What I told Congress about the 340B Program (rerun)

This week, I’m rerunning some popular posts while I prepare for today's live video webinar: Drug Channels Quarterly Update: Patients, Payers, and PBMs.

Click here to see the original post and comments from November 2020.

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ICYMI, House Energy and Commerce Committee Republican Leader Greg Walden (R-OR) and Senate Health, Education, Labor and Pensions (HELP) Committee Chairman Lamar Alexander (R-TN) recently asked for input on how to improve the 340B Drug Pricing Program. Comments were due last Friday (October 30).

Your friendly neighborhood blogger submitted an 11-page letter, which you can read below. I shared my $0.02 on the overall market, explained channel distortions from 340B contract pharmacies, and offered some policy recommendations.

Click here to read the Drug Channels Institute letter
to Senator Alexander and Representative Walden.

For your reference, I also include links to published comments from the American Hospital Association and the Pharmaceutical Research and Manufacturers of America.

The new Congress has an ambitious agenda. Let’s hope modernizing 340B gets on the do list.

Drug Pricing Policy in 2021: Four Crucial Consequences of Pharmacy Benefits Today (rerun)

This week, I’m rerunning some popular posts while I prepare for tomorrow's live video webinar: Drug Channels Quarterly Update: Patients, Payers, and PBMs.

Click here to see the original post and comments from December 2020.

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When Americans complain about “drug prices,” most are actually complaining about the share of costs they pay—and how those costs are computed. Addressing patient affordability issues therefore requires a deep understanding of the U.S. drug channel.

Today, I review four crucial issues that the new Congress could tackle to address affordability, patients' out-of-pocket obligations, and prescription prices. I also highlight some of the existing and proposed legislative efforts. 

Our complex channel cannot be fixed with simplistic solutions. It may seem unlikely that we will get bipartisan legislation that sensibly addresses the distortions and challenges in our drug pricing system. But I can dream, can’t I?

Surprise! Brand-Name Drug Prices Fell (Again) in 2020 (rerun)

This week, I’m rerunning some popular posts while I prepare for this Friday’s live video webinar: Drug Channels Quarterly Update: Patients, Payers, and PBMs.

Click here to see the original post and comments from January 2021.

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It was another year of unexpected drug price developments.

In 2020, brand-name drug net prices dropped for the third consecutive year. Meanwhile, brand-name drug list prices grew at their slowest rate in at least 20 years. See our updated analysis below.

I also review the factors behind declining brand-name drug prices. These factors are firmly in place for 2021.
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Our new Congress may try tackle drug prices in the new year. Let’s hope that their policy perceptions catch up to today’s realities.

The Big Three PBMs Ramp Up Specialty Drug Exclusions for 2021 (rerun)

This week, I’m rerunning some popular posts while I prepare for this Friday’s live video webinar: Drug Channels Quarterly Update: Patients, Payers, and PBMs.

Click here to see the original post and comments from January 2021.

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Once again, the three largest pharmacy benefit managers (PBMs)—Caremark (CVS Health), Express Scripts (Cigna), and OptumRx (United Health Group)—have increased the number of drugs they have excluded from their standard formularies. 

Today, I update our annual tracking of the number of exclusions by each PBM. I also highlight the expansion of exclusions into major specialty therapy classes. The 2021 formulary exclusion lists are available below for your downloading pleasure.

The growth in excluded products shows how competitive many specialty therapy categories have become—and the undisclosed but presumably significant rebates generated by these products. Patient impact is also increasing, as products move on and off formularies.

Eight years ago, I outlined the inevitability of formulary exclusions. But I didn’t anticipate just how far PBMs would push this tool. Expect much more controversy as exclusions hit previously untouched but sensitive sole-source products in oncology, rheumatology, and beyond—and even start moving into Medicaid.

Reducing Patient Fallout: Transform How They Get and Stay on Medication

Today’s guest post comes from Brian Haenni, Vice President of Hub Solutions at ConnectiveRx.

Brian discusses the benefits of digital patient support services. To learn more about ConnectiveRx’s patient support capabilities, register for their April 14, 2021 webinar, Transforming the Patient Support Experience.

Read on for Brian’s insights.

How GoodRx’s Rapid Growth Creates Conflict between PBMs and Payers

Pharmacy pricing and benefit design are fundamentally broken.

For proof, look at GoodRx’s 2020 financial results for its discount card business. The company accounted for an estimated $3.4 billion in U.S. prescription revenues—and earned nearly $500 million in fees from PBMs.

Incredibly, three out of four consumers who used GoodRx already had commercial, Medicare, or Medicaid insurance. This means that someone—the consumer, their employer, and/or the government—paid insurance premiums for a pharmacy benefit managed by a PBM. Yet it was still worthwhile for people to bypass their plan’s out-of-pocket costs and PBM network rates in favor of a different PBM’s rates. As I explain below, such arbitrage creates potent conflicts between PBMs and their plan sponsor clients.

Don’t blame GoodRx for this mess. I give it credit for helping consumers navigate a crazy system that incentivizes people to bypass their own insurance plans. But it’s hard not to dislike a system that enables these games. Read on and let me know what you think.

NEW: The 2021 Economic Report on U.S. Pharmacies and Pharmacy Benefit Managers

I am pleased to announce our new 2021 Economic Report on U.S. Pharmacies and Pharmacy Benefit Managers, available for purchase and immediate download.

