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

Meet The Power Buyers Driving Generic Drug Deflation (rerun)

This week, I’m rerunning some popular posts before the holiday week. Click here to see the original post and comments from February 2018. Wholesalers and retailers have deepened their relationships via generic purchasing consortia—and generic drug makers are feeling the pain. Example: Novartis’ Sandoz business unit reported that its fourth-quarter 2017 sales dropped by 17% “due to increased industry-wide pricing pressure and continued customer consolidation.” (source) Below, we examine the four generic drug mega-buyers behind this pressure: Red Oak, Walgreens Boots Alliance, McKesson and ClarusOne, and Express Script’s EconDisc. We estimate that in 2017, these four organizations accounted for an … Continue reading Meet The Power Buyers Driving Generic Drug Deflation (rerun)

The Top 15 U.S. Pharmacies of 2017: Market Shares and Key Developments For The Biggest Companies

Next week, Drug Channels Institute will release our 2018 Economic Report on U.S. Pharmacies and Pharmacy Benefit Managers. It’s the ninth edition of our popular examination of the U.S. pharmacy distribution and reimbursement system. The exhibit below—one of 160 in our new report—provides a first look at the 15 largest pharmacies, ranked by total U.S. prescription dispensing revenues for calendar year 2017. I also highlight crucial market changes that affected our ranking. As you will see, the big got bigger in 2017. For a sneak peek at the complete report, download the free overview. If you would like to preorder … Continue reading The Top 15 U.S. Pharmacies of 2017: Market Shares and Key Developments For The Biggest Companies

Meet The Power Buyers Driving Generic Drug Deflation

Wholesalers and retailers have deepened their relationships via generic purchasing consortia—and generic drug makers are feeling the pain. Example: Novartis’ Sandoz business unit reported that its fourth-quarter 2017 sales dropped by 17% “due to increased industry-wide pricing pressure and continued customer consolidation.” (source) Below, we examine the four generic drug mega-buyers behind this pressure: Red Oak, Walgreens Boots Alliance, McKesson and ClarusOne, and Express Script’s EconDisc. We estimate that in 2017, these four organizations accounted for an astounding 90% of total U.S. generic drug purchases from manufacturers. Read on for our market share estimates, business profiles, and the outlook for … Continue reading Meet The Power Buyers Driving Generic Drug Deflation

2016 Drug Spending: The Shift from Employers to Government Payers—And Troubling Trends For Patients

In CMS Confirms It: Drug Spending Slows, Hospital and Physician Spending Grows, I showed that growth in drug spending was significantly below the growth rate of overall national healthcare spending. Today, I delve into trends in third-party and patient payment for prescription drugs. In 2016, all payers experienced a slowdown in spending. Employers’ drug spending growth was nearly flat, while consumers (on average) paid less out of pocket. And for the third year in a row, spending by government payers exceeded spending by employers. The NHE are net of rebates, so gross-to-net bubblenomics play a part in these figures. I … Continue reading 2016 Drug Spending: The Shift from Employers to Government Payers—And Troubling Trends For Patients

CMS Confirms It: Drug Spending Slows, Hospital and Physician Spending Grows

Last week, the econowonks at the Centers for Medicare & Medicaid Services (CMS) released the 2016 National Health Expenditure (NHE) data. Links below. It’s politically fashionable to blame healthcare spending growth on pharmaceuticals, but it’s also inaccurate. For 2016, growth in drug spending was a mere 1.3%—significantly below the growth rate of overall national healthcare spending. Another fun fact: drug spending has grown more slowly than NHE in seven of the past ten years. Yes, really. Our analysis also shows that spending on hospital care and healthcare professionals continues to expand much more quickly than drug spending. For 2016, those … Continue reading CMS Confirms It: Drug Spending Slows, Hospital and Physician Spending Grows

Five Industry Trends for U.S. Drug Wholesalers in 2018

Modern Distribution Management recently published my article 2017 MDM Market Leaders | Top Pharmaceuticals Distributors. It is an excerpt from our 2017–18 Economic Report on Pharmaceutical Wholesalers and Specialty Distributors. Below, I republish the section of the article highlighting five significant industry trends affecting the U.S. drug wholesaling industry. I think Drug Channels readers will enjoy this summary as we look toward an eventful 2018. Click here to download a free overview of the full report. Many of the trends highlighted below have been headwinds for the wholesalers. They may help you understand why H.D. Smith sold its drug wholesaling … Continue reading Five Industry Trends for U.S. Drug Wholesalers in 2018

Shopping for Prescriptions: How Deductibles Will Reshape the Pharmacy Industry

In a previous analysis (Employer Pharmacy Benefits in 2017: More Cost-Shifting to Patients As Tiers and Coinsurance Expand), I examined the structure of employers’ 2017 pharmacy benefit plans. Today, I examine the growing role of deductibles. The growth of separate prescription deductibles has become a significant change in patient cost sharing for prescription drugs. For 2017, about 8 out of 10 U.S. workers must meet a general annual deductible before their plan pays for most healthcare services. Prescriptions are typically excluded from the deductible. However, this year’s survey shows that one-third of workers in high-deductible plans now faces a separate … Continue reading Shopping for Prescriptions: How Deductibles Will Reshape the Pharmacy Industry

Drug Channels News Roundup, September 2017: A Walgreens-Rite Aid Deal Postmortem, Impax Likes Amazon, Health Insurance History, and Gross-to-Net Bubble Emojis

Autumn is here! Curl up with your favorite pumpkin spiced blog and savor these stories plucked from the Drug Channels patch: Stefano Pessina of Walgreens Boots Alliance reflects on the successful Rite Aid deal A generic drug maker speculates on using Amazon as a direct-to-patient channel A great history lesson on why the U.S. has employer-sponsored insurance Plus, the Pharmaceutical Research and Manufacturers of America (PhRMA) attacks pharmacy benefit managers (PBMs)…with emojis! P.S. For my daily cornucopia of interesting news stories, follow @DrugChannels on Twitter. Read more » Copyright © 2006-2017 Pembroke Consulting, Inc. and Copyright © 2006-2017 Drug Channels. … Continue reading Drug Channels News Roundup, September 2017: A Walgreens-Rite Aid Deal Postmortem, Impax Likes Amazon, Health Insurance History, and Gross-to-Net Bubble Emojis

Drug Wholesalers Struggle: Slower Revenue Growth and Lower Gross Margins for 2017

Next week, Drug Channels Institute will release our updated 2017–18 Economic Report on Pharmaceutical Wholesalers and Specialty Distributors. Below, we highlight the report’s revenue and gross margin trends for the U.S. drug distribution businesses of the Big Three wholesalers—AmerisourceBergen, Cardinal Health, and McKesson. As you will see, we project that revenue growth in 2017 will be the slowest since 2013. We estimate that core U.S. drug distribution gross margins peaked in 2015 and have declined ever since. For a sneak peek at the complete report and its content, download the free overview. Enjoy! Read more » Copyright © 2006-2017 Pembroke … Continue reading Drug Wholesalers Struggle: Slower Revenue Growth and Lower Gross Margins for 2017