Drug Channels News Roundup, September 2018: Gilead’s Price Cuts, Out-of-Pocket Costs, Hospital-Physician Vertical Integration, and WXPN + Me

Autumn is here, and we’ve squirrelled away some great acorns that have fallen from the mighty Drug Channels oak trees:

• Gilead’s new pricing starts to pop the gross-to-net bubble

• New fact-based insights on patient out-of-pocket costs and prescription abandonment

• Cool new stats on hospital-physician vertical integration by specialty

• The U.S. healthcare crisis will probably never end (Sorry.)

Plus, your friendly neighborhood blogger joins the board of 88.5 WXPN, the country’s leading non-commercial Triple A (adult, album, alternative) radio station.

P.S. Follow my daily stream of links to neat stuff at @DrugChannels on Twitter.Recent tweets have highlighted rebates, step therapy, PSAOs, white bagging, PBM network spreads, lab-based microbreweries, and more.

Gilead Subsidiary to Launch Authorized Generics of Epclusa® (Sofosbuvir/Velpatasvir) and Harvoni® (Ledipasvir/Sofosbuvir) for the Treatment of Chronic Hepatitis C, Business Wire

Gross-to-net bubble disruption alert! On Monday, Gilead Sciences announced that it will start a subsidiary to launch authorized generics (AG) of its two high-list/high-rebate hepatitis C virus (HCV) treatments. The list prices will reflect the actual, post-rebate net prices of these therapies. The AGs’ list prices will be more than 60% lower than those of their brand counterparts.

Gilead’s move is positive for patients, who suffer from the reverse insurance problem that’s at the core of our current rebate system. See my explanation in New Disclosures Show CVS and Express Scripts Can Survive in a World Without Rebates. Are Plan Sponsors Now the Real Barrier to Disruption?.

It’s also good for Gilead, whose HCV products have been losing share to AbbVie’s Mavyret, per the data in 2019 Express Scripts Formulary Exclusions: Hepatitis C Changes Show Why the Drug Channel Must Change, Too. The impact on wholesalers and pharmacies is uncertain, given that they will be recontracting in an attempt to preserve margins.

Change is coming to U.S. drug channels. Is your organization prepared for the new world?

Patient Affordability Part Two: Implications For Patient Behavior & Therapy Consumption, IQVIA

This valuable new study from IQVIA examined patient out-of-pocket expenses. It has loads of great fact-based insights. For example, 69% of commercially insured patients did not start drug therapy when out-of-pocket costs exceeded $250. (See chart below.) The report also quantifies the impact of deductibles and coinsurance on prescription abandonment. IMHO: Deterring utilization with excessive cost-shifting is unfair and short sighted.

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Hospital-Physician Consolidation Accelerated In The Past Decade In Cardiology, Oncology, Health Affairs

We all know that hospital and health systems have been acquiring physician practices. This article quantifies this vertical integration by practice type. From 2007 to 2017, oncology and cardiology practices experienced the biggest jumps.

Here’s a key chart from the study:

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Despite what hospital executives say, the authors are correct in writing that “a growing body of evidence suggests that vertical integration instead increases costs, with no discernible impact on quality.” Sad but true.

Half A Century Of The Health Care Crisis (And Still Going Strong), Health Affairs

I highly recommend this article, though it may leave you feeling a bit depressed. The author gamely chronicles how the U.S. healthcare system has apparently been in “crisis” for at least 50 years. This history suggests that disruption may be a lot harder—and take a lot longer—than any of us thinks. You may begin to believe that even Jeff Bezos won’t be able to save us.

ADAM JOINS THE WXPN POLICY BOARD!

We here in Philadelphia are blessed to have 88.5 WXPN, the nationally recognized leader in Triple A (adult, album, alternative) radio. It’s a non-commercial, member-supported radio service of the University of Pennsylvania. You may know it from World Café, a daily program that is syndicated to more than 200 NPR stations.

I love XPN. I discover amazing new artists in rock, blues, roots, and folk music, while also hearing some of my favorites. If you’re bored with traditional radio and want to expand your horizons, stream XPN and enjoy the music!

This has nothing to do with the pharmaceutical industry, but I thought you might want to know. Rock on!