Employers Are Absorbing Even More Manufacturer Rebates from Their PBMs

The likelihood of a radical restructuring of the U.S. drug channel has never been greater. A serious effort exists to remove or decrease the role of rebates. Today, we shed light on one crucial aspect of the current rebate system: how employer-sponsored health plans access the billions of dollars in manufacturer rebates that are negotiated by their pharmacy benefit managers (PBMs). For this analysis, we rely on the Pharmacy Benefit Management Institute’s (PBMI) excellent new reports. As you will see, employers are receiving an increasing share of the rebate money collected by pharmacy benefit managers. However, employers’ rebate agreements with … Continue reading Employers Are Absorbing Even More Manufacturer Rebates from Their PBMs

Drug Channels News Roundup, February 2019: Diplomat’s Troubles, Sanofi’s Gross-to-Net Bubble, and the Legality of Accumulators

Winter—or at least February—is almost over! Celebrate the imminent return of spring with our selection of noteworthy news from around the drug channel. In this issue: My $0.02 on Diplomat’s failures and the new realities of specialty pharmacy Sanofi’s 2018 gross-to-net bubble Legal issues for copay accumulators Plus, The Onion reports a health insurance miracle! P.S. My @DrugChannels Twitter account now has more than 7,000 followers. Join the fun for my daily commentary on the industry’s news. Read more » Copyright © 2006-2019 Pembroke Consulting, Inc. d/b/a Drug Channels Institute. Drug Channels® is a registered trademark of Pembroke Consulting, Inc. … Continue reading Drug Channels News Roundup, February 2019: Diplomat’s Troubles, Sanofi’s Gross-to-Net Bubble, and the Legality of Accumulators

The Top 15 U.S. Pharmacies of 2018: M&A Reshapes the Market

Next week, Drug Channels Institute will release our 2019 Economic Report on U.S. Pharmacies and Pharmacy Benefit Managers. It’s the tenth edition of our popular and comprehensive examination of the entire drug pricing, reimbursement, and dispensing system. The exhibit below—one of 180 in our new report—provides a first look at the 15 largest pharmacies, ranked by total U.S. prescription dispensing revenues for calendar year 2018. As you will see, vertical and horizontal mergers and acquisitions are reshaping the pharmacy and PBM industries—and enabling the big to get even bigger. I highlight some of the major transactions that affected our ranking. … Continue reading The Top 15 U.S. Pharmacies of 2018: M&A Reshapes the Market

How Health Plans Profit—and Patients Lose—From Highly-Rebated Brand-Name Drugs

My Wall Street Journal op-ed (Don’t Blame Drug Prices on ‘Big Pharma’) has received a lot of attention. Especially notable was a letter to the editor from American Health Insurance Plans (AHIP). It claims that “the savings that insurance providers negotiate are returned directly to consumers through lower premiums and out-of-pocket costs.” Don’t believe this misleading half-truth. It distorts the primary argument of my WSJ op-ed: Patients often pay full price for drugs that are sold to insurers at deep discounts. Below, to show you why, I follow the dollar for an expensive, highly rebated brand-name drug used by a consumer … Continue reading How Health Plans Profit—and Patients Lose—From Highly-Rebated Brand-Name Drugs

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

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

GAO Confirms It: 340B Hospitals and Contract Pharmacies Profit from Low-Income, Uninsured Patients (rerun)

This week, I’m rerunning some popular posts before the holidays. Click here to see the original post and comments from July 2018. Expect 340B to stay in the news during 2019. Unfortunately, a sensible, bipartisan legislative fix still seems unlikely. The United States Government Accountability Office (GAO) has just issued a must-read report on the 340B Drug Pricing Program: Federal Oversight of Compliance at 340B Contract Pharmacies Needs Improvement. Some of the report’s most startling revelations confirm our worst fears about how hospitals and pharmacies are abusing the 340B program. Here are two especially dispiriting findings from the GAO’s analysis: … Continue reading GAO Confirms It: 340B Hospitals and Contract Pharmacies Profit from Low-Income, Uninsured Patients (rerun)

CMS Confirms It (Again): Minimal Drug Spending Growth, While Hospital and Physician Spending Keep Going

Last week, the econowonks at the Centers for Medicare & Medicaid Services (CMS) released the 2017 National Health Expenditure (NHE) data. Links below. For 2017, drug spending grew by a mere 0.4%—significantly below the growth of spending on hospitals, physician services, and overall national healthcare costs. These latest CMS data confirm the drug spending slowdown that I have highlighted in previous Drug Channels articles. Too many people—including politicians, journalists, and a certain billionaire—have committed to a false narrative of “skyrocketing” drug spending. Hmm, I don’t recall any of them ranting about “hospital prices” or “physician salaries”—two categories that together account … Continue reading CMS Confirms It (Again): Minimal Drug Spending Growth, While Hospital and Physician Spending Keep Going

Five Industry Trends for U.S. Drug Wholesalers in 2019

Modern Distribution Management recently published my article 2018 MDM Market Leaders | Top Pharmaceuticals Distributors. It is an excerpt from our 2018–19 Economic Report on Pharmaceutical Wholesalers and Specialty Distributors. Below, I republish the section of the article highlighting five significant industry trends affecting the U.S. drug wholesaling industry. I think Drug Channels readers will enjoy this summary as we look toward 2019. Click here to download a free overview of the full 2018-19 report. P.S. I’ll be discussing these and other topics next week in my keynote address at CBI’s 14th Life Sciences Trade and Channel Strategies. Hope to see … Continue reading Five Industry Trends for U.S. Drug Wholesalers in 2019

Pharmacist Salaries Keep Rising: Hospitals Continue to Lead in Wage and Employment Growth

Time to update our exclusive annual analysis of pharmacist salaries. We again rely on the latest Occupational Employment Statistics (OES) data from the Bureau of Labor Statistics (BLS). For 2017, the average gross base salary for a pharmacist at a retail, mail, long-term care, and specialty pharmacy reached nearly $122,000—up slightly from the 2016 figure. Meanwhile, the share of pharmacists who work at hospitals reached a new high. Pharmacists who work at hospitals also had higher salaries and greater salary increases than those of pharmacists in outpatient dispensing formats. Some people have predicted doom and gloom for pharmacists. These latest … Continue reading Pharmacist Salaries Keep Rising: Hospitals Continue to Lead in Wage and Employment Growth