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Showing posts with label Specialty Drugs. Show all posts
Showing posts with label Specialty Drugs. Show all posts
After multiple years of mandated disclosure of negotiated hospital-insurer rates, those of us who follow the buy-and-bill channel might have expected transparency to reduce drug price variability, lower hospital markups, and accelerate adoption of lower-cost biosimilars.
Alas, that’s not what the latest data reveal.
DCI’s analysis of four national commercial insurers—Aetna, Anthem, Cigna, and UnitedHealthcare—and 26 hospitals found that:
Hospitals still earn significant markups over average sale price (ASP). 340B hospitals earn even more.
Insurers pay wildly varying amounts for the same drug.
Some hospitals get paid significantly more than others for the same drug.
Insurers can pay more for a lower-cost biosimilar than for the higher-cost reference product.
While provider-administered biosimilars are significantly cheaper than their reference products, hospitals and insurers are still making them expensive for plan sponsors. Meanwhile, patients with coinsurance and deductibles are paying higher out-of-pocket costs.
Transparency was supposed to clean things up—but someone forgot to bring the mop.
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!
This week, I’m rerunning some popular posts while I prepare for Friday’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.
Drug Channels Institute’s (DCI’s) latest analysis reveals that PBM-affiliated specialty pharmacies continue to dominate the dispensing of specialty drugs.
DCI has identified nearly 1,900 dispensing locations with specialty pharmacy accreditation. Below, we share DCI’s latest analysis of the top 15 specialty pharmacies, including updated market shares and revenue estimates.
As in prior years, pharmacies linked to the three largest pharmacy benefit managers (PBMs) accounted for two-thirds of prescription revenues from pharmacy-dispensed specialty drugs. We also explore how these pharmacies contribute to PBMs’ profitability—and spotlight the growing influence of provider- and health system-owned dispensing channels.
Once again, “specialty” mostly means affiliated with a PBM.
This week, I’m rerunning some popular posts while I prepare for Friday’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.
Three’s still company in the world of pharmacy benefit managers.
For 2024, nearly 80% of all equivalent prescription claims were processed by three familiar companies: the CVS Caremark business of CVS Health, the Express Scripts business of Cigna, and the Optum Rx business of UnitedHealth Group. The names haven’t changed, but shifting relationships and contract shakeups have altered the plot, with Express Scripts stepping into a new lead role.
Below, we break down the latest market share data from Drug Channels Institute (DCI), explore the developments driving these changes, and examine what they signal for the future of the PBM landscape.
This week, I’m rerunning some popular posts while I prepare for Friday’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.
For 2024, DCI estimates that total prescription dispensing revenues at retail, mail, long-term care, and specialty pharmacies reached $683 billion, up 9% from the 2023 figure. GLP-1 agonist drugs remained the most significant driver of prescription revenue at retail pharmacies, accounting for more than 80% of dispensing revenue growth for 2024.
The table below—one of 268 in our new report—cues up DCI's first look at the 15 largest organizations that battled for those revenues. For a sneak peek at the complete report, click here to download our free 30-page report overview (including key industry trends, What's New in this edition, the Table of Contents, and a List of Exhibits).
The 340B Drug Pricing Program has emerged as a growing source of profits for pharmacies and pharmacy benefit managers (PBMs).
Drug Channels Institute’s latest exclusive analysis of the 2025 market reveals a highly concentrated market structure increasingly dominated by a handful of major players:
About 32,000 pharmacy locations—nearly 60% of the entire U.S. pharmacy industry—function as contract pharmacies for the hospitals and federal grantees that participate in the 340B program.
The 340B contract pharmacy has become increasingly concentrated with five multi-billion-dollar, for-profit, publicly traded pharmacy chains and pharmacy benefit managers (PBMs)—Cigna (via Express Scripts), CVS Health, UnitedHealth Group (via Optum Rx), Walgreens, and Walmart.
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.
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.
