Category: Benefit Design

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Benefit Design, Costs/Reimbursement, Health Care Policy, Medicare Part D, PBMs

Drug Prices After the Midterms: Five Crucial Implications of Pharmacy Benefit Design

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After Tuesday’s election, House minority leader Nancy Pelosi pointed to “reducing the cost of prescription drugs” as a legislative priority. But addressing patient affordability issues will require more than decrying “high drug prices.” Today, I highlight five implications of these benefit designs on patient affordability, out-of-pocket costs, and perceptions of prescriptions prices. My observations are based on Employer Pharmacy Benefits in 2018: More Tiers, Greater Coinsurance, and Lots of High-Deductible Plans, in which I summarized companies’ 2018 prescription drug coverage for their employees. As I explain below, many aspects of employers’ plans are unfriendly to patients with serious medical conditions … Continue reading Drug Prices After the Midterms: Five Crucial Implications of Pharmacy Benefit Design

Benefit Design, Costs/Reimbursement, Generic Drugs, Industry Trends, PBMs, Specialty Drugs

Employer Pharmacy Benefits in 2018: More Tiers, Greater Coinsurance, and Lots of High-Deductible Plans

Admin

It’s time for a deep dive into the 2018 Kaiser Family Foundation Employer Health Benefits Survey, which you can read online for free. The survey provides valuable national benchmarking for employer-sponsored health coverage in 2018. If you’d rather not to wade through the entire report, please enjoy my highlights on prescription coverage below. I summarize employers’ 2018 pharmacy benefits by examining (1) cost sharing tier structures, (2) prevalence of copayment vs. coinsurance, and (3) average copayments and coinsurance rates, by formulary tier. I breakdown the 2018 results for plans with and without high deductibles. For 2018, employers continue to increase … Continue reading Employer Pharmacy Benefits in 2018: More Tiers, Greater Coinsurance, and Lots of High-Deductible Plans

Average Acquisition Cost (AAC), Benefit Design, PBMs, Pharmacy

PBM Pricing Overhaul: Express Scripts Prepares for a World Without Rebates—But Employers May Not Change

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This week, Express Scripts announced an innovative pharmacy benefit contracting model for members of the National Drug Purchasing Coalition (NDPC), a group of 18 large employers. Click here to read the fully-titled press release. You should pay close attention to this b.i.g. news. It is structured so that Express Scripts will not profit from the flow of funds from a brand-name manufacturer to a plan sponsor. What’s more, the PBM’s compensation will be fully delinked from drug list prices. Instead, Express Scripts will earn only fixed management fees plus additional at-risk compensation tied to clinical outcomes. I spoke to Express … Continue reading PBM Pricing Overhaul: Express Scripts Prepares for a World Without Rebates—But Employers May Not Change

Benefit Design, Medicare Part D, Narrow Networks, Pharmacy

The Law of Holes: Some Independents Skip 2019 Part D Preferred Pharmacy Networks

Admin

Last week, I highlighted the largest pharmacy chains that will participate in next year’s Medicare Part D prescription drug plans (PDP). Today, I examine independent pharmacies’ participation via the pharmacy services administrative organizations (PSAOs) that represent these pharmacies in negotiations with plans. This year’s results show a major divergence in strategies. Three of the four biggest PSAOs will participate in a comparable number of Part D networks, as the big chains do. AmerisourceBergen’s Elevate network, however, continues to go its own way and will skip preferred status in the major Part D networks. You will find its reasoning below. Are … Continue reading The Law of Holes: Some Independents Skip 2019 Part D Preferred Pharmacy Networks

Benefit Design, Medicare Part D, Narrow Networks, PBMs, Pharmacy

Battle Royale: CVS and Kroger Gain, Walgreens Slips in 2019 Part D Preferred Pharmacy Networks

Admin

In Humana Triggers a Pullback for Preferred Pharmacy Networks in 2019 Medicare Part D , I highlighted how preferred pharmacy networks will dominate next year’s Medicare Part D prescription drug plans (PDP). Today, I examine chain pharmacies’ participation in 24 major 2019 Part D preferred networks. Some highlights: CVS, for the second year, has strengthened its position as a preferred pharmacy in many 2019 networks. Walmart and Kroger have maintained the strong positions that they have established over the past few years. Walgreens, however, has slipped as the other chains grow. Poor ol’ Rite Aid will again be a preferred … Continue reading Battle Royale: CVS and Kroger Gain, Walgreens Slips in 2019 Part D Preferred Pharmacy Networks

