Category: Benefit Design

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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

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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)

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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

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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?

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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?

340, Average Sales Price (ASP), Benefit Design, Buy-and-Bill, Channel Management, Costs/Reimbursement, Hospitals, Physicians, Specialty Drugs

Still Possible: Hospitals Overcharge Health Plans for Specialty Drugs

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Over the years on Drug Channels, I have explained the two primary reasons a drug’s list price doesn’t reflect what a third-party payer actually spends for that drug: (1) channel intermediaries and providers add markups that account for the costs, profits, and value of the services, and (2) manufacturers provide rebates and discounts to third-party payers. Two recently-released reports confirm the often-overlooked magnitude of provider markups. As you will see below, commercial payers use reimbursement approaches that permit hospitals to inflate specialty drug costs by thousands of dollars per claim when compared with physician offices. This is not about differences … Continue reading Still Possible: Hospitals Overcharge Health Plans for Specialty Drugs

Benefit Design, Costs/Reimbursement, Industry Trends, PBMs

The Gross-to-Net Bubble Topped $150 Billion in 2017 (rerun)

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This week, I’m rerunning some popular posts before the holiday week. Click here to see the original post and comments from April 2018.  You can also reach this post at www.GrossToNetBubble.com. 😉 In 2017, the gross-to-net bubble—the ever-growing pile of money between a manufacturer’s list price for a drug and the net price after rebates and other reductions—hit a new high. Based on new data from IQVIA, manufacturers of brand-name drugs in 2017 reduced list price revenues by an astonishing $153 billion. Those reductions came primarily from rebates, discounts, and other payments to the drug channel. That figure has grown … Continue reading The Gross-to-Net Bubble Topped $150 Billion in 2017 (rerun)

Benefit Design, Costs/Reimbursement, PBMs, Specialty Drugs

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

Admin

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 the growth rate. Total drug spending declined at more than 40% of plan sponsors. Spending on traditional drugs dropped by mid-single digits. For specialty … Continue reading Who Best Managed the Drug Spending Slowdown in 2017: CVS Health, Express Scripts, MedImpact, or Prime Therapeutics?

Benefit Design, Costs/Reimbursement, PBMs

Employers Are Getting More Rebates Than Ever—But Sharing Little With Their Employees (rerun)

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This week, I’m rerunning some popular posts while I attend Asembia’s 2018 Specialty Pharmacy Summit. Click here to see the original post and comments from January 2018. Yesterday, I examined new data showing that employers are receiving an increasing share of the rebate money collected by pharmacy benefit managers. See Employers Are Extracting More of Their Rebate Dollars from PBMs. The data, from a Pharmacy Benefit Management Institute (PBMI) survey, also documented a troubling reality. Employers acknowledged that they are hoarding rebates rather than sharing the savings with the employees whose prescriptions generated the rebate funds. It’s the first time … Continue reading Employers Are Getting More Rebates Than Ever—But Sharing Little With Their Employees (rerun)

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

Copay Accumulators: Costly Consequences of a New Cost-Shifting Pharmacy Benefit (rerun)

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This week, I’m rerunning some popular posts while I attend Asembia’s 2018 Specialty Pharmacy Summit. Click here to see the original post and comments from January 2018. Let’s kick off 2018 with a Last Jedi-themed look at copay accumulator programs—a benefit design option that I expect to become highly controversial this year. Accumulator programs target specialty drugs for which a manufacturer provides copayment assistance. Unlike conventional benefit designs, the manufacturer’s payments no longer count toward a patient’s deductible or out-of-pocket maximum. As you will see below, plan sponsors—employers and health plans—will save big money because accumulators shift a majority of … Continue reading Copay Accumulators: Costly Consequences of a New Cost-Shifting Pharmacy Benefit (rerun)

Benefit Design, Channel Management, Copay Accumulator Adjustment, Costs/Reimbursement, PBMs, Pharmacy, Pharmacy Economics

Drug Channels News Roundup, April 2018: Copay Accumulators, Express Scripts, Pharmacy Pricing, Amazon, and Almost-Pharmacist Jack Nicklaus

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Baseball season is finally here! Oil up your glove, lace up your cleats, and let’s run the bases around this month’s news stories. Remember: Sometimes you win, sometimes you lose, and sometimes it rains. In this issue: Green Monster: The drug manufacturers that are most vulnerable to copay accumulators Pop Fly: Express Scripts wants to pop the gross-to-net bubble? Foul! Fresh evidence that uninsured consumers pay rip-off cash prices at retail pharmacies Strikeout: My $0.02 on Amazon’s decision not to sell drugs to hospitals Plus, from the diamond to the green: the secret pharmacy history of golf legend Jack Nicklaus. … Continue reading Drug Channels News Roundup, April 2018: Copay Accumulators, Express Scripts, Pharmacy Pricing, Amazon, and Almost-Pharmacist Jack Nicklaus