Today, we dive deeper. Drawing from DCI’s new 2025 Economic Report on U.S. Pharmacies and Pharmacy Benefit Managers, we explore how pharmaceutical manufacturers structure their specialty pharmacy networks—and how smaller, independent pharmacies have emerged as dominant players in exclusive networks.
In DCI’s latest analysis, we find specialty pharmacies affiliated with the largest PBMs still play an outsized role in limited networks. But like a certain striped-hatted cat, smaller pharmacies unaffiliated with PBMs show up where few expect them. They dominate exclusive networks and maybe even cleaning up any messes left by Things 1, 2, and 3.
Read on for DCI’s updated profile of specialty networks—and consider why smaller players are showing the good tricks that they know.
As you might expect, we'll be showing up in true Drug Channels style. Be sure to swing by booth #1601 for fun, flair, and pharma-frivolity:
Ask Adam Anything (#AAA). Join DCI president Adam J. Fein, Ph.D., for a special live session during the opening reception on Monday, April 28, at 4:00 p.m. Bring your phone—selfies encouraged!
Spin the Drug Channels Wheel O’ Fun and win fabulous prizes!
Drug Channels Institute’s (DCI’s) latest analysis reveals that PBM-affiliated specialty pharmacies continue to dominate the dispensing of specialty drugs.
DCI has identified nearly 1,900 dispensing locations with specialty pharmacy accreditation. Below, we share DCI’s latest analysis of the top 15 specialty pharmacies, including updated market shares and revenue estimates.
As in prior years, pharmacies linked to the three largest pharmacy benefit managers (PBMs) accounted for two-thirds of prescription revenues from pharmacy-dispensed specialty drugs. We also explore how these pharmacies contribute to PBMs’ profitability—and spotlight the growing influence of provider- and health system-owned dispensing channels.
Once again, “specialty” mostly means affiliated with a PBM.
In today’s fast-moving pharmaceutical marketplace, insight is everything. Whether you're building trust with customers, launching new products, or guiding internal teams, understanding the economic forces that shape drug distribution, reimbursement, and pricing is essential.
At Drug Channels Institute (DCI), we know how critical this knowledge is—and how hard it can be to find credible, up-to-date training that fits into a busy professional’s schedule. That’s why we created our DCI eLearning Modules: a suite of six interactive, expertly narrated courses that deliver must-know insights in 45 minutes or less.
These modules were built from the ground up for pharmaceutical professionals—from seasoned experts to newcomers looking to understand the industry's complex web of relationships. Each course distills our signature Drug Channels expertise into engaging, bite-sized lessons that are ideal for:
Sales and field teams: seeking clearer context for their customer conversations
Market access, training, and internal strategy groups: who need to understand payer and channel dynamics
Any professional: ready to level up their understanding of pharmaceutical economics
Each module features:
Interactive graphics and animations for improved retention
Expert voice-over narration to guide you through complex topics
References to key DCI reports for optional deep dives
iPad compatibility for learning on the go
The modules are available only via a site-wide license, giving your entire organization access through your internal learning platform. We also offer licenses to our secure hosted learning environment—no internal setup required! (Sorry, individual licenses are not currently available.)
What You’ll Learn: A Snapshot of Each Module
1. Follow the Dollar: How Funds Flow in the Distribution and Reimbursement Channels
This foundational course breaks down the financial and product flows in U.S. pharmaceutical distribution. You'll learn how money and medicines move between manufacturers, wholesalers, pharmacies, PBMs, and payers—and how each relationship affects costs and outcomes.
2. The Economics of Retail, Mail, and Specialty Pharmacies
Gain a clear-eyed view of how different pharmacy channels generate revenue and manage costs. Understand reimbursement dynamics, cost estimation methods, and how profitability varies across drug types and dispensing models.
3. The Business of Specialty Pharmacy
Specialty drugs are revolutionizing care—and reshaping the pharmacy business. This module explores how these products are distributed, covered by insurance, and supported through value-added services.
4. The Economics of Provider-Administered Specialty Drugs
Navigate the unique dynamics of provider-administered drugs, from buy-and-bill systems to ASP reimbursement. Understand how coverage types, care sites, and financial relationships affect access and profitability.
