Drug Channels delivers timely analysis and provocative opinions from Adam J. Fein, Ph.D., the country's foremost expert on pharmaceutical economics and the drug distribution system. Drug Channels reaches an engaged, loyal and growing audience of more than 100,000 subscribers and followers. Learn more...
Once again, I thank you, dear readers, for welcoming Drug Channels into your inboxes, browsers, and apps. I’m proud of the diverse and thoughtful audience who follows and comments on our unique content. The DCI community now includes more than 100,000 subscribers and followers from all parts of the industry. To stay in touch, you can sign up for an email subscription or follow me on LinkedIn.
We’ve enjoyed bringing you our perspectives and curated links in 2024. We hope that you had fun engaging with us and the DCI community.
Wishing you and your family health and happiness,
Adam and the DCI team
In this issue:
Unexplainable pharmacy reimbursements in Medicare Part D
Surprise! There are more (not fewer) independent pharmacies
Plan risks from shady alternative funding programs
A brief but enlightening history of pharmacy from 1385 to today
Jim Gaffigan jokes about GLP-1s
Plus, a fun photo of two cool (but familiar) dudes.
The econowonks at the Centers for Medicare & Medicaid Services (CMS) recently released the latest projections for U.S. spending on healthcare. (See links below.) These data provide the latest official look at how the Inflation Reduction Act (IRA) will affect U.S. healthcare spending.
As you will see below, CMS projects that outpatient prescription drugs dispensed by retail and mail pharmacies will remain a small share of total U.S. healthcare spending. The Inflation Reduction Act’s changes to the Medicare Part D program, along with coming demographic shifts, will have a significant impact on future spending by government programs and consumers.
Nonetheless, taxpayers—primarily via Medicare and Medicaid—will continue to dominate the employer-sponsored insurance market. Like it or not, vertically integrated insurers, PBMs, specialty pharmacies, and providers will continue to prosper.
This week, I’m rerunning some popular posts while I prepare for tomorrow’s Drug Channels Outlook 2025 live video webinar. During the webinar, I'll share some thoughts on how vertical integration will affect the buy-and-bill channel.
Time for DCI’s annual update on the channels for provider-administered drugs. Below, I review the latest data on 2024 trends and compare them to the pre-pandemic figures.
For 2024, payers report that specialty pharmacies—via white and clear bagging—have displaced buy-and-bill for a meaningful share of commercial covered lives utilizing provider-administered oncology drugs. However, provider pushback has limited specialty pharmacies' share gains, so that buy-and-bill remains the most common channel for these products.
Payers’ adoption of white bagging—and provider’s push back—reflect the ongoing battle for oncology margin in U.S. drug channels. Let’s hope that patients don’t get caught in the crossfire.
This week, I’m rerunning some popular posts while I prepare for Friday’s Drug Channels Outlook 2025 live video webinar. During the webinar, I'll provide an update the 340B program, which continues to defy gravity. Click here to see the original post.
In my recent The 340B Drug Pricing Program: Trends, Controversies, and Outlook video webinar, I provided an update on the economics of the 340B program, reviewed the multiple controversies surrounding the program’s operations, discussed state and federal legislation, and analyzed how the Inflation Reduction Act of 2022 (IRA) will alter the 340B market.
In the video excerpt below, I walk through a brief history of 340B contract pharmacies. I then document how five multi-billion-dollar, for-profit, publicly traded pharmacy chains and pharmacy benefit managers (PBMs)—Cigna (via Express Scripts), CVS Health, UnitedHealth Group (via OptumRx), and Walgreens, Walmart—continue to dominate the 340B contract pharmacy market. I conclude with a “follow the dollar” example of 340B prescription economics with contract pharmacies.
PBMs’ negotiating leverage against pharmaceutical manufacturers has been a key factor inflating the gross-to-net bubble—the ever-growing dollar gap between sales at brand-name drugs’ list prices and their sales at net prices after rebates, discounts, and other reductions.
For 2023, DCI estimates that the total value of manufacturers’ gross-to-net reductions for all brand-name drugs was $334 billion. (As we describe below, our latest estimates make a crucial change in the presentation of these figures compared with previous editions.)
