the eight manufacturers.
The average gross-to-net price difference was –5.5%, reflecting an average list price increase of 3.7% and an average net price decline of 1.8%.
For the three manufacturers that disclosed these data, rebates, discounts, and other fees reduced the selling prices of brand-name drugs to less than half of their list prices.
Sanofi's latest and historical disclosures provide one of the clearest illustrations yet of the drug channel's changing economics. Since 2020, the company's estimated U.S. biopharmaceutical sales have grown far faster than rebate payments. As a result, the share of its gross sales returned to payers as rebates declined from 51% to 39%.
Taken together, this year's manufacturer disclosures suggest that the gross-to-net bubble is growing more slowly—and even deflating in parts of the market. Meanwhile, the Net Pricing Drug Channel (NPDC) is becoming visible in manufacturers’ pricing disclosures and financial statements.
As I highlighted last week, we are entering the Net Pricing Drug Channel (NPDC) era—a market environment in which net prices, not list prices, determine access, economics, and competitive strategy. This shift represents a structural change in how value is created and captured across the U.S. drug channel.
The NPDC will:
Reward simpler pricing models
Penalize rebate-heavy strategies
Expose business models built on gross-to-net arbitrage
Force channel participants to rethink how they add value when money flows more transparently through the system
The short video below, excerpted from my recent Drug Channels Outlook 2026, explains why this shift is accelerating.
It walks through the key forces now deflating the gross-to-net bubble and explains how manufacturers and other channel participants are responding.
For more context on the emergence of the Net Pricing Drug Channel and the slowdown in the gross-to-net bubble’s growth, see these Drug Channels articles:
Earlier today, the Federal Trade Commission (FTC) announced an extraordinary settlement with Express Scripts that fundamentally reshapes its pharmacy benefit management (PBM) business—and by extension, the entire drug channel.
The settlement addresses virtually every warped incentive that we have been covering on Drug Channels for the past 20 years. I summarize them below, but it’s worth reading the full document (links below) to appreciate just how completely the FTC has dismantled the existing PBM business model.
One small caveat: Plan sponsors could provide a loophole for business-as-usual. (See Section XI.)
William Gibson once said: “The future is already here–it's just not evenly distributed.” That future just arrived for one of the biggest PBMs. Get ready.
Since this article was published last December, Net Pricing Drug Channel developments have accelerated. Manufacturers reduced the list prices for 6 of the 10 products with an MFP for 2026. They have also preemptively reduced list prices for three products that will have MFPs in 2027 and 2028. For more on these trends, see Section 12.1.1. of our new 2026 Economic Report on U.S. Pharmacies and Pharmacy Benefit Managers.
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.
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 2026, the three largest pharmacy benefit managers (PBMs)—Caremark (CVS Health), Express Scripts (Cigna), and Optum Rx (United Health Group)—have once again excluded hundreds of drugs from their standard formularies. Our updated counts appear below.
The 2026 lists highlight how formulary preferences for Humira and Stelara are dominated by private-label biosimilars affiliated with the same parent companies that operate the three largest PBMs. Many of the preferred products feature lower list prices, signaling growing tension between traditional rebate-driven formularies and emerging net-price-based competition.
These developments matter because the pricing system that underpins PBMs’ formulary leverage is weakening. The gross-to-net bubble is deflating and the industry is moving toward what we call the Net Pricing Drug Channel (NPDC).
As low list prices, direct-to-patient distribution, and cost-plus reimbursement models gain traction, formulary exclusions will no longer deliver the economic power they once did. These changes threaten PBMs’ leverage—and profits.
As usual, Mark Cuban is leading the way. AbbVie itself now appears to be following. Consider this year’s formulary review a preview of what market access looks like when the rebate game starts to unwind.
Special launch pricing discounts will be valid through April 6, 2026.
This report—our seventeenth edition—remains the most comprehensive, fact-based tool for understanding the entire U.S. drug pricing, reimbursement, and dispensing system. If you make strategic decisions in this industry, this report is essential reading.
WHAT’S INSIDE
Nearly 1,300 endnotes, most of which have hyperlinks to source materials
If you preordered, you should have received an email with download instructions last week. Didn’t get it? Contact us at dcisupport@hmpglobal.com, and we’ll take care of it.
Our goal is simple: help you understand how the drug channel really works—and where it’s going.
That's why DCI reports are widely used by nearly every company involved in the drug channel:
Pharmaceutical manufacturers
Wholesalers, pharmacists, and pharmacy owners
Payers, insurers, and plan sponsors
Hospitals, benefit managers, and managed care executives
Policy analysts, investors, consultants, and more
In other words, this report helps you understand what your customers, partners, and competitors are reading—and how they’re thinking.
