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, … Continue reading JAMA: Withdraw This Flawed and Inaccurate Article About the 340B Program and Drug Prices

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. Read more » … Continue reading Six Reasons Why the Rebate Rule Failed—And What’s Next

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. 😉 The gross-to-net bubble—the ever-growing pile of money that sits between a manufacturer’s list price for a drug and … Continue reading The Gross-to-Net Bubble Reached a Record $166 Billion in 2018 (rerun)

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

Drug Channels News Roundup, June 2019: PBM Spread Pricing, Rebate Walls, Reforming Part D, and Not-So-Smart Bulbs

Happy 243rd birthday, America! Before you launch your July 4 festivities, Drug Channels offers some fireworks of its own: Surprising PBM spread pricing profits in Massachusetts plans Eli Lilly explains rebate walls for specialty drugs MedPAC suggests Part D changes—and endorses a well-known Drug Channels term! Plus, the funniest video that I have ever seen. P.S. @DrugChannels on Twitter now has more than 7,700 followers. See why by following my daily musings and cool links. Read more » Copyright © 2006-2019 Pembroke Consulting, Inc. d/b/a Drug Channels Institute. Drug Channels® is a registered trademark of Pembroke Consulting, Inc. This Feed … Continue reading Drug Channels News Roundup, June 2019: PBM Spread Pricing, Rebate Walls, Reforming Part D, and Not-So-Smart Bulbs

Profits in the 2019 Fortune 500: Manufacturers vs. Managed Care vs. Pharmacies, PBMs, and Wholesalers

Time to dive into our 12th (!) annual review of the Fortune 500 list. Every year, this is one of my most popular posts, because it helps us follow the dollar and understand how drug channel intermediaries make money. Fortune’s 2019 list contains only six drug channel companies: AmerisourceBergen, Cardinal Health, CVS Health, McKesson, Rite Aid, and Walgreens Boots Alliance. Consolidation and vertical integration have transformed the channel—and the Fortune rankings. Below you will see our list of the companies that disappeared from the roster. We therefore have added to our analysis the four managed care and insurance companies on … Continue reading Profits in the 2019 Fortune 500: Manufacturers vs. Managed Care vs. Pharmacies, PBMs, and Wholesalers

Which PBM Best Managed Drug Spending in 2018: CVS Health, Express Scripts, MedImpact, or Prime Therapeutics?

It’s time for our annual Drug Channels’ examination of drug spending reports. For 2018, we again aim our magnifying glass at the annual trend reports from four large pharmacy benefit managers (PBMs): CVS Health, Express Scripts, MedImpact, and Prime Therapeutics. (See their report links below.) The other large PBMs—Humana and OptumRx (UnitedHealth)—provide no public transparency into their performance. Using these data, which account for most of the commercial market, we detect the following key trends for 2018: Once again, we find that drug spending is not skyrocketing—contrary to what you often hear from journalists and politicians. Spending grew by about … Continue reading Which PBM Best Managed Drug Spending in 2018: CVS Health, Express Scripts, MedImpact, or Prime Therapeutics?

Express Scripts Launches a New Formulary for a World Without Rebates. Will Plan Sponsors and Drug Makers Play Along? (rerun)

This week, I’m rerunning some popular posts while I attend Asembia’s 2019 Specialty Pharmacy Summit. This is an especially timely rerun. Believe it or not, Express Scripts’ 2019 formulary prefers Eli Lilly’s high-list/high-rebate Humalog insulin over the authorized generic version that is being sold at a 50% lower list price. The authorized generic will be preferred only on Express Scripts’ Flex Formulary, which has very low adoption.  Bottom line: Many plans still crave rebate dollars. Sorry, patients with deductibles and coinsurance. The gross-to-net bubble lives on!  Click here to see the original post and comments from November 2018. Express Scripts has … Continue reading Express Scripts Launches a New Formulary for a World Without Rebates. Will Plan Sponsors and Drug Makers Play Along? (rerun)

My Wall Street Journal Op-Ed: Don’t Blame Drug Prices on ‘Big Pharma’ (rerun)

This week, I’m rerunning some popular posts while I attend Asembia’s 2019 Specialty Pharmacy Summit. Click here to see the original post and comments from February 2019. Yesterday, The Wall Street Journal published my op-ed: Don’t Blame Drug Prices on ‘Big Pharma’. The article text is pasted below for those who don’t subscribe. I wrote this piece for a general business audience, though my arguments about rebates and patient out-of-pocket costs will be familiar to regular readers of Drug Channels. Alas, I had to omit such insider terms as gross-to-net bubble, direct and indirect remuneration, and SpongeBob SquarePants. A personal … Continue reading My Wall Street Journal Op-Ed: Don’t Blame Drug Prices on ‘Big Pharma’ (rerun)

Drug Channels News Roundup, April 2019: Cigna’s Insulin Program, Amazon’s PillPack Moves, Magellan’s Biosimilar Success, Prime’s Formulary Exclusions, and a World Without Rebates

April is over, and now, come what May, it’s time for our monthly roundup of news stories highlighting key trends for U.S. drug channels. In this issue: My $0.02 on the Cigna/Express Scripts’ $25 insulin program Amazon starts marketing PillPack to Prime customers Surprise! Magellan drives major biosimilar adoption. Prime Therapeutics shows the power of formulary exclusion Plus, read media coverage of our recent webinar: Preparing for a World Without Rebates. P.S. Join the more than 7,400 people who follow my daily updates and links to neat stuff at @DrugChannels on Twitter. Read more » Copyright © 2006-2019 Pembroke Consulting, … Continue reading Drug Channels News Roundup, April 2019: Cigna’s Insulin Program, Amazon’s PillPack Moves, Magellan’s Biosimilar Success, Prime’s Formulary Exclusions, and a World Without Rebates