A World Without Rebates: Predictions for How the Channel Will Evolve and Why Drug Prices Will Go Down

Two years ago on Drug Channels, I wrote about a shift from rebates to discounts as a black swan event—a massively important yet unexpected break from current practice. Given recent developments, I believe that we are moving ever closer to a world without rebates. Yet there are many unanswered questions were such a radical shift to occur. As I see it, a world without rebates would force manufacturers to use net price as a competitive weapon. If PBMs and payers behave logically, then drug prices would drop as manufacturers are forced to compete more aggressively for prescriptions. These conclusions are … Continue reading A World Without Rebates: Predictions for How the Channel Will Evolve and Why Drug Prices Will Go Down

Employers Are Absorbing Even More Manufacturer Rebates from Their PBMs

The likelihood of a radical restructuring of the U.S. drug channel has never been greater. A serious effort exists to remove or decrease the role of rebates. Today, we shed light on one crucial aspect of the current rebate system: how employer-sponsored health plans access the billions of dollars in manufacturer rebates that are negotiated by their pharmacy benefit managers (PBMs). For this analysis, we rely on the Pharmacy Benefit Management Institute’s (PBMI) excellent new reports. As you will see, employers are receiving an increasing share of the rebate money collected by pharmacy benefit managers. However, employers’ rebate agreements with … Continue reading Employers Are Absorbing Even More Manufacturer Rebates from Their PBMs

NEW: The 2019 Economic Report on U.S. Pharmacies and Pharmacy Benefit Managers

I am pleased to announce our new 2019 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) New Drug Channels Institute Study Analyzes U.S. Drug Pricing and Rebates, Predicts Further Shakeout and Consolidation (press release) We’re offering special discounted pricing if you order before March 22, 2019! The 2019 Economic Report on U.S. Pharmacies and Pharmacy Benefit Managers is the only resource of its kind available anywhere. With 180 proprietary charts, exhibits, and data tables, the … Continue reading NEW: The 2019 Economic Report on U.S. Pharmacies and Pharmacy Benefit Managers

The Top 15 U.S. Pharmacies of 2018: M&A Reshapes the Market

Next week, Drug Channels Institute will release our 2019 Economic Report on U.S. Pharmacies and Pharmacy Benefit Managers. It’s the tenth edition of our popular and comprehensive examination of the entire drug pricing, reimbursement, and dispensing system. The exhibit below—one of 180 in our new report—provides a first look at the 15 largest pharmacies, ranked by total U.S. prescription dispensing revenues for calendar year 2018. As you will see, vertical and horizontal mergers and acquisitions are reshaping the pharmacy and PBM industries—and enabling the big to get even bigger. I highlight some of the major transactions that affected our ranking. … Continue reading The Top 15 U.S. Pharmacies of 2018: M&A Reshapes the Market

Preorder Now: Our 2019 Economic Report on U.S. Pharmacies and Pharmacy Benefit Managers

On March 5, 2019, Drug Channels Institute will release The 2019 Economic Report on U.S. Pharmacies and Pharmacy Benefit Managers. This new tenth edition is the most comprehensive, fact-based tool for understanding the entire U.S. drug pricing and distribution system. The 2019 edition has been significantly expanded and restructured since last year’s edition. We have added new industry data sources, deepened our coverage of many topics, and added more trending information. There are also 2 new chapters and many new exhibits. CLICK HERE to download a free pre-publication draft overview (including the Table of Contents and a List of Exhibits). … Continue reading Preorder Now: Our 2019 Economic Report on U.S. Pharmacies and Pharmacy Benefit Managers

A System Without Rebates: The Drug Channels Negotiated Discounts Model (rerun)

This week, I’m rerunning some popular posts before the holidays. Click here to see the original post and comments from August 2018. This has been the most impactful article that I have ever published on Drug Channels. Review it and get ready for 2019. P.S. You can also find this material at www.WorldWithoutRebates.com. (Yes, we bought that domain!) Are you ready for a world without rebates? In June, Alex Azar, Secretary of the U.S. Department of Health & Human Services (HHS), summarized his long-range vision for a new drug channel system: “[W]e may need to move toward a system without rebates, … Continue reading A System Without Rebates: The Drug Channels Negotiated Discounts Model (rerun)

Building a New Drug Wholesaler Compensation Model: What Happens as Brand Inflation Slows? (rerun)

This week, I’m rerunning some popular posts before the holidays. Click here to see the original post and comments from July 2018. The challenges facing wholesalers have intensified since this article was originally published, in July. Brand-name drug inflation will likely reach historical lows in 2019, and the prospects for a gross-to-net bubble reset are greater than ever. Have executives at the Big Three companies fully grasped the changes coming to the drug wholesaling business model? For more on the industry, see our 2018–19 Economic Report on Pharmaceutical Wholesalers and Specialty Distributors. Today, drug wholesalers make money from distribution in … Continue reading Building a New Drug Wholesaler Compensation Model: What Happens as Brand Inflation Slows? (rerun)

The Cigna-Express Scripts Deal’s Intriguing Connections With—And Implications For—AmerisourceBergen and Walgreens

Almost there! Last week, the U.S. Department of Justice (DOJ) Antitrust Division closed its investigation of Cigna’s proposed acquisition of Express Scripts. Click here to read the DOJ’s closing statement. As with everything in the U.S. drug channel, there’s more to this transaction than meets the eye. Below, I explain how the transaction will benefit AmerisourceBergen (ABC), which supplies the mail and specialty pharmacies of Express Scripts. But as you’ll see, Express Scripts has been relying less on ABC as a source of supply for its mail and specialty pharmacies. Meanwhile, the new organization transaction will have few degrees of … Continue reading The Cigna-Express Scripts Deal’s Intriguing Connections With—And Implications For—AmerisourceBergen and Walgreens

Updated Part B Data: Hospitals Are Displacing Physician Offices Even Faster Than We Thought

The Medicare Payment Advisory Commission (MedPAC), the independent agency that advises Congress on the Medicare program, recently released its latest annual report: June 2018 Data Book: Health Care Spending and the Medicare Program. It’s a charming, 216-page data romp through all aspects of Medicare. Chapter 10 focuses on prescription drugs. This year’s report provides new and revised details about the locations where Part B buy-and-bill spending occurs. As you will see below, physician offices account for a smaller share of spending than what we previously reported. Hospital outpatient departments account for a higher share. What’s more, the new MedPAC data … Continue reading Updated Part B Data: Hospitals Are Displacing Physician Offices Even Faster Than We Thought

The State of Specialty Pharmacy 2018: Reflections from #Asembia18 (rerun)

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. Last week, Paula and I had the pleasure of attending Asembia’s 2018 Specialty Pharmacy Summit. The Specialty Pharmacy Summit remains the most important forum in the specialty marketplace. This year, a record 6,500 people learned, networked, and connected in Las Vegas. It was another year of record attendance. (Here’s the official press release.) Drug Channels again salutes Larry and Robert Irene for sustaining and growing an annual event that unites the entire industry. Today marks the … Continue reading The State of Specialty Pharmacy 2018: Reflections from #Asembia18 (rerun)