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

Drug Channels News Roundup, January 2019: Part D Plan Profits, Hospitals vs. Drugs, and BS in Healthcare

L.A. vs. New England! Youth vs. experience! Kale vs. chowdah! Yes, it’s time for a weekend of blow-out commercials, occasionally interrupted by a football game. Before you start training to gorge at your Super Bowl-party, tackle this month’s selection of notable news stories, intercepted for you from the Drug Channels gridiron. Touchdown: The little-known ways that plans profit from Medicare Part D Trick play: Hospital care vs. prescription drugs: My best tweet ever! Offensive lines: A must-read guide to BS in healthcare Plus, we here at Drug Channels have just released our 2019 media kit. Check it out and let … Continue reading Drug Channels News Roundup, January 2019: Part D Plan Profits, Hospitals vs. Drugs, and BS in Healthcare

New Part D Enrollment Data: CVS Extends Its Lead in 2019 Preferred Pharmacy Networks

The Centers for Medicare & Medicaid Services (CMS) has just released its first 2019 data on enrollment in Medicare Part D prescription drug plans (PDPs). Our exclusive analysis of these numbers finds that for 2019, 88.4% of seniors are enrolled in PDPs with preferred pharmacy networks. That’s a drop from last year’s figure of 99.9%. 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, in 2019 CVS again looks poised to capture market share from Walgreens and Walmart, both of … Continue reading New Part D Enrollment Data: CVS Extends Its Lead in 2019 Preferred Pharmacy Networks

CMS Considers Point-of-Sale Pharmacy DIR: Another Prelude to a World Without Rebates?

Last week, the Centers for Medicare & Medicaid Services (CMS) released a new rule for Medicare Parts B and D. It proposes changes to protected classes, e-prescribing, and other issues. Links and background below. Notably for the Drug Channels audience, CMS also announced that it is considering—but not yet formally proposing—changes to how pharmacy price concessions are handled within Medicare Part D. These payments currently function like pharmacy rebates to Part D plans. They are therefore considered to be direct and indirect remuneration (DIR) and often called “DIR fees.” Thanks to new CMS disclosures, we can now see why pharmacy … Continue reading CMS Considers Point-of-Sale Pharmacy DIR: Another Prelude to a World Without Rebates?

Drug Channels News Roundup, November 2018: Amazon/PillPack Update, Fake News from BCBSA, Drug List Prices in Ads, Part D Plans, and Dan Best

Hope you enjoyed the Thanksgiving holiday! I remain ever-thankful for your support and readership. Now that you’ve stretched your stomach, stretch your mind with some food for thought. In this issue: Amazon starts to expand PillPack’s dispensing capabilities Blue Cross Blue Shield misrepresents drug spending data An excellent analysis of the CMS proposal for advertising drug list prices The patient’s perspective on choosing a Medicare Part D plan Plus, please consider making a donation to the Dan Best Memorial Fund. Details below. P.S. For daily updates on stuff that I am reading, join the more than 6,500 people who follow … Continue reading Drug Channels News Roundup, November 2018: Amazon/PillPack Update, Fake News from BCBSA, Drug List Prices in Ads, Part D Plans, and Dan Best

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