The chart below illustrates the depth and breadth of the 2026 edition. The numbers indicate the report chapter that corresponds to, explains, and analyzes each channel flow.
FUN FACTS ABOUT THE 2026 EDITION
The 12 chapters are self-contained—you don't need to read them in order. (Really!) Use the report as a reference guide or read it end-to-end. It’s designed as both a foundational resource and a deep dive into the latest trends and developments.
There are tons of internal hyperlinks to help you navigate and focus on what matters most to you.
We’ve updated all market and industry data with the most current insights, including our annual analyses of the largest pharmacies, specialty pharmacies, and PBMs.
One of the available licenses gives you the option to download an additional PowerPoint file with images of all 270 exhibits—making it easier to share insights with your team. (Note: All license versions include exhibits within the text.)
There are a staggering 1,284 endnotes (!), most of which have direct hyperlinks to original source materials. This allows you to validate, explore, and go deeper.
We have reluctantly removed all corny jokes and pop culture references. So, no memes and absolutely no references to SpongeBob SquarePants.
Thank you for your interest in our work. If you have any questions before purchasing a license to the report, please email me. We look forward to helping you succeed in the evolving U.S. drug channel.
On March 24, 2026, Drug Channels Institute will release The 2026 Economic Report on U.S. Pharmacies and Pharmacy Benefit Managers. This report—our seventeenth edition—remains the most comprehensive, fact-based tool for understanding the entire U.S. drug pricing, reimbursement, and dispensing system. If you make strategic decisions in this industry, this report belongs on your desk.
12 chapters, 500+ pages, 270 exhibits, and nearly 1,300 endnotes. No other resource matches the scope, depth, and rigor of this resource.
We are offering you the opportunity to preorder the thoroughly updated, revised, and expanded 2026 edition at special discounted prices. Preordering guarantees early access and locks in the lowest available price. Those who preorder will receive a download link before March 30.
Special preorder and launch pricing discounts will be valid through April 6, 2026. After that date, prices increase. Secure your discount now.
The report was researched and written by the Drug Channels Institute team, led by Adam J. Fein, Ph.D. As shown below, the 2026 edition delivers unmatched depth and breadth. The numbers indicate the report chapter that corresponds to, explains, and analyzes each channel flow.
The 2026 Economic Report on U.S. Pharmacies and Pharmacy Benefit Managers contains the most current market and industry data available, including DCI’s annual analyses of the market positions of the largest pharmacies, specialty pharmacies, and PBMs. Throughout the report, we have added new industry data, deepened our coverage of many topics, and expanded our analysis of emerging trends.
This definitive, nonpartisan report will aid pharmaceutical manufacturers, wholesalers, pharmacists, pharmacy owners, hospital executives, pharmacy buyers, benefit managers, managed care executives, policy analysts, investors, consultants, and anyone else who wants to understand and benefit from this ever-changing industry. If your organization competes, negotiates, invests, or sets policy in this market, this report will sharpen your strategy.
There are many notable updates in this 2026 edition, including:
A new Section 4.3.4. analyzes manufacturers’ direct-to-patient (DTP) websites and TrumpRx within the broader context of patient-paid prescriptions.
A new Section 5.5. deconstructs the three largest PBMs’ gross profits. Some of this material previously appeared in Chapter 11.
Material in Section 7.1., Section 9.1., and Section 9.3. reflects the PBM legislative reforms contained within the Consolidated Appropriations Act, 2026 (P.L. 119-75), which became law in February 2026.
Material in Section 8.4. and Section 9.3. incorporates implications of the 2026 settlement between Express Scripts and the Federal Trade Commission.
A new Section 6.3.3. reviews research on how the IRA’s implementation has affected out-of-pocket spending by Medicare Part D beneficiaries.
A new Section 11.2.4. analyzes pharmacies’ dispensing profits under the Inflation Reduction Act of 2022 (IRA).
A new Section 12.1.4. evaluates the potential implications of most favored nation (MFN) and tariff policies on the drug channel.
In Section 12.3.1., our illustration of major vertical business relationships among drug channel businesses now incorporates affiliated third-party administrators (TPAs) and administrative services only (ASO) platforms.
We have also improved our presentation of material about the IRA and the 340B Drug Pricing Program.
Thank you for your interest in our work. If you have any questions before purchasing a license to the report, please email me. We look forward to supporting your team’s success in 2026.
Despite the recent storm, winter—or at least February—is almost over. Before we thaw out, here’s a brisk tour of the forces reshaping the drug channel. In this issue:
Earlier today, the Federal Trade Commission (FTC) announced an extraordinary settlement with Express Scripts that fundamentally reshapes its pharmacy benefit management (PBM) business—and by extension, the entire drug channel.
