Drug Channels News Roundup, July 2019: Amazon/PillPack, Novo Nordisk on the G2N Bubble, Copay Accumulators, and Adam's Favorite Chart

Let’s cut through the steamy summer haze with our refreshing selection of articles and insights. In this issue:

• New details about Amazon’s PillPack deal

• Novo Nordisk’s CEO on the gross-to-net bubble

• Fresh data on adherence problems with copay accumulators

• My all-time favorite chart!

Plus, I am dazed and confused by a Specialty Pharmacy Times article.

P.S. Stay current with my daily links to cool stuff at @DrugChannels on Twitter.

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ON SALE! We are offering our 2018–19 Economic Report on Pharmaceutical Wholesalers and Specialty Distributors at discounts up to 30% off. Sales prices valid thru 9/3/19. The updated 2019-20 edition will be available in early October 2019.

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CBI’s 5th Annual Life Sciences Compliance Congress for Specialty Products

CBI’s 5th Annual Life Sciences Compliance Congress for Specialty Products
September 12-13, 2019 | Hyatt Regency | Cambridge, MA
www.cbinet.com/SpecialtyCompliance

CBI’s 5th Annual Life Sciences Compliance Congress for Specialty Products conference, taking place September 12-13 in Cambridge, MA, is tailored to the distinctive business needs and compliance challenges of specialty biotech and pharmaceutical manufacturers.

Exclusive Offer for Drug Channels Readers: Register Now to SAVE $400* using promo code TXF846

This CCB, CPE, CLE accredited conference provides numerous interactive sessions, panel discussions and networking events, optimizing face-to-face engagement with fellow compliance and legal industry professionals, including:

• Create your own tailored conference experience with 4 comprehensive breakout sessions
• Gain insights into the government perspective with a keynote panel featuring U.S. Attorneys from the District of Massachusetts, District of New Jersey and Southern District of New York
• Deep dive into patient support and assistance with 3 focused afternoon sessions highlighting compliant patient interactions, nurse educator programs and copay assistance
• Hear about the successes and letdowns of building compliance programs from the ground-up during the closing fireside chat with senior thought leaders
• PLUS! This year will include the inaugural, invitation-only Legal & Compliance Leadership Summit, designed to encourage an open exchange of ideas and strategies surrounding some of the most critical issues facing compliance leaders across the industry

Hear valuable content on high-impact issues for breakthrough therapies from 40+ industry leaders including Acceleron Pharma, Sobi, Vertex Pharmaceuticals, EMD Serono, Radius Health, Sanofi Genzyme, Sarepta Therapeutics, Sunovion, Strongbridge BioPharma, TherapeuticsMD, Avanir Pharmaceuticals, TESARO, Servier Pharmaceuticals, Alexion, Akebia Therapeutics, Takeda, Sage Therapeutics, Boehringer Ingelheim, Boston Biomedical, Blueprint Medicines and more!

Visit www.cbinet.com/SpecialtyCompliance to view the complete speaker and in-depth session lineup, then register using promo code TXF846 for this exclusive savings of $400 off!*

*Discount expires 9/11/19; cannot be combined or applied to existing registration. Other restrictions may apply.

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The content of Sponsored Posts does not necessarily reflect the views of Pembroke Consulting, Inc., Drug Channels, or any of its employees.

Improving Medication Access Through Network Connections to Impact More Patients

Today’s guest post comes from David Holladay, President of CoverMyMeds.

David discusses the obstacles and frustrations patients experience as they navigate the patient journey. He describes CoverMyMeds’ technology solutions that have helped solve medication access and adherence challenges for patients.

To learn more about technology-enabled patient support, download this new case study: Comprehensive Prior Authorization Support to Help Impact More Patients.

Read on for David’s insights.

Our STAT Op-Ed: Drug Importation Can’t Coexist with U.S. Track-and-Trace Law

STAT recently published our op-ed: State drug importation laws undermine the process that keeps our supply chain safe.

I co-authored this op-ed with Dirk Rodgers, an independent consultant and author of the excellent RxTrace blog.

As we see it, there is no legal or operational way of transforming a drug packaged for a foreign market into a drug that meets the U.S. requirements of our in-progress track-and-trace system. What’s more, there is no way to alter the law to enable importation without undermining the law’s purpose and value.

States can't wish away the requirements of a significant federal law. Either we have a secure drug supply chain or we don’t.

Note that our op-ed was published before Canada announced that it would resist drug exportation.

Full text below. Read on and let us know what you think.

