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

The Law of Holes: Some Independents Skip 2019 Part D Preferred Pharmacy Networks

Last week, I highlighted the largest pharmacy chains that will participate in next year’s Medicare Part D prescription drug plans (PDP). Today, I examine independent pharmacies’ participation via the pharmacy services administrative organizations (PSAOs) that represent these pharmacies in negotiations with plans. This year’s results show a major divergence in strategies. Three of the four biggest PSAOs will participate in a comparable number of Part D networks, as the big chains do. AmerisourceBergen’s Elevate network, however, continues to go its own way and will skip preferred status in the major Part D networks. You will find its reasoning below. Are … Continue reading The Law of Holes: Some Independents Skip 2019 Part D Preferred Pharmacy Networks

Battle Royale: CVS and Kroger Gain, Walgreens Slips in 2019 Part D Preferred Pharmacy Networks

In Humana Triggers a Pullback for Preferred Pharmacy Networks in 2019 Medicare Part D , I highlighted how preferred pharmacy networks will dominate next year’s Medicare Part D prescription drug plans (PDP). Today, I examine chain pharmacies’ participation in 24 major 2019 Part D preferred networks. Some highlights: CVS, for the second year, has strengthened its position as a preferred pharmacy in many 2019 networks. Walmart and Kroger have maintained the strong positions that they have established over the past few years. Walgreens, however, has slipped as the other chains grow. Poor ol’ Rite Aid will again be a preferred … Continue reading Battle Royale: CVS and Kroger Gain, Walgreens Slips in 2019 Part D Preferred Pharmacy Networks

EXCLUSIVE: Humana Triggers a Small Pullback for Preferred Pharmacy Networks in 2019 Medicare Part D (Plus: Top Sponsors and CVS Health’s POS Plan)

The Centers for Medicare & Medicaid Services (CMS) has recently released the initial raw data on the 2019 Medicare Part D plans. Our exclusive analysis of these data reveals that preferred cost sharing pharmacy networks will be slightly less popular next year. For 2019, 92% of Medicare Part D regional prescription drug plans (PDP) will have a preferred network. This figure compares with 99% of plans in 2018. The decline will occur primarily because two Humana plans will switch from preferred to open networks for 2019. Below, I provide historical context on preferred networks’ growth and then discuss the top … Continue reading EXCLUSIVE: Humana Triggers a Small Pullback for Preferred Pharmacy Networks in 2019 Medicare Part D (Plus: Top Sponsors and CVS Health’s POS Plan)

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

The Trump Drug Pricing Plan: Short Term Reprieve, Long Term Disruption

Last Friday, the U.S. Department of Health & Human Services (HHS) released American Patients First, a report billed as “The Trump Administration Blueprint to Lower Drug Prices and Reduce Out-of-Pocket Costs.” This administration’s blueprint offers a thoughtful diagnosis of U.S. drug pricing along with the unintended consequences and warped incentives of our drug channel system. The report also proposes a very long list of more than 50 regulatory and legislative fixes. It therefore doesn’t translate to quick action or simple sound bites. Many people are discounting the plan as no big deal and therefore underestimating how radically the system could … Continue reading The Trump Drug Pricing Plan: Short Term Reprieve, Long Term Disruption

Five Takeaways About Cigna’s Strategy for Express Scripts

Almost three weeks ago, the health insurer Cigna announced that it would acquire the pharmacy benefit manager (PBM) Express Scripts. Click here to read my initial analysis of the deal. Wall Street remains unimpressed. Ever since the transaction was announced, Cigna’s stock price has dropped by 16%. Meanwhile, Express Scripts’ stock is trading more than 20% below Cigna’s offer price, suggesting that many believe the deal won’t be completed. To soothe rattled investors, Cigna last week filed an intriguing SEC Form 425. It contains 31 questions that you may or may not have been asking yourself about its acquisition of … Continue reading Five Takeaways About Cigna’s Strategy for Express Scripts

New Part D Data: CVS Wins Big in 2018’s Preferred Pharmacy Networks

Just-released data from the Centers for Medicare & Medicaid Services (CMS) confirms that preferred cost sharing networks will continue to dominate Medicare Part D. Our exclusive analysis finds that for 2018, 99.9% of seniors are enrolled in Prescription Drug Plans (PDPs) with preferred pharmacy networks. Below, we use the new enrollment data to analyze the major pharmacy chains’ position within the 22 major Part D plans that have preferred networks. As you will see, CVS looks poised in 2018 to recapture major market share from Walgreens and Walmart. Poor ol’ Rite Aid will once again lag far behind. As long … Continue reading New Part D Data: CVS Wins Big in 2018’s Preferred Pharmacy Networks

The CVS-Aetna Deal: Five Industry and Drug Channel Implications

Surprise? CVS Health and Aetna announced their long-rumored merger. Relevant links below. This transaction will create a healthcare organization with significant market share in the pharmacy, pharmacy benefit management (PBM), and health insurance businesses. There could be many potential opportunities for new consumer-oriented offerings. Finding the consumer value in this multi-headed $221 billion behemoth will be a major challenge. Read on for my initial thoughts on the deal and what it means for PBMs, manufacturers, and pharmacies. I also highlight some of the implementation challenges. Feel free to add your own thoughts on this mega-deal in the comments below. (Yes, … Continue reading The CVS-Aetna Deal: Five Industry and Drug Channel Implications

Will CMS Pop the Gross-to-Net Bubble in Medicare Part D With Point-of-Sale Rebates?

Last week, the Centers for Medicare & Medicaid Services (CMS) released its 713-page proposed policy changes and updates for the Medicare program. See the links below. Buried in this document is a radical concept: Part D plans would be required to recognize the value of manufacturer rebates and pharmacy payments in retail prescription prices. These amounts are two key components of Direct and Indirect Remuneration (DIR) that are currently paid to plans. CMS is asking for feedback for future rulemaking but did not propose any specific changes. Any program modifications would not occur until at least 2020 or later. However, … Continue reading Will CMS Pop the Gross-to-Net Bubble in Medicare Part D With Point-of-Sale Rebates?