• Click here to download a free report overview (including key industry trends, the Table of Contents, and a List of Exhibits)

• New Drug Channels Institute Study: The Latest Trends for U.S. Drug Pricing, Reimbursement, and Patient Costs (press release)

We’re offering special discounted pricing if you order before March 31, 2021.

The 2021 Economic Report on U.S. Pharmacies and Pharmacy Benefit Managers is a truly unique resource. With 211 proprietary charts, exhibits, and data tables, this 12th edition provides a comprehensive, fact-based, and non-partisan tool for understanding the entire U.S. drug pricing, reimbursement, and dispensing system.

The full document clocks in at 412 pages. I can confidently say there is nothing else available that comes close to this report.

The chart below illustrates the depth and breadth of the 2021 edition. The numbers indicate the report chapter that corresponds to, explains, and analyzes each channel flow.

[Click to Enlarge]

Below, you can read more info and some behind-the-scenes tidbits.

P.S. If you would like to pay by corporate purchase order or check, please email Tamra Feldman. If you preordered the report, you should have already received an email with download instructions. Please contact us if you did not receive the email.

Predicting Payer Uptake With Precision

Today's guest post comes from Carolyn Zele and Ritupriya Yamujala, Senior Solution Consultants at MMIT.

Carolyn and Ritupriya discuss the challenges that manufacturers face in getting payer coverage for new drugs. They argue that a manufacturer can use analogs to improve messaging to payers, identify coverage challenges, and accurately predict payer uptake.

To learn more about these techniques, register for MMIT’s April 6, 2021 webinar: Predicting Payer Uptake With Precision.

Read on for Carolyn’s and Ritupriya’s insights.

The Top 15 U.S. Pharmacies of 2020: Market Shares and Revenues at the Biggest Companies

Next week, Drug Channels Institute will release our 2021 Economic Report on U.S. Pharmacies and Pharmacy Benefit Managers. It’s the 12th edition of our popular and comprehensive examination of the entire drug pricing, reimbursement, and dispensing system. (You can preorder at special discounted prices.)

The exhibit below—one of 211 in our new report—provides a first look at the 15 largest organizations, ranked by total U.S. prescription dispensing revenues for calendar year 2020.

U.S. prescription dispensing revenues reached a record $465 billion in 2020. The largest players all had bigger slices of the revenue pie, due to the growth at specialty pharmacies and multiple transactions that shifted market share among the vertically integrated companies.

For a sneak peek at the complete report, click here to download a free pre-publication draft overview (including the table of contents and a list of exhibits). We’re offering special discounted pricing if you order before March 31, 2021.

The Importance of Immediate Drug Price Transparency

Today’s guest post comes from Edward Hensley, Co-founder and Chief Commercial Officer at AssistRx.

Edward discusses the impact of providing access to drug price transparency and affordability programs to healthcare providers and patients at the point of care.

To learn more about AssistRx’s solutions, visit AssistRx.com.

Read on for Edward’s insights.

NEW: Drug Channels Quarterly Update: Patients, Payers, and PBMs (Live Video Webinar)

Join Dr. Adam J. Fein, CEO of Drug Channels Institute (DCI) and the author of Drug Channels, for his latest exclusive live video webinar:

Drug Channels Quarterly Update: Patients, Payers, and PBMs 

Friday, March 26, 2021 (12:00 p.m. to 1:30 p.m. ET)

This event is part of The Drug Channels 2021 Quarterly Video Webinar Series. Those who have already signed up for the series have been automatically registered for the March webinar.

WHAT YOU WILL LEARN

Dr. Fein will help you and your team stay on top of the latest trends and market data. He will also draw from exclusive information found in our new 2021 Economic Report on U.S. Pharmacies and Pharmacy Benefit Managers.

During this event, Dr. Fein will share his latest thinking on a wide range of topics, including:

• Trends in pharmacy benefit design and consequences for patients' out-of-pocket costs

• COVID-19's impact on the payer mix at the largest insurers

• The industry position and strategies of the largest PBMs, including DCI's exclusive market share data

• A look at PBMs' changing business models

• An update on vertical integration, consolidation, and alliances

• A review of DCI's exclusive analyses of the specialty pharmacy marketplace

• Reflections on drug pricing policy under the Biden administration

• And more!

PLUS: Dr. Fein will take your questions throughout the event, making this our most interactive webinar yet. Plus, we've extended the webinar to 90 minutes to accommodate more audience questions. CLICK HERE to submit questions in advance of the event.

Read on for full details on pricing, including substantial discounts for multiple devices. You can also watch a video invitation.

Supermarkets Outpace CVS and Walgreens in 2021’s Part D Pharmacy Networks

The Centers for Medicare & Medicaid Services (CMS) has recently released its 2021 data on enrollment in Medicare Part D prescription drug plans (PDPs). Our exclusive analysis of these numbers finds that for 2021, an astounding 99% of seniors are enrolled in PDPs with preferred pharmacy networks.

Below, we use the new enrollment data to examine the major pharmacy chains’ position within the 27 major Part D plans that have preferred networks. As you will see, the big supermarket chains—Albertsons, Kroger, and Publix—outpaced the big three drugstore chains and Walmart.

Pharmacies continue to sacrifice margin for store traffic. Don’t expect that to change—especially given the notable failure of the independents-only Indy Health Part D plan.