Category: Benefit Design

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Benefit Design, Costs/Reimbursement, PBMs

Payer Power: Why Eli Lilly, Janssen, and Merck Deeply Discount Their Drug Prices

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Over the past few weeks, three of the largest pharmaceutical manufacturers—Eli Lilly, Janssen, and Merck—have publicly reported the 2017 gross and net price changes for their U.S. product portfolios, along with average discounts. As far as I know, these are the only manufacturers that have publicly reported these data. See the links below. As you will see, the three companies have provided average discounts from list prices of 42% to 51%. Two of the three companies experienced a year-over-year decrease in average net prices. Payers and PBMs frequently recommend that manufacturers just lower the cost of their drugs. These data … Continue reading Payer Power: Why Eli Lilly, Janssen, and Merck Deeply Discount Their Drug Prices

Benefit Design, Buy-and-Bill, Channel Management, Co-pay Offset Programs, Costs/Reimbursement, Hospitals, Physicians, Specialty Drugs

Drug Channels News Roundup, March 2018: Copay Accumulators, Cancer Drug Costs, Physician Employment, and Insurer Profits

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It’s technically spring here at Drug Channels’ worldwide headquarters in lovely downtown Philadelphia. While the last snowdrifts melt into memory, please enjoy this month’s selection of noteworthy news stories. You’ll learn: Why copay accumulators are making national news How hospitals are doubling cancer drug costs Fun facts about the massive shift to hospital-employed physicians Plus, a joke (I think) about how a major health insurer makes money. P.S. Join the nearly 5,400 people who follow me at @DrugChannels on Twitter. I share links to crucial news and reports that you should know about. Read more » Copyright © 2006-2018 Pembroke … Continue reading Drug Channels News Roundup, March 2018: Copay Accumulators, Cancer Drug Costs, Physician Employment, and Insurer Profits

Benefit Design, Medicare Part D, Mergers and Acquisitions, PBMs

Five Takeaways About Cigna’s Strategy for Express Scripts

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Almost three weeks ago, the health insurer Cigna announced that it would acquire the pharmacy benefit manager (PBM) Express Scripts. Click here to read my initial analysis of the deal. Wall Street remains unimpressed. Ever since the transaction was announced, Cigna’s stock price has dropped by 16%. Meanwhile, Express Scripts’ stock is trading more than 20% below Cigna’s offer price, suggesting that many believe the deal won’t be completed. To soothe rattled investors, Cigna last week filed an intriguing SEC Form 425. It contains 31 questions that you may or may not have been asking yourself about its acquisition of … Continue reading Five Takeaways About Cigna’s Strategy for Express Scripts

Benefit Design, Costs/Reimbursement, Marketing, PBMs

Janssen’s New Transparency Report: A Peek Behind the Drug Pricing Curtain Raises Troubling Questions About Rebates

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Johnson & Johnson’s Janssen business unit just released its 2017 Janssen U.S. Transparency Report. (Free download.) This is the second annual edition of the report, which provides a comprehensive look at Janssen’s commercial activities. Most notably, Janssen reveals that the list price for its pharmaceutical products grew by 8.1% in 2017. Its average net prices, however, declined in 2017 by 4.6%. Janssen paid $15 billion in rebates and discounts, which subtracted 42% from its list prices. Kudos to Janssen for providing so much disclosure. Below, I review some key takeaways from this valuable report. We’re left with some key unanswered … Continue reading Janssen’s New Transparency Report: A Peek Behind the Drug Pricing Curtain Raises Troubling Questions About Rebates

Benefit Design, Channel Management, PBMs, Pharmacy, Specialty Drugs

Plan Sponsors Prefer Specialty Pharmacies Over Retail Drugstores

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Top ‘o the morning to you! Let’s take a wee look at the Pharmacy Benefit Management Institute’s (PBMI) new 2018 Trends in Specialty Drug Benefits. (Free download with registration.) It’s a great resource for understanding how plan sponsors manage specialty drugs. The new report contains fascinating data showing how sponsors of employer-based health plans view dispensing channels for specialty drugs. As you will see below, employers believe that the capabilities of specialty pharmacies are superior to those of retail pharmacies. They also think that over the past few years, specialty pharmacies’ performance gap has widened for crucial clinical and patient … Continue reading Plan Sponsors Prefer Specialty Pharmacies Over Retail Drugstores

Benefit Design, Costs/Reimbursement, Health Care Policy, PBMs, Specialty Drugs

UnitedHealthcare’s Point-of-Sale Rebate Announcement: What’s Next?