5. Understanding Pharmacy Benefit Managers
PBMs wield enormous influence—but many professionals may not fully understand their true impact. Learn how PBMs operate, where they make money, and how they interact with manufacturers, payers, and pharmacies.
6. Pharmaceutical Wholesalers: Business Strategies and Financial Economics
Take a deep dive into how wholesalers operate, generate profits, and provide critical services. You’ll come away understanding the difference between full-line wholesalers and specialty distributors—and why that matters for your strategy.
Bottom line: If you or your team work in any part of the pharmaceutical value chain, DCI’s eLearning modules will make you smarter, faster. They’re the shortest path to mastering the industry's most important (and most misunderstood) topics.
ICYMI, the largest three pharmaceutical wholesalers—Cardinal Health, Cencora, and McKesson—are using vertical integration to build significant market positions in businesses beyond drug distribution.
In the video clip below, I review the vertical integration status of the largest three pharmaceutical wholesalers, illustrated in the chart below.
[Click to Enlarge]
I also:
Explain how wholesalers have strengthened their position in buy-and-bill channels for provider-administered drugs through vertical integration with their downstream customers.
Discuss how and why private equity roll-up activity has provided wholesalers with strategic opportunities to acquire ownership stakes in practice management companies.
Outline the market access implications for provider-administered biosimilars in the buy-and-bill market.
It’s time to pay attention to the money behind the 340B curtain.
Minnesota just released the industry‘s first ever mandated financial report on the 340B Drug Pricing Program. Below, I do a wicked deep dive into the data and highlight crucial implications about spending, profits, pharmacies, plans, patients, program integrity, and more.
There are important limitations to these data. But Minnesota’s report marks a valuable first step on the yellow brick road to the wonderful world of transparency. I suspect similar reports are gonna be popular.
For 2025, the three largest pharmacy benefit managers (PBMs)—Caremark (CVS Health), Express Scripts (Cigna), and Optum Rx (United Health Group)—have again each excluded hundreds of drugs from their standard formularies. You can find our updated counting below.
As you’ll see below, the combination of formulary exclusion and private labels is creating an increasingly confusing and crowded biosimilar marketplace.
For 2025, the Big Three PBMs shifted national formularies to favor their private-label biosimilars over Humira and its many biosimilar competitors. In fact, nearly all marketed Humira biosimilars are excluded from the larger PBMs’ 2025 formularies. Meanwhile, Stelara—this year’s big pharmacy benefit biosimilar launch—remains on the PBMs’ formularies, but will share space with PBMs’ private label products.
Like it or not, PBMs’ financial benefits from their private-label product align with the benefits to plan sponsors and patients. But the PBMs’ strategies, combined with the warped incentives baked into the Inflation Reduction Act, raise questions about the viability of the biosimilar marketplace.
For 2024, DCI estimates that total prescription dispensing revenues at retail, mail, long-term care, and specialty pharmacies reached $683 billion, up 9% from the 2023 figure. GLP-1 agonist drugs remained the most significant driver of prescription revenue at retail pharmacies, accounting for more than 80% of dispensing revenue growth for 2024.
The table below—one of 268 in our new report—cues up DCI's first look at the 15 largest organizations that battled for those revenues. For a sneak peek at the complete report, click here to download our free 30-page report overview (including key industry trends, What's New in this edition, the Table of Contents, and a List of Exhibits). We’re offering special discounted pricing if you order before March 31, 2025.
Valentine’s Day is almost here! So, it’s time for our romantic review of plan sponsors’ sweetheart: the accumulators and maximizers that divert manufacturers’ copay support payments away from patients—and toward plans and PBMs.
As of late 2024, more than 40% of commercially insured lives were in plans that utilize a copay accumulator or a maximizer. Thanks to a potent combination of payer savings and PBM profits, maximizers are now more beloved than copay accumulators. Check out the data below.