CBI’s 13th Hub and SPP Model Optimization

CBI’s 13th Hub and SPP Model Optimization
September 26-27, 2019 | San Diego, CA
www.cbinet.com/hubswest

With mounting cost pressures and increased demands for affordable, value-based treatment options, our industry faces an increasingly competitive market, for both specialty and non-specialty products. Increasingly, companies must strategize to manage the most critical challenges associated with product and patient services. CBI’s 13th Hub and SPP Model Optimization provides executives with strategies for developing and integrating hub programs and other patient-centric services to ensure product access and maximize reimbursement.

Visit www.cbinet.com/hubswest for further details and to register. Drug Channels readers will save $300 off the standard rate when they use discount code YZN462 and register prior to August 9th.*

Just a few highlights from the program include:

• Current litigation/court rulings that impact Hub and SP Models
• Integration of medical and pharmacy benefits
• AI across patient access programs to improve conversion and adherence
• Key learnings on aligning patient services and market access for rare disease launch success
• Examining EHR data to generate claims data and understand care episodes to see the effectiveness of a therapy
• Evaluating key patient and therapeutic traits that influence hub model design
• Best practices for combining data sources to provide a complete picture of the patient journey
• Tips to prepare for the hubs of the future and designing patient-centric hub models

Download the agenda here and prepare to return to the office armed with critical updates and valuable takeaways.

Visit www.cbinet.com/hubswest for further details and to register. Drug Channels readers will save $300 off the standard rate when they use discount code YZN462 and register prior to August 9th.*

CBI will see you there!

*Cannot be combined with other offers or used towards a current registration. Cannot be combined with special category rates, clinic/hospital rates, non-profit rates or other offers. Other restrictions may apply.

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The content of Sponsored Posts does not necessarily reflect the views of Pembroke Consulting, Inc., Drug Channels, or any of its employees.

Expanding Patient Engagement in Commercial Healthcare

Today’s guest post comes from Pritesh Patel, Commercial Segment Director of Clinical Effectiveness at Wolters Kluwer, Health.

Pritesh presents a case study of how technology improved patient engagement, which translated into better patient health outcomes. To learn more, download their complete ebook: Patient Engagement in Commercial Health.

Read on for Pritesh’s insights.

Walgreens, CVS, and Walmart Lead the 25,000 Pharmacies Now Profiting From the 340B Program

It’s time for our annual look at the booming pharmacy component of the 340B Drug Pricing Program. Our latest, exclusive analysis finds that:

• About 25,000 pharmacy locations now act as contract pharmacies for the hospitals and other healthcare providers that participate in the 340B program. Contract pharmacies now account for almost 40% of all pharmacy locations in the United States. Wow.

• The total number of pharmacy locations has grown by 14% over the past 12 months and has almost doubled since 2013.

• Six large retail chains—Walgreens, CVS, Walmart, Rite Aid, Kroger, and Albertsons—account for two-thirds of 340B contract pharmacy locations. CVS added 1,200 locations—as many as the other five chains combined.

Clearly, multi-billion-dollar, for-profit, publicly traded pharmacy chains are benefiting from the 340B discounts intended for covered entities. Below, I offer some policy suggestions so that we can better understand what's going on here.

In upcoming articles, I’ll examine pharmacy benefit manager (PBM) and specialty pharmacy participation in 340B and explain the oversize profits that pharmacies can earn from the program.

For now, you should ponder how and why the 340B program continues its unbridled takeover of the pharmacy industry...and beyond.

JAMA: Withdraw This Flawed and Inaccurate Article About the 340B Program and Drug Prices

The Journal of the American Medical Association (JAMA) recently published Estimated Changes in Manufacturer and Health Care Organization Revenue Following List Price Reductions for Hepatitis C Treatments by Sean Dickson and Ian Reynolds. The paper purports to show that manufacturers’ net revenues increased following a decrease in three drugs’ list prices.

However, the paper contains a significant computational error: The authors do not properly calculate the 340B ceiling price. Consequently, the authors’ calculations are inaccurate and their conclusions are erroneous. As we might expect, a manufacturer’s revenue per-patient doesn’t increase when list prices decline and net prices remain constant.

Below, I explain how to compute a drug’s ceiling price under the 340B Drug Pricing Program. I then illustrate the crucial mathematical error in the JAMA paper. I also briefly highlight a few other errors and omissions in the paper.

The paper’s serious and irredeemable flaws imply that readers will be significantly misinformed about drug prices and the 340B program. You may or may not agree with me about the 340B program. But I hope you will concur that respected academic journals should publish truthful and accurate information.

