Preorder Now: Our 2019 Economic Report on U.S. Pharmacies and Pharmacy Benefit Managers

On March 5, 2019, Drug Channels Institute will release The 2019 Economic Report on U.S. Pharmacies and Pharmacy Benefit Managers. This new tenth edition is the most comprehensive, fact-based tool for understanding the entire U.S. drug pricing and distribution system. The 2019 edition has been significantly expanded and restructured since last year’s edition. We have added new industry data sources, deepened our coverage of many topics, and added more trending information. There are also 2 new chapters and many new exhibits. CLICK HERE to download a free pre-publication draft overview (including the Table of Contents and a List of Exhibits). … Continue reading Preorder Now: Our 2019 Economic Report on U.S. Pharmacies and Pharmacy Benefit Managers

Express Scripts Confirms It (Again): Minimal Growth in Drug Spending and Prescription Costs

Last week, Express Scripts released its 2018 Drug Trend Report. (Free download.) As you will see below, drug spending is not “skyrocketing” or “soaring.” All payer types experienced extremely low growth in pharmacy benefit spending. Average net (post-rebate) drug costs declined. These data also shed light on specialty drug spending. Greater use of specialty medications—not cost increases—was the most significant driver of spending. The latest Express Scripts data confirm the cost and spending slowdown that I have highlighted in previous Drug Channels articles. I’ll ask again: Can someone please alert the media and our elected officials? Meanwhile, the report dodges … Continue reading Express Scripts Confirms It (Again): Minimal Growth in Drug Spending and Prescription Costs

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 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

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

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

The Big Three Generic Drug Mega-Buyers Drove Double-Digit Deflation in 2018. Stability ahead?

Oral generic drugs keep getting cheaper. The Food & Drug Administration (FDA) has intensified the generic industry’s competitive pressures with record drug approvals. The FDA’s actions, combined with the negotiating leverage of the large generic purchasing organizations, led to 2018’s persistent double-digit deflation in manufacturers’ selling prices for oral generic drugs. Below, we update our analysis of these generic drug mega-buyers. We estimate that for 2018, the three largest buyers  accounted for more than 90% of total U.S. generic drug purchases from manufacturers. In 2019, acquisitions and contract switches will shift market share among these groups, but not diminish their … Continue reading The Big Three Generic Drug Mega-Buyers Drove Double-Digit Deflation in 2018. Stability ahead?

Specialty Pharmacy M&A: Our Look at 2018’s Deals

Let’s kick off 2019 with a quick review of last year’s specialty pharmacy mergers and acquisitions (M&A). Our list (below) includes only deals that were publicly announced in 2018. Pharmacy benefit managers (PBMs) were especially busy. CVS Health bought five specialty pharmacies. UnitedHealth’s OptumRx bought Avella Specialty Pharmacy, the largest independent specialty pharmacy. Diplomat Pharmacy was uncharacteristically quiet during 2018, though it had been one of the most active acquirers in previous years. The specialty pharmacy industry is rapidly maturing, so I expect many more exits in the coming years. Looking to pick up a fast-growing specialty pharmacy? Click here … Continue reading Specialty Pharmacy M&A: Our Look at 2018’s Deals

A System Without Rebates: The Drug Channels Negotiated Discounts Model (rerun)

This week, I’m rerunning some popular posts before the holidays. Click here to see the original post and comments from August 2018. This has been the most impactful article that I have ever published on Drug Channels. Review it and get ready for 2019. P.S. You can also find this material at www.WorldWithoutRebates.com. (Yes, we bought that domain!) Are you ready for a world without rebates? In June, Alex Azar, Secretary of the U.S. Department of Health & Human Services (HHS), summarized his long-range vision for a new drug channel system: “[W]e may need to move toward a system without rebates, … Continue reading A System Without Rebates: The Drug Channels Negotiated Discounts Model (rerun)

New Disclosures Show CVS and Express Scripts Can Survive in a World Without Rebates. Are Plan Sponsors Now the Real Barrier to Disruption? (rerun)

This week, I’m rerunning some popular posts before the holidays. Click here to see the original post and comments from August 2018. This rerun explains how and why PBMs are shifting responsibility and blame toward third-party payers. In 2019, we’ll hear much more about how payers’ use of rebates affect patients’ out-of-pocket costs and distort the drug channel. Addressing the problems will require a major rethink of commercial and Medicare Part D pharmacy benefit designs. For my related $0.02 on the politics of “drug prices,” see also Drug Prices After the Midterms: Five Crucial Implications of Pharmacy Benefit Design. P.S. … Continue reading New Disclosures Show CVS and Express Scripts Can Survive in a World Without Rebates. Are Plan Sponsors Now the Real Barrier to Disruption? (rerun)