JAMA: Withdraw This Flawed and Inaccurate Article About the 340B Program and Drug Prices

The Journal of the American Medical Association (JAMA) recently published Estimated Changes in Manufacturer and Health Care Organization Revenue Following List Price Reductions for Hepatitis C Treatments by Sean Dickson and Ian Reynolds. The paper purports to show that manufacturers’ net revenues increased following a decrease in three drugs’ list prices. However, the paper contains a significant computational error: The authors do not properly calculate the 340B ceiling price. Consequently, the authors’ calculations are inaccurate and their conclusions are erroneous. As we might expect, a manufacturer’s revenue per-patient doesn’t increase when list prices decline and net prices remain constant. Below, … Continue reading JAMA: Withdraw This Flawed and Inaccurate Article About the 340B Program and Drug Prices

Six Reasons Why the Rebate Rule Failed—And What’s Next

Yesterday, we all awoke to the unexpected news that the Department of Health & Human Services (HHS) withdrew its plans to reform rebates in federal programs. The world without rebates has been delayed—perhaps indefinitely. Below, I highlight six key policy and political factors behind this decision. I also discuss winners and losers among drug channel participants. The underlying problems of the the gross-to-net bubble remain. As H.L. Mencken observed: “There is always a well-known solution to every human problem—neat, plausible, and wrong.” Get ready for a slew of drug pricing policy proposals that perfectly fit these criteria. Read more » … Continue reading Six Reasons Why the Rebate Rule Failed—And What’s Next

Drug Channels News Roundup, June 2019: PBM Spread Pricing, Rebate Walls, Reforming Part D, and Not-So-Smart Bulbs

Happy 243rd birthday, America! Before you launch your July 4 festivities, Drug Channels offers some fireworks of its own: Surprising PBM spread pricing profits in Massachusetts plans Eli Lilly explains rebate walls for specialty drugs MedPAC suggests Part D changes—and endorses a well-known Drug Channels term! Plus, the funniest video that I have ever seen. P.S. @DrugChannels on Twitter now has more than 7,700 followers. See why by following my daily musings and cool links. Read more » Copyright © 2006-2019 Pembroke Consulting, Inc. d/b/a Drug Channels Institute. Drug Channels® is a registered trademark of Pembroke Consulting, Inc. This Feed … Continue reading Drug Channels News Roundup, June 2019: PBM Spread Pricing, Rebate Walls, Reforming Part D, and Not-So-Smart Bulbs

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

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