In this issue:
- Creepy! Express Scripts invests in 340B
- Shocking! What Americans really think about government drug price negotiations
- Scary! A terrifying tale of compounding pharmacies and the Cats movie
P.S. Join the more than 8,300 people who follow @DrugChannels on Twitter. My recent tweets have highlighted biosimilars, Part D in 2020, generic drug approvals, H.R.3 and its effects, 340B hypocrisy, ICER, Jamaican monetary policy, billionaires, and more.
Announcing Verity Solutions Acquisition by Express Scripts / Cigna, Verity Solutions
The 340B Drug Pricing Program money train keeps rolling along. Cigna’s Express Scripts business has acquired Verity Solutions, a private-equity funded 340B software vendor.
Verity and its competitors facilitate the exploding 340B contract pharmacy split-billing and services business. Other vendors have been acquired by large drug channel companies, including: MacroHelix (owned by the drug wholesaler McKesson); SunRx (owned by the PBM MedImpact); and Wellpartner (owned by CVS Health). There are also a number of smaller, independent companies.
This transaction shows that large public companies expect to continue profiting from the 340B program. To follow the money, see Here’s How PBMs and Specialty Pharmacies Snag Super-Size Profits from the 340B Program.
Verity and its competitors facilitate the exploding 340B contract pharmacy split-billing and services business. Other vendors have been acquired by large drug channel companies, including: MacroHelix (owned by the drug wholesaler McKesson); SunRx (owned by the PBM MedImpact); and Wellpartner (owned by CVS Health). There are also a number of smaller, independent companies.
This transaction shows that large public companies expect to continue profiting from the 340B program. To follow the money, see Here’s How PBMs and Specialty Pharmacies Snag Super-Size Profits from the 340B Program.
KFF Health Tracking Poll – October 2019, Kaiser Family Foundation
The latest Kaiser Family Foundation (KFF) poll contains an intriguing result: Americans want the government to negotiate for lower prices on drugs—but only if those prices translate into lower out-of-pocket costs without sacrificing innovation and access.
The public’s desire for negotiation is highly sensitive to tradeoffs. If the lower prices lead to less research and development (R&D) or limit access, then a majority oppose negotiation. Here’s the key chart from the October survey results. Compare the top two questions with the bottom two.
Keep this survey in mind as the debate over H.R.3 rages on. The CBO estimates that this bill would cut pharma industry revenues by up to $1 TRILLION over next 10 years and block at least 8 to 15 new drugs. There are many crucial caveats to the CBO’s new drug estimates, so I don’t understand how anyone can be highly confident in this incomplete and lowball SWAG.
BTW, KFF has fielded zero questions about lowering prices for the 85% of non-drug U.S. healthcare spending. Shocking. π
The public’s desire for negotiation is highly sensitive to tradeoffs. If the lower prices lead to less research and development (R&D) or limit access, then a majority oppose negotiation. Here’s the key chart from the October survey results. Compare the top two questions with the bottom two.
[Click to Enlarge]
Keep this survey in mind as the debate over H.R.3 rages on. The CBO estimates that this bill would cut pharma industry revenues by up to $1 TRILLION over next 10 years and block at least 8 to 15 new drugs. There are many crucial caveats to the CBO’s new drug estimates, so I don’t understand how anyone can be highly confident in this incomplete and lowball SWAG.
BTW, KFF has fielded zero questions about lowering prices for the 85% of non-drug U.S. healthcare spending. Shocking. π
Medicaid Health Plan Pharmacy Drug Coverage Transition, Michigan Department Of Health And Human Services
More bad news for PBMs: Michigan plans to shift its Medicaid pharmacy program from managed care to fee-for-service.
It’s positive news, however, for retail pharmacy profits. Under Medicaid fee-for-service, pharmacy reimbursement equals acquisition cost (before wholesaler rebates) plus an enhanced dispensing fee. Acquisition cost reimbursement models are a lower risk/lower return model for pharmacies. To understand why, see Sections 8.4. and 11.2.5. of our 2019 Economic Report on U.S. Pharmacies and Pharmacy Benefit Managers.
It’s positive news, however, for retail pharmacy profits. Under Medicaid fee-for-service, pharmacy reimbursement equals acquisition cost (before wholesaler rebates) plus an enhanced dispensing fee. Acquisition cost reimbursement models are a lower risk/lower return model for pharmacies. To understand why, see Sections 8.4. and 11.2.5. of our 2019 Economic Report on U.S. Pharmacies and Pharmacy Benefit Managers.
Compounding Pharmacies, Last Week Tonight with John Oliver
John Oliver did a funny but frightening takedown of compounding pharmacies. He highlights historical problems with state and federal oversight as well as unethical actions by some pharmacists and pharmacy owners. Worth watching. Click here if you can’t see the video.
That said, Oliver is quick to push for more oversight. In reality, all pharmacists should hold themselves to extremely high ethical and professional standards. That's what we all expect. Most pharmacists do so, but the ones highlighted in his video did not.
The International Academy of Compounding Pharmacists (IACP) saw the segment as a trick, not a treat. It complained that Oliver “strung together old and tragic news with cherry-picked examples and a couple of scornful references to the new Cats movie." Click here to read the full IACP statement.
That said, Oliver is quick to push for more oversight. In reality, all pharmacists should hold themselves to extremely high ethical and professional standards. That's what we all expect. Most pharmacists do so, but the ones highlighted in his video did not.
The International Academy of Compounding Pharmacists (IACP) saw the segment as a trick, not a treat. It complained that Oliver “strung together old and tragic news with cherry-picked examples and a couple of scornful references to the new Cats movie." Click here to read the full IACP statement.
Nutritionists Report They Wouldn’t Have To Figure Out Which Foods Were Bad For You If Americans Just Ate Normal For Once, The Onion
Should you eat red meat? As usual, The Onion has the best take on the complex and controversial topic of nutrition research. πππ
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