Benefit Design, Medicare Part D, Narrow Networks, PBMs, Pharmacy

EXCLUSIVE: Humana Triggers a Small Pullback for Preferred Pharmacy Networks in 2019 Medicare Part D (Plus: Top Sponsors and CVS Health’s POS Plan)

Admin

The Centers for Medicare & Medicaid Services (CMS) has recently released the initial raw data on the 2019 Medicare Part D plans. Our exclusive analysis of these data reveals that preferred cost sharing pharmacy networks will be slightly less popular next year. For 2019, 92% of Medicare Part D regional prescription drug plans (PDP) will have a preferred network. This figure compares with 99% of plans in 2018. The decline will occur primarily because two Humana plans will switch from preferred to open networks for 2019. Below, I provide historical context on preferred networks’ growth and then discuss the top … Continue reading EXCLUSIVE: Humana Triggers a Small Pullback for Preferred Pharmacy Networks in 2019 Medicare Part D (Plus: Top Sponsors and CVS Health’s POS Plan)

Benefit Design, Co-pay Offset Programs, Copay Accumulator Adjustment, Costs/Reimbursement, Marketing, PBMs

Copay Accumulator Update: Widespread Adoption As Manufacturers and Maximizers Limit Patient Impact

Admin

In January, I alerted you to an important new benefit design trend in Copay Accumulators: Costly Consequences of a New Cost-Shifting Pharmacy Benefit. It is by far the most widely read article ever published on Drug Channels. New data from Zitter Health insights (ZHI) suggest that these programs are widely used. Nearly one-third of commercially-insured lives are enrolled in plans that have implemented copay accumulator adjustment or closely-related copay maximizers. (We explain the benefit design math behind maximizers below.) ZHI also found that a surprising number of plans are already set up to use these programs, but have not done so … Continue reading Copay Accumulator Update: Widespread Adoption As Manufacturers and Maximizers Limit Patient Impact

Benefit Design, Costs/Reimbursement, PBMs, Specialty Drugs

Who Best Managed the Drug Spending Slowdown in 2017: CVS Health, Express Scripts, MedImpact, or Prime Therapeutics? (rerun)

Admin

This week, I’m rerunning some popular posts before the Labor Day weekend. Click here to see the original post and comments from May 2018. It’s time for Drug Channels’ annual analysis of drug spending. For 2017, we again turn to the annual trend reports from four large pharmacy benefit managers (PBMs)—CVS Health, Express Scripts, MedImpact, and Prime Therapeutics. (See their report links below.) Below, I compare who’s better and who’s best among the PBMs and share additional observations about the 2017 trends. We offer four key conclusions: Drug spending grew by only 1.5% in 2017, continuing a multiyear decline in … Continue reading Who Best Managed the Drug Spending Slowdown in 2017: CVS Health, Express Scripts, MedImpact, or Prime Therapeutics? (rerun)

Benefit Design, Costs/Reimbursement, PBMs, Specialty Drugs

2019 Express Scripts Formulary Exclusions: Hepatitis C Changes Show Why the Drug Channel Must Change, Too

Admin

Last week, Express Scripts released the 2019 updates to its formulary exclusion lists. They are available below for your downloading pleasure. Unfortunately, CVS Health won’t release its list until October. For 2019, Express Scripts was more aggressive than ever, expanding its list to more than 240 excluded products. For the first time, it excluded products in two specialty categories: HIV antiretrovirals and Factor VIII recombinant products. It also added a new exclusion in multiple sclerosis. Oddly, Express Scripts has made a patient unfriendly change to the hepatitis C category. It has excluded AbbVie’s Mavyret, the market share leader with a … Continue reading 2019 Express Scripts Formulary Exclusions: Hepatitis C Changes Show Why the Drug Channel Must Change, Too

Benefit Design, Costs/Reimbursement, Health Care Policy, Marketing, PBMs

New Disclosures Show CVS and Express Scripts Can Survive in a World Without Rebates. Are Plan Sponsors Now the Real Barrier to Disruption?

Admin

Last week, the two largest pharmacy benefit managers (PBMs)—CVS Health and Express Scripts—both stated that rebates now account for a small part of their profits. The companies therefore strongly implied that they could survive in a world in which PBMs did not participate in the flow of funds from a brand-name manufacturer to a plan sponsor. Below, I unpack the new disclosures, which move us materially closer to a new model. Hmm. The two biggest PBMs and at least one major manufacturer (Pfizer) have now implied a willingness to change. So what’s to stop massive drug channel disruption? CVS Health … Continue reading New Disclosures Show CVS and Express Scripts Can Survive in a World Without Rebates. Are Plan Sponsors Now the Real Barrier to Disruption?