The settlement addresses virtually every warped incentive that we have been covering on Drug Channels for the past 20 years. I summarize them below, but it’s worth reading the full document (links below) to appreciate just how completely the FTC has dismantled the existing PBM business model.
One small caveat: Plan sponsors could provide a loophole for business-as-usual. (See Section XI.)
William Gibson once said: “The future is already here–it's just not evenly distributed.” That future just arrived for one of the biggest PBMs. Get ready.
The boffins at the Centers for Medicare & Medicaid Services (CMS) recently dropped the latest National Health Expenditure (NHE) data, which track all U.S. spending on healthcare. (Links below.)
We spent an astounding $5,278,588,000,000 on healthcare in 2024. Yes, that’s $5.3 trillion!
Retail outpatient prescription drugs accounted for less than 9% of that total. More than half of net outpatient drug spending was paid by federal, state, and local government programs. Below, we delve into the spending trends, which reveal the impact of the Inflation Reduction Act (IRA) on Medicare spending, the boom in healthcare marketplaces, and the post-pandemic bust in Medicaid.
Contrary to what you might read, the government’s data show that drug spending growth was not driven by purportedly “skyrocketing” drug prices. In reality, nearly all of the increase in drug spending reflected higher utilization—more people treated, more prescriptions dispensed, and shifts among drugs dispensed—rather than higher net prices.
Prices may grab headlines, but utilization—and taxpayers—are driving the spending story. When prices stop being signals, markets stop being markets.
For 2026, the three largest pharmacy benefit managers (PBMs)—Caremark (CVS Health), Express Scripts (Cigna), and Optum Rx (United Health Group)—have once again excluded hundreds of drugs from their standard formularies. Our updated counts appear below.
The 2026 lists highlight how formulary preferences for Humira and Stelara are dominated by private-label biosimilars affiliated with the same parent companies that operate the three largest PBMs. Many of the preferred products feature lower list prices, signaling growing tension between traditional rebate-driven formularies and emerging net-price-based competition.
These developments matter because the pricing system that underpins PBMs’ formulary leverage is weakening. The gross-to-net bubble is deflating and the industry is moving toward what we call the Net Pricing Drug Channel (NPDC).
As low list prices, direct-to-patient distribution, and cost-plus reimbursement models gain traction, formulary exclusions will no longer deliver the economic power they once did. These changes threaten PBMs’ leverage—and profits.
As usual, Mark Cuban is leading the way. AbbVie itself now appears to be following. Consider this year’s formulary review a preview of what market access looks like when the rebate game starts to unwind.
As I highlighted last week, we are entering the Net Pricing Drug Channel (NPDC) era—a market environment in which net prices, not list prices, determine access, economics, and competitive strategy. This shift represents a structural change in how value is created and captured across the U.S. drug channel.
The NPDC will:
Reward simpler pricing models
Penalize rebate-heavy strategies
Expose business models built on gross-to-net arbitrage
Force channel participants to rethink how they add value when money flows more transparently through the system
The short video below, excerpted from my recent Drug Channels Outlook 2026, explains why this shift is accelerating.
It walks through the key forces now deflating the gross-to-net bubble and explains how manufacturers and other channel participants are responding.
During 2026, DCI will be hosting three live, interactive video webinars focused on the issues that matter most as they’re happening—policy shifts, market trends, and major company moves. Click here to register.
ADDITIONAL BACKGROUND AND ANALYSIS
For more context on the emergence of the Net Pricing Drug Channel and the slowdown in the gross-to-net bubble’s growth, see these Drug Channels articles:
It's time for Drug Channels’ annual examination of U.S. brand-name drug pricing.
For 2025, brand-name drugs’ average list prices grew by only 3.5%, but net prices declined. When manufacturers’ rebates and discounts are factored in, drugs’ average net prices—both before and after inflation—fell. Details and additional commentary below.
As I have been predicting, the gross-to-net bubble is deflating due to the combined impacts of government actions and consumer behavior.
For 2024 and 2025, manufacturers reduced the wholesale acquisition cost (WAC) list prices for more than 20 brand-name drugs. For 2026, manufacturers will cut prices on at least 15 more drugs, which will reduce gross brand-name revenues by $35 to $40 billion. List prices are dropping by –25% to –85%.
The data leave no doubt: the bubble is finally leaking air. We are entering the Net Pricing Drug Channel (#NPDC)—a market environment in which net prices, not list prices, drive access, economics, and strategy.
The NPDC will reward simplicity, punish rebate dependence, and force every channel participant to rethink how money actually moves. Time to get ready.
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