340B Health Gets It Wrong … Again

This week, Drug Channels published our annual update on the growth of the 340B Drug Pricing Program. See 340B Program Purchases Reach $24.3 Billion—7%+ of the Pharma Market—As Hospitals’ Charity Care Flatlines. Right on cue, 340B Health, which lobbies for hospitals that participate in the 340B program, immediately issued its annual rebuttal of the Health Resources and Services Administration (HRSA) data that we used. 340B Health was particularly distressed that our analyses “focused on 340B sales instead of discounts.” Below, you will see that when the program is measured using 340B Health’s suggested approach, it accounted for 9% to 11% … Continue reading 340B Health Gets It Wrong … Again

EXCLUSIVE: 340B Program Purchases Reach $24.3 Billion—7%+ of the Pharma Market—As Hospitals’ Charity Care Flatlines

The 340B Drug Pricing Program continues to expand at double-digit rates. According to our government contacts, discounted 340B purchases hit a record $24.3 billion in 2018. That figure is an astonishing 26% higher than its 2017 counterpart. What’s more, we have found that since 2014, purchases under the program have grown at an average rate of 28% per year. By comparison, manufacturers’ net drug revenues have grown at an average rate of below 5% over the same period. Consequently, the 340B program has grown to account for at least 7% to 8% of the total U.S. drug market. Nearly all … Continue reading EXCLUSIVE: 340B Program Purchases Reach $24.3 Billion—7%+ of the Pharma Market—As Hospitals’ Charity Care Flatlines

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)

The Road to 2020: Understanding the Regulatory Timeline for Part D Rebate Reform

The Department of Health & Human Services (HHS) keeps signaling that it wants to move us toward a world without rebates. Right now, it is evaluating comments on its proposal to remove rebates from federal programs. HHS wants to implement this rule in time for the January 1 start of the 2020 Medicare Part D plan year. I would like, if I may, to take you on a journey through the 2019 regulatory timeline for both Part D and the proposed rule. As you will see, there is still a viable—but narrow—window for regulatory reform of rebates. Despite our assessment, … Continue reading The Road to 2020: Understanding the Regulatory Timeline for Part D Rebate Reform

The Gross-to-Net Bubble Reached a Record $166 Billion in 2018

The gross-to-net bubble—the ever-growing pile of money that sits between a manufacturer’s list price for a drug and the net price after rebates and other reductions—reached another high last year. Drug Channels Institute developed the term gross-to-net bubble to describe the speed and size of growth in the total value of manufacturers’ gross-to-net reductions. We estimate that in 2018, the total value of gross-to-net reductions for brand-name drugs was $166 billion. As you will see below, that figure doubled over the preceding six years. Below, I also highlight the various elements that fill the bubble. About two-thirds of total gross-to-net … Continue reading The Gross-to-Net Bubble Reached a Record $166 Billion in 2018

Drug Channels News Roundup, March 2019: The Insulin Gross-to-Net Bubble, HHS Blasts Rebates, a New 340B Report, and Theranos

Spring has finally reached our worldwide headquarters here in lovely downtown Philadelphia. (See photo at right.) Before your allergies kick in, please inhale this month’s selection of noteworthy news stories: Eli Lilly discloses the bonkers gross-to-net economics for Humalog insulin John O’Brien of HHS blasts the current drug pricing system The Community Access National Network’s 340B Commission releases an excellent new report—and you can read my testimony, too! Plus, a compelling new HBO documentary delves further into the sordid tale of Elizabeth Holmes and Theranos. P.S. Join the more than 7,200 people who follow my comments and links at @DrugChannels … Continue reading Drug Channels News Roundup, March 2019: The Insulin Gross-to-Net Bubble, HHS Blasts Rebates, a New 340B Report, and Theranos

Latest CMS Forecast: Hospitals and Physicians Will Grab Most of the $1.3 Trillion Increase in U.S. Healthcare Spending

The econowonks at the Centers for Medicare & Medicaid Services (CMS) have recently published new projections for U.S. National Health Expenditures (NHE). You’ll find links and my data analysis below. As you will see, total U.S. spending on healthcare is projected to grow, from $3.5 trillion in 2017 to $4.8 trillion in 2023. Spending on hospitals and professional services is expected to grow by a combined $750 billion—about 59% of CMS’s projected $1.3 trillion increase in U.S. healthcare spending. CMS also projects that spending on outpatient prescription drugs will account for only 9% of the total increase in U.S. healthcare … Continue reading Latest CMS Forecast: Hospitals and Physicians Will Grab Most of the $1.3 Trillion Increase in U.S. Healthcare Spending

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

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

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 note: I have been reading the WSJ daily since I was 18 years old. It’s a genuine thrill to see my byline on an op-ed in this … Continue reading My Wall Street Journal Op-Ed: Don’t Blame Drug Prices on ‘Big Pharma’

Drug Prices Are NOT Skyrocketing—They’re Barely Growing at All

The IQVIA Institute for Human Data Science today released a new report that reveals important realities about U.S. drug pricing trends. Too many politicians and journalists remain committed to the false narrative of “skyrocketing” and “soaring” drug prices. By contrast, IQVIA data reveal that list prices for brand-name drugs grew by less than 6% in 2018. What’s more, net prices (after rebates and discounts) increased by only 1.5%. The 2018 figures mark the fourth consecutive year that net drug prices have grown by low-single-digit amounts. I recognize that relying on “facts” and “data” has become unfashionable. But I simply don’t … Continue reading Drug Prices Are NOT Skyrocketing—They’re Barely Growing at All