Drug Channels News Roundup, June 2020: CVS’s New GPO, CMS on Copay Accumulators, GoodRx Fees, Supermarket Pharmacies, and Merck’s Ken Frazier

Happy 244th birthday, America! Before you declare your (socially-distanced) independence, get up close and personal with these Drug Channels fireworks:

• CVS launches a new GPO for its PBM

• CMS rethinks copay accumulators

• Here’s how GoodRx makes money

• Supermarkets face pharmacy challenges

Plus, powerful and important comments from Ken Frazier, CEO of Merck.

P.S. Join the more than 9,500 followers of my curated links to neat stuff at @DrugChannels on Twitter. My recent tweets have highlighted: Amazon’s activities, PillPack’s bad reviews, 340B outrages, rebate reform redux, biosimilar pricing, managed Medicaid market shares, drug pricing, blockchain hype, and the warp speed vs. hyperspace debate.

PBMs and Drug Spending in 2019: CVS Health and Express Scripts Outperform Prime Therapeutics

It’s time for our annual Drug Channels examination of PBM drug spending reports. For 2019, we again aim our magnifying glass at the annual trend reports from the largest pharmacy benefit managers (PBMs): CVS Health, Express Scripts, and Prime Therapeutics. (See their report links below.)

Once again, we find that commercial drug spending did not race higher—contrary to what you keep hearing from journalists and politicians. Spending rose by less than 3% in 2019, continuing a multiyear trend of slow growth. At some plan sponsors, total drug spending even declined. For specialty drugs, higher utilization—not drug costs—was again the biggest factor driving specialty spending growth.

Notably, clients of Prime Therapeutics fared worse than those of Express Scripts and CVS Caremark. Below, I explain three factors behind Prime’s underperformance. Its third place finish highlights why the PBM industry continues to consolidate.

The Ripple Effect of Medication Access Barriers—Disruption to Stakeholder Workflows, Damage to Brand Perception, and Detriment to Innovation

Today’s guest post comes from Julia Phillips, VP, Pharma Accounts & Enablement at CoverMyMeds.

Julia discusses how medication access challenges can negatively impact brand-name drugs.

For more, check out this overview of CoverMyMeds' technology solutions that enhance patients’ access: Enabling Medication Access Through Technology.

Read on for Julia’s insights.

New HRSA Data: 340B Program Reached $29.9 Billion in 2019; Now Over 8% of Drug Sales

The 340B Drug Pricing Program has logged another year of incredible growth.

According to data provided to Drug Channels by the Health Resources and Services Administration (HRSA), discounted 340B purchases were at least $29.9 billion in 2019. That figure is an astonishing 23% higher than its 2018 counterpart.

Since 2014, purchases under the 340B program have tripled. Over the same period, manufacturers’ net drug revenues have grown at an average rate that’s below 5%. Consequently, the 340B program has grown to account for more than 8% of the total U.S. drug market and about 16% of the total rebates and discounts that manufacturers provide.

What’s more, the 340B program is now almost as large as the Medicaid program’s outpatient drug sales. However, 340B lacks Medicaid’s regulatory infrastructure and controls. Medicaid rebates directly and transparently lower drug costs for the government, while 340B discounts disappear into providers’ financial statements. It’s troubling and hard to defend.

Read on for our latest details on the 340B program’s ongoing and startling growth.

Pharmacist Job Market in 2019: Salaries Grew, Retail-to-Hospital Employment Shift Accelerated

The Bureau of Labor Statistics (BLS) recently released its employment data for 2019. That means it’s time to update our annual Drug Channels analysis of pharmacist salaries and employment.

Average base salaries were about $125,000, though there was substantial variation across practice settings.

Total pharmacist employment grew in 2019. Consistent with our previous analyses, the share of pharmacists who work at hospitals reached a new high.

However, the number of pharmacists working in retail settings decreased. The challenges facing the retail pharmacy industry, which I discuss in this video, are now showing up in the employment data. It’s more bad news for the pharmacists who are working for the weakened.

Visit Asembia’s Specialty Pharmacy Summit Virtual Experience

Like many of you, I was disappointed that Asembia had to cancel its 2020 Specialty Pharmacy Summit.

As a small consolation, Asembia is providing a series of on-demand business sessions. You can view them for FREE if your registration to the 2020 Specialty Pharmacy Summit was transferred to the 2021 Summit. Everyone else will have to pay a small fee.

Click here to register for access to Asembia’s Specialty Pharmacy Summit Virtual Experience. (You must register and create a new account, even if you are eligible for free access.)

Virtual business sessions cover such topics as market trends, the specialty pipeline, accreditation, federal health policy, digital health, and more.

Two highlights:

• The State of Specialty Pharmacy 2020: Market Data and Trends—Adam J. Fein, Drug Channels Institute (That’s me!)

• US Specialty Pharmaceuticals Trends, Issues and Outlook—Doug Long, IQVIA

For the full Las Vegas experience, I suggest that you review this important story before viewing the business sessions.

In the meantime, mark your calendars for the 2021 Specialty Pharmacy Summit, which is scheduled for May 2 to 5, 2021.