Drug Channels News Roundup, July 2020: Diabetes Costs, Regeneron’s Copay Support, MA Rethinks Coupons, My Favorite Chart Updated, and ABC’s Steve Collis

The steamy, socially distanced days of summer are here. Cool off by getting up close and personal with our refreshing selection of articles and insights. In this issue:

• Pricing problems for diabetes treatments

• Controversy over Regeneron’s copay support

• Massachusetts concedes that coupons help some patients (but accumulators hurt)

• A 2020 update to my all-time favorite chart

Plus, thoughtful perspectives on diversity from AmerisourceBergen CEO Steve Collis

P.S. Join the more than 9,700 followers of my curated links published on @DrugChannels on Twitter. My recent tweets have highlighted: VC’s pharmacy love, physicians’ biosimilar concerns, drug trend in workers’ comp, copay accumulator news, the outlook for insurance costs, remdesivir pricing, Philly pharmacies, how paid parking boosts telemedicine, and more.

ON SALE! We are offering our 2019–20 Economic Report on Pharmaceutical Wholesalers and Specialty Distributors at discounts up to 35% off. Sale prices valid thru September 8, 2020. The updated 2020-21 edition will be available in October 2020.

Diabetes Costs and Affordability in the United States, IQVIA Institute for Human Data Science

This new IQVIA report highlights precisely what’s wrong with our country’s drug pricing and benefit design. Two of the report’s charts are reproduced below, along with my commentary. These charts illustrate the following realities about diabetes therapies:

• Payers' drug costs and manufacturers' revenues have been dropping for the past four years

• Despite this decline, patients’ out-of-pocket costs have been rising

This is simply wrong. Insulin is an essential medicine that is sold to insurers and PBMs at deep discounts. However, too many patients are forced to make out-of-pocket payments based on insulin’s irrelevant list price. Rebates on insulin are a disproportionate contributor to the gross-to-net bubble.

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Third-party payers' benefit designs remain a significant barrier to addressing drug costs. Many continue to use the ever-growing rebate dollars of the gross-to-net bubble to offset overall plan costs rather than reducing patient’s out-of-pocket spending. Unfortunately, my 2019 Wall Street Journal op-ed on drug prices remains relevant.

Regeneron wasn’t paying ‘kickbacks.’ It was helping people pay egregious Medicare copays, STAT

I highly recommend this op-ed from RA Capita’s Dr. Peter Kolchinsky. Here’s a key sentence from the opening paragraph:

“Whether or not Regeneron broke the law, the suit illuminates the stupidity, cruelty, and counterproductivity of Medicare’s insistence that patients feel financial pain in order to receive medically necessary therapies.”

I hope that the pharma industry’s many critics think hard about the arguments that Dr. Kolchinsky makes here.

FYI, this article generated a heated debate on @DrugChannels, which featured rebuttal comments from Dr. Kolchinsky. Worth checking out the pro and the con.

Prescription Drug Coupon Study: Report to the Massachusetts Legislature, Massachusetts Health Policy Commission

As a complement to Dr. Kolchinsky’s op-ed, I recommend this reasonably balanced study from the Massachusetts Health Policy Commission (HPC) concerning copay support (coupons).

HPC concludes coupons are:

• Generally good when benefit design makes OOP too high

• Generally bad when drugs have generic alternatives

The report also worries that copay accumulator programs worsen affordability challenges for patients. (Shocking, I know.) Plus, there’s lots of interesting data about copay support in Massachusetts.

Chart of the day… or century?, American Enterprise Institute

Mark Perry of AEI recently published the annual update to his thought-provoking and informative chart (reproduced below). There’s so much to discuss and ponder! Services vs. manufacturing? Government involvement vs. free market? Domestic production vs. international competition?

BTW, don’t blame prescription drugs for the medical care inflation. Drugs constitute only 13% of the Medicare Care Services index. Sorry, anti-pharma haters!

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AmerisourceBergen's Steve Collis on coronavirus vaccine timeline, tangible diversity goals in company, Fortune

I encourage you to watch this brief video of a Fortune interview with Steve Collis, CEO of AmerisourceBergen. Steve shares important comments about diversity and inclusion along with thoughtful reflections on his South African roots. The most interesting portion of the video starts at around 4:30. Highly recommended.