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

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

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

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

Drug Channels News Roundup, October 2018: Amgen, Walgreens, Rite Aid’s PBM, Drug Price Ads, and Buy-and-Bill Murray

Boo! Time for my Halloween bag of Drug Channels news stories. This issue’s tricks and treats: Shocking! The gross-to-net bubble for Amgen’s PCSK9 product magically vanishes—and my $0.02 appears Creepy! Stefano Pessina of Walgreens Boots Alliance shares startling thoughts about Amazon, ABC, and more Scary! Shareholders vote today on whether Rite Aid should amputate its PBM Spooky! The Wall Street Journal conjures up a frightfully funny editorial about the drug channel Plus, the Centers for Medicare & Medicaid Services summons Buy-and-Bill Murray for its latest foray into Part B reform. P.S. Join the zombie horde who shamble after me at … Continue reading Drug Channels News Roundup, October 2018: Amgen, Walgreens, Rite Aid’s PBM, Drug Price Ads, and Buy-and-Bill Murray

Drug Channels News Roundup, September 2018: Gilead’s Price Cuts, Out-of-Pocket Costs, Hospital-Physician Vertical Integration, and WXPN + Me

Autumn is here, and we’ve squirrelled away some great acorns that have fallen from the mighty Drug Channels oak trees: Gilead’s new pricing starts to pop the gross-to-net bubble New fact-based insights on patient out-of-pocket costs and prescription abandonment Cool new stats on hospital-physician vertical integration by specialty The U.S. healthcare crisis will probably never end (Sorry.) Plus, your friendly neighborhood blogger joins the board of 88.5 WXPN, the country’s leading non-commercial Triple A (adult, album, alternative) radio station. P.S. Follow my daily stream of links to neat stuff at @DrugChannels on Twitter.Recent tweets have highlighted rebates, step therapy, PSAOs, … Continue reading Drug Channels News Roundup, September 2018: Gilead’s Price Cuts, Out-of-Pocket Costs, Hospital-Physician Vertical Integration, and WXPN + Me

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

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

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

Drug Channels News Roundup, August 2018: PBM Spread Profits, Part D Rebates, 340B Questions, Amazon and Dentists, and PBS on PBMs

We’re wrapping up one of newsiest summers in recent memory. As you send the kids back to school, savor this curated collection of curiosities, combed from the now-empty Drug Channels beach: In this issue: An Ohio audit provides unprecedented data about pharmacy benefit manager (PBM) profits New revelations about rebates in Medicare Part D. (Bonus: AHIP discovers that rebates actually exist!) Congress has tough questions for 340B contract pharmacies How Amazon Business is drilling into the dental supplies market Plus, an unexpectedly straightforward PBM news story that is clear enough to watch with your kids. P.S. Join the more than … Continue reading Drug Channels News Roundup, August 2018: PBM Spread Profits, Part D Rebates, 340B Questions, Amazon and Dentists, and PBS on PBMs

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

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

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

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?

Still Possible: Hospitals Overcharge Health Plans for Specialty Drugs

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