Drug Channels News Roundup, January 2017: Gross-to-Net Details, Part B, Diplomat, CVS Health, and…This Site!

The weather may be chilly, but our monthly news update will keep you purring. Here are important new developments that will ignite your curiosity:

• A great new report that quantifies manufacturers’ gross-to-net discounts

• MedPAC targets Part B reimbursement

• Diplomat and CVS Health offer competing looks at the specialty drug pipeline

Plus, we here at Drug Channels have just released our 2017 media kit. Check it out and let us know how we can help you appear on the site!

P.S. I've been pretty active on the @DrugChannels Twitter  account. Follow along for my daily tweets on cool and intriguing stuff.

The Pharmaceutical Supply Chain: Gross Drug Expenditures Realized by Stakeholders, Berkeley Research Group

Anyone interested in the drug channel economics needs to read this report. The authors do a great job of quantifying the factors that reduce a drug’s Wholesale Acquisition Cost (WAC) list price to the net price earned by the manufacturer. They find that in 2015, 39% of initial gross drug expenditures was realized by brand manufacturers. Here’s the split from page 4:

[Click to Enlarge]

Stephen Ubl, president and CEO of PhRMA, highlighted a key implication of the study in the press release:

"The study begs an important question: Are we doing enough to ensure the growing amount of rebates and discounts flow to the patient?" said Ubl, noting that unlike care received at an in-network hospital or physician's office, a patient's cost-sharing for medicines, including payments for care received prior to meeting a deductible or from a co-insurance, is typically based on the list price of a medicine, not the net prices after rebates and discounts are factored in.

Medicare Part B drug payment policy issues, Medicare Payment Advisory Commission

I hope you didn’t get too comfortable after CMS scrapped its ill-conceived Medicare Part B Payment Model "experiment." This slide deck outlines MedPAC’s suggestions for reforming the Part B buy-and-bill system. Key recommendations include: reducing the Average Sales Price (ASP) markup to 3%, collecting an inflation rebate from manufacturers, combining J-codes for innovator products and their biosimilars, and allowing negotiated rates for Part B drugs. These are initial ideas, but they serve as a useful reminder that the current system is likely to evolve.

Specialty Drug Approvals: 2016 Highlights & 2017 Projections, Diplomat Pharmacy
A Robust and Evolving Specialty Pipeline, CVS Health

Here’s a useful double header. Diplomat Pharmacy and CVS Health have each released reports examining the specialty drug pipeline. Diplomat’s is more complete, because it highlights individual products. Both, however, are worthwhile additions to your specialty drug library.

2017 Media Kit, Drug Channels

And now for some shameless self-promotion! The 2017 Drug Channels Media Kit provides an overview of the site, our traffic, and opportunities for sponsored guest and event posts. Email my wife and business partner Paula Fein (paula@drugchannelsinstitute.com) to find out how you can reach our larger and growing audience.

[Click to download]