CBI’s 3rd Annual Finance & Account for Bioscience Companies

CBI’s 3rd Annual Finance & Account for Bioscience Companies
September 24-25, 2019 | Boston Marriott | Cambridge, MA
www.cbinet.com/BioFinance

Exclusive Offer for Drug Channels Readers:

Register Now to SAVE $400* using promo code ACC400

CBI’s Finance & Accounting for Bioscience Companies conference, taking place September 24-25 in Cambridge, MA, is tailored to the distinctive business needs and technical accounting challenges of small-middle market biotech, pharmaceutical and device companies.

During this CPE, CLE accredited conference, Finance and Accounting executives gain commercialization and product launch strategies, frameworks for managing gross-to-net estimates and mitigating risk, models to scale and grow a best-in-class finance function, timely updates on tax and legal matters, systems implementation case studies and industry expertise for communications and investor relations.

Hear valuable content on high-impact issues from CFOs, chief accountants, corporate controllers and more from a broad range of life sciences companies, including those representing Neon Therapeutics, Alnylam, Akcea Therapeutics, Karyopharm, Ironwood Pharmaceuticals, RSM US LLP, Spring Bank Pharmaceuticals, Shire, Karuna Therapeutics, Novapeutics, Sunovion Pharmaceuticals, Bluerock Therapeutics, Merck and more! Plus, attendees choose from two tracks of sessions, one tailored for Clinical-Stage Companies and one tailored for Commercial-Stage Companies.

Visit cbinet.com/BioFinance to view the complete speaker and in-depth session lineup, then register using promo code ACC400 for this exclusive savings of $400 off!

*Discount expires 9/23/19; cannot be combined or applied to existing registration. Other restrictions may apply.

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The content of Sponsored Posts does not necessarily reflect the views of Pembroke Consulting, Inc., Drug Channels, or any of its employees.

Six Reasons Why the Rebate Rule Failed—And What’s Next

Yesterday, we all awoke to the unexpected news that the Department of Health & Human Services (HHS) withdrew its plans to reform rebates in federal programs. The world without rebates has been delayed—perhaps indefinitely.

Below, I highlight six key policy and political factors behind this decision. I also discuss winners and losers among drug channel participants.

The underlying problems of the the gross-to-net bubble remain. As H.L. Mencken observed: “There is always a well-known solution to every human problem—neat, plausible, and wrong.” Get ready for a slew of drug pricing policy proposals that perfectly fit these criteria.

The Gross-to-Net Bubble Reached a Record $166 Billion in 2018 (rerun)

This morning, the White House withdrew its proposed rule to reform the rebate system in federal programs. I am surprised by the timing, which likely has more to do with politics than policy. Tomorrow, I'll post some reflections on this unexpected news. 

In the meantime, today's rerun is a reminder of what's still at stake in reforming rebates within the U.S. drug channel
. 
Click here to see the original post and comments from April 2019. You can also reach this post at www.GrossToNetBubble.com. ;)

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The gross-to-net bubble—the ever-growing pile of money that sits between a manufacturer’s list price for a drug and the net price after rebates and other reductions—reached another high last year.

Drug Channels Institute developed the term gross-to-net bubble to describe the speed and size of growth in the total value of manufacturers’ gross-to-net reductions.

We estimate that in 2018, the total value of gross-to-net reductions for brand-name drugs was $166 billion. As you will see below, that figure doubled over the preceding six years. Below, I also highlight the various elements that fill the bubble. About two-thirds of total gross-to-net reductions come from rebates paid to third-party payers.

The gross-to-net bubble reflects—and drives—many of the problems with U.S. drug pricing. However, recent movement toward a world without rebates suggests that we may soon hear this bubble pop.

How Health Plans Profit—and Patients Lose—From Highly Rebated Brand-Name Drugs (rerun)

This week, I’m rerunning some popular posts during the holiday week. Click here to see the original post and comments from February 2019.

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My Wall Street Journal op-ed (Don’t Blame Drug Prices on ‘Big Pharma’) has received a lot of attention.

Especially notable was a letter to the editor from American Health Insurance Plans (AHIP). It claims that “the savings that insurance providers negotiate are returned directly to consumers through lower premiums and out-of-pocket costs."

Don’t believe this misleading half-truth. It distorts the primary argument of my WSJ op-ed: Patients often pay full price for drugs that are sold to insurers at deep discounts.

Below, to show you why, I follow the dollar for an expensive, highly rebated brand-name drug used by a consumer with a high-deductible health plan. As you will see, the consumer pays more than twice the true discounted price of the drug. Meanwhile, the health plan pockets a large rebate.

That's the uncomfortable reality of the gross-to-net bubble that AHIP wants to hide. Insurers may not use rebates to lower the out-of-pocket costs for the patient whose prescription generated the rebate. And at the same time, AHIP indignantly blames "the prices drugmakers set." We all deserve better.