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Did I just hear the gross-to-net bubble deflate a little bit? This week, UnitedHealthcare announced that it would provide point-of-sale (POS) rebates to 7 million people enrolled in its fully insured commercial group benefit plans. Click here to read the press release. UnitedHealthcare’s action is a big win for patients, though not (yet) a black swan event for pharmacies and pharmacy benefit managers (PBMs). As I explain below, it’s a small but significant move that will trigger new questions about drug prices, patients’ out-of-pocket costs, and channel economics. I’m sure that SpongeBob SquarePants, honorary mascot of the gross-to-net bubble, is … Continue reading UnitedHealthcare’s Point-of-Sale Rebate Announcement: What’s Next?

Benefit Design, Channel Management, Costs/Reimbursement, Industry Trends, PBMs, Pharmacy, Pharmacy Economics

NEW: The 2018 Economic Report on U.S. Pharmacies and Pharmacy Benefit Managers

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I am pleased to announce our new our 2018 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 the Table of Contents and a List of Exhibits) Click here to read the press release We’re offering special discounted pricing if you order before March 10, 2018! The 2018 edition has been thoroughly updated, revised, and expanded. This latest edition contains the most current financial and industry data along with information about the strategies and market positions of the largest companies. Many sections and chapters have … Continue reading NEW: The 2018 Economic Report on U.S. Pharmacies and Pharmacy Benefit Managers

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

Exclusive Express Scripts Data: Most People Have Very Low Out-Of-Pocket Prescription Costs

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In New Express Scripts Data: The Drug Spending Slowdown Is Real, I analyzed the latest drug trend report from pharmacy benefit manager (PBM) Express Scripts. To complement our earlier analysis, Express Scripts was kind enough to provide Drug Channels with an exclusive analysis showing the distribution of out-of-pocket costs for nearly 26 million people. Despite consumer surveys complaining about “high drug prices,” the reality is that most people don’t pay much for their prescriptions. In 2017, about 95% of people with commercial insurance had less than $40 per month in out-of-pocket prescription costs. About half of them paid nothing, because … Continue reading Exclusive Express Scripts Data: Most People Have Very Low Out-Of-Pocket Prescription Costs

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

New Express Scripts Data: The Drug Spending Slowdown Is Real

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Last week, Express Scripts released its 2017 Drug Trend Report. (Free download.)  Consider it an early Valentine’s Day present for pharma wonks like your friendly neighborhood blogger. The latest data confirm the slowdown in drug spending. For 2017, drug spending increased by only 1.5% for Express Scripts’ commercial plan sponsors. What’s more, drug spending declined for nearly half of commercial payers. Medicare, Medicaid, and exchange plans also saw very modest increases. Below, I dive deep into the data on cost and utilization growth. By now, there can be no debate that pharmacy benefit costs are growing more slowly than every … Continue reading New Express Scripts Data: The Drug Spending Slowdown Is Real

340B, Benefit Design, Hospitals, PBMs

Drug Channels News Roundup, January 2018: PBM Exclusions, Hospital Finances, 340B Updates, and Amazon

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Here at our worldwide headquarters in Philadelphia, Eagles super bowl fever has landed. Before trying to climb a Crisco-covered light pole, please enjoy this month’s playbook of articles, intercepted for you from the Drug Channels gridiron. An insightful analysis of the formulary exclusions at CVS Health and Express Scripts A surprising look at hospital systems’ finances A must-read overview of the 340B program Plus: some good news for Amazon CEO Jeff Bezos! (No, it’s  not about today’s breaking news.) P.S. Join the more than 5,000 people who run after me at @DrugChannels on Twitter. Every day, I tackle links to … Continue reading Drug Channels News Roundup, January 2018: PBM Exclusions, Hospital Finances, 340B Updates, and Amazon