DCI estimates that that plans and their vendors receive about $6.5 billion of manufacturers’ copayment support funds. Given the money at stake, plans will keep wooing this money away from patients. Will legislators let this love continue to bloom? Read on and let me know what you think.
ICYMI, the largest three pharmaceutical wholesalers—Cardinal Health, Cencora, and McKesson—are using vertical integration to build significant market positions in businesses beyond drug distribution.
In the video clip below, I review the vertical integration status of the largest three pharmaceutical wholesalers, illustrated in the chart below.
[Click to Enlarge]
I also:
Explain how wholesalers have strengthened their position in buy-and-bill channels for provider-administered drugs through vertical integration with their downstream customers.
Discuss how and why private equity roll-up activity has provided wholesalers with strategic opportunities to acquire ownership stakes in practice management companies.
Outline the market access implications for provider-administered biosimilars in the buy-and-bill market.
For 2025, the three largest pharmacy benefit managers (PBMs)—Caremark (CVS Health), Express Scripts (Cigna), and Optum Rx (United Health Group)—have again each excluded hundreds of drugs from their standard formularies. You can find our updated counting below.
As you’ll see below, the combination of formulary exclusion and private labels is creating an increasingly confusing and crowded biosimilar marketplace.
For 2025, the Big Three PBMs shifted national formularies to favor their private-label biosimilars over Humira and its many biosimilar competitors. In fact, nearly all marketed Humira biosimilars are excluded from the larger PBMs’ 2025 formularies. Meanwhile, Stelara—this year’s big pharmacy benefit biosimilar launch—remains on the PBMs’ formularies, but will share space with PBMs’ private label products.
Like it or not, PBMs’ financial benefits from their private-label product align with the benefits to plan sponsors and patients. But the PBMs’ strategies, combined with the warped incentives baked into the Inflation Reduction Act, raise questions about the viability of the biosimilar marketplace.
This week, I’m rerunning some popular posts while I prepare for tomorrow’s Drug Channels Outlook 2025 live video webinar. During the webinar, I'll share some thoughts on how vertical integration will affect the buy-and-bill channel.
Time for DCI’s annual update on the channels for provider-administered drugs. Below, I review the latest data on 2024 trends and compare them to the pre-pandemic figures.
For 2024, payers report that specialty pharmacies—via white and clear bagging—have displaced buy-and-bill for a meaningful share of commercial covered lives utilizing provider-administered oncology drugs. However, provider pushback has limited specialty pharmacies' share gains, so that buy-and-bill remains the most common channel for these products.
Payers’ adoption of white bagging—and provider’s push back—reflect the ongoing battle for oncology margin in U.S. drug channels. Let’s hope that patients don’t get caught in the crossfire.
This week, I’m rerunning some popular posts while I prepare for Friday’s Drug Channels Outlook 2025 live video webinar. During the webinar, I'll provide an update the 340B program, which continues to defy gravity. Click here to see the original post.
In my recent The 340B Drug Pricing Program: Trends, Controversies, and Outlook video webinar, I provided an update on the economics of the 340B program, reviewed the multiple controversies surrounding the program’s operations, discussed state and federal legislation, and analyzed how the Inflation Reduction Act of 2022 (IRA) will alter the 340B market.
In the video excerpt below, I walk through a brief history of 340B contract pharmacies. I then document how five multi-billion-dollar, for-profit, publicly traded pharmacy chains and pharmacy benefit managers (PBMs)—Cigna (via Express Scripts), CVS Health, UnitedHealth Group (via OptumRx), and Walgreens, Walmart—continue to dominate the 340B contract pharmacy market. I conclude with a “follow the dollar” example of 340B prescription economics with contract pharmacies.
This week, I’m rerunning some popular posts while I prepare for Friday’s live video webinar: 
This week, I’m rerunning some popular posts while I prepare for Friday’s live video webinar: 
This week, I’m rerunning some popular posts while I prepare for tomorrow’s live video webinar: 
This week, I’m rerunning some popular posts while I prepare for Friday’s live video webinar: 
This week, I’m rerunning some popular posts while I prepare for Friday’s live video webinar: 
