PBM Pricing Overhaul: Express Scripts Prepares for a World Without Rebates—But Employers May Not Change

This week, Express Scripts announced an innovative pharmacy benefit contracting model for members of the National Drug Purchasing Coalition (NDPC), a group of 18 large employers. Click here to read the fully-titled press release. You should pay close attention to this b.i.g. news. It is structured so that Express Scripts will not profit from the flow of funds from a brand-name manufacturer to a plan sponsor. What’s more, the PBM’s compensation will be fully delinked from drug list prices. Instead, Express Scripts will earn only fixed management fees plus additional at-risk compensation tied to clinical outcomes. I spoke to Express … Continue reading PBM Pricing Overhaul: Express Scripts Prepares for a World Without Rebates—But Employers May Not Change

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)

Does Rite Aid Have the Grit to Succeed With Its EnvisionRx PBM Business?

Let’s check in with poor ol’ Rite Aid, the little drugstore that couldn’t. Over the past year and half, Rite Aid has sold off 2,000 stores to Walgreens Boots Alliance, scuttled a proposed merger with Albertsons, and watched its stock price drop from nearly $9 to about $1. Yikes. Rite Aid’s EnvisionRx business, which includes two small PBMs and some related pharmacy services businesses, still has some value. But as you will see below, there appear to be few synergies between Rite Aid’s pharmacy business and the Envision PBMs. Investors are grumbling that Rite Aid should sell EnvisionRx before things … Continue reading Does Rite Aid Have the Grit to Succeed With Its EnvisionRx PBM Business?

The Cigna-Express Scripts Deal’s Intriguing Connections With—And Implications For—AmerisourceBergen and Walgreens

Almost there! Last week, the U.S. Department of Justice (DOJ) Antitrust Division closed its investigation of Cigna’s proposed acquisition of Express Scripts. Click here to read the DOJ’s closing statement. As with everything in the U.S. drug channel, there’s more to this transaction than meets the eye. Below, I explain how the transaction will benefit AmerisourceBergen (ABC), which supplies the mail and specialty pharmacies of Express Scripts. But as you’ll see, Express Scripts has been relying less on ABC as a source of supply for its mail and specialty pharmacies. Meanwhile, the new organization transaction will have few degrees of … Continue reading The Cigna-Express Scripts Deal’s Intriguing Connections With—And Implications For—AmerisourceBergen and Walgreens

Copay Accumulator Update: Widespread Adoption As Manufacturers and Maximizers Limit Patient Impact

In January, I alerted you to an important new benefit design trend in Copay Accumulators: Costly Consequences of a New Cost-Shifting Pharmacy Benefit. It is by far the most widely read article ever published on Drug Channels. New data from Zitter Health insights (ZHI) suggest that these programs are widely used. Nearly one-third of commercially-insured lives are enrolled in plans that have implemented copay accumulator adjustment or closely-related copay maximizers. (We explain the benefit design math behind maximizers below.) ZHI also found that a surprising number of plans are already set up to use these programs, but have not done so … Continue reading Copay Accumulator Update: Widespread Adoption As Manufacturers and Maximizers Limit Patient Impact

The State of Specialty Pharmacy 2018: Reflections from #Asembia18 (rerun)

This week, I’m rerunning some popular posts before the Labor Day weekend. Click here to see the original post and comments from May 2018. Last week, Paula and I had the pleasure of attending Asembia’s 2018 Specialty Pharmacy Summit. The Specialty Pharmacy Summit remains the most important forum in the specialty marketplace. This year, a record 6,500 people learned, networked, and connected in Las Vegas. It was another year of record attendance. (Here’s the official press release.) Drug Channels again salutes Larry and Robert Irene for sustaining and growing an annual event that unites the entire industry. Today marks the … Continue reading The State of Specialty Pharmacy 2018: Reflections from #Asembia18 (rerun)

Who Best Managed the Drug Spending Slowdown in 2017: CVS Health, Express Scripts, MedImpact, or Prime Therapeutics? (rerun)

This week, I’m rerunning some popular posts before the Labor Day weekend. Click here to see the original post and comments from May 2018. It’s time for Drug Channels’ annual analysis of drug spending. For 2017, we again turn to the annual trend reports from four large pharmacy benefit managers (PBMs)—CVS Health, Express Scripts, MedImpact, and Prime Therapeutics. (See their report links below.) Below, I compare who’s better and who’s best among the PBMs and share additional observations about the 2017 trends. We offer four key conclusions: Drug spending grew by only 1.5% in 2017, continuing a multiyear decline in … Continue reading Who Best Managed the Drug Spending Slowdown in 2017: CVS Health, Express Scripts, MedImpact, or Prime Therapeutics? (rerun)

Profits in the 2018 Fortune 500: Manufacturers vs. Wholesalers, PBMs, and Pharmacies (rerun)

This week, I’m rerunning some popular posts before the Labor Day weekend. Click here to see the original post and comments from June 2018. Time for my annual review of the Fortune 500 list. Every year, this is one of my most popular posts, because it helps us follow the dollar and understand how drug channel intermediaries make money. Our analysis also provides crucial background for understanding the Trump administration’s drug pricing blueprint. Fortune’s 2018 list contains the same seven drug channel companies that the 2017 list did: AmerisourceBergen, Cardinal Health, CVS Health, Express Scripts, McKesson, Rite Aid, and Walgreens … Continue reading Profits in the 2018 Fortune 500: Manufacturers vs. Wholesalers, PBMs, and Pharmacies (rerun)

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