Multiple forces are poised to pop the gross-to-net bubble for high-list/high-rebate products. This will force PBMs to further evolve their business models, while challenging plan sponsors and the FTC to follow the dollars.
Alas, patients remain caught in the drug channel's murky waters. I still can’t predict when SpongeBob SquarePants departs from Drug Channels—although I wish him a happy 25th birthday!
This week, I’m rerunning some popular posts while I prepare for Friday’s Drug Channels Outlook 2025 live video webinar. Click here to see the original post. During Friday's webinar, I’ll share some updated thoughts on biosimilars and PBM’s private label products.
The Humira biosimilar market just took another step forward—but remains far from its ideal state.
Below, we review the 20 products competing with Humira—including four private-label products marketed by in-house subsidiaries owned by CVS Health and Cigna.
As you will see below, CVS Health’s formulary actions led to rapid uptake of a low-list-price biosimilar. Express Scripts’ 2025 strategy will also drive biosimilar adoption, although its pricing strategy is more problematic.
But what’s really going to bake your noodle later: Would the largest PBMs have popped the gross-to-net bubble for Humira if they hadn’t been able to profit from the switch?
It’s time to pay attention to the money behind the 340B curtain.
Minnesota just released the industry‘s first ever mandated financial report on the 340B Drug Pricing Program. Below, I do a wicked deep dive into the data and highlight crucial implications about spending, profits, pharmacies, plans, patients, program integrity, and more.
There are important limitations to these data. But Minnesota’s report marks a valuable first step on the yellow brick road to the wonderful world of transparency. I suspect similar reports are gonna be popular.
And don't forget to put on your ruby slippers and hear from Doctor of Thinkology Adam J. Fein. During next week’s Drug Channels Outlook 2025 live video webinar, he'll tell you what's ahead for the program that continues to defy gravity.
Coming soon: Drug Channels Outlook 2025, our biggest live video webinar of the year. Join Adam J. Fein, Ph.D., on December 13, 2024, from 12:00 p.m. to 1:30 p.m. ET., as he helps you and your team get ready for 2025 by outlining key issues and uncertainties that will surely affect your planning. Click here to learn more and sign up.
Today’s guest post comes from Catherine Wood Hill, SVP of Marketing at PHIL.
Catherine reviews the prescription lifecycle from the perspectives of patients, providers, and manufacturers. She explains how manufacturers can support patients with clear comunication about their prescriptions. Catherine then outlines five strategies to help providers have more informed conversations with patients.
Today, we examine the seven largest retail chains’ participation in the 12 major 2025 Part D networks that the five largest plan sponsors will offer. As always, we provide you with a handy table for tallying each chain’s participation and changes from 2024 to 2025.
As you’ll see, Albertsons and Publix are the only major retail chains that will be participating in all of the major PDP’s preferred and open pharmacy networks. Walmart and Walgreens will maintain strong participation, while CVS will pull back. Low-income subsidy (LIS) beneficiaries, whose ranks expanded due to the IRA, will continue to have no financial advantage for using a preferred pharmacy.
In a future post, we’ll delve into how smaller pharmacies will participate in the 2025 Part D plans, by examining the pharmacy services administrative organizations (PSAOs).
Today’s guest post comes from Kala Bala, SVP, Enterprise Access & Data Expertise, MMIT, a Norstella company and Dinesh Kabaleeswaran, SVP, Advisory Services at MMIT, a Norstella company.
The authors outline the challenges that manufacturers face when integrating internal and external datasets to build market access and commercialization strategies. They argue that unified datasets and the addition of AI-driven analytics tools can improve decision making throughout a drug’s life cycle.
Uh oh. As I predicted, the stand-alone Medicare Part D prescription drug plans (PDP) market is vanishing.
For 2025, DCI’s exclusive analysis of Center for Medicare & Medicaid Services’ (CMS) data reveals that the number of PDPs will drop to a historic low. What’s more, the share of plans with a preferred cost sharing pharmacy network will fall to its lowest rate in more than 10 years. Check out the distressing charts below and our review of the remaining national players (Aetna, Cigna, Humana, UnitedHealthcare, and WellCare).
The destruction of the Part D market marks yet another unintended consequence of the Inflation Reduction Act of 2022 (IRA). The IRA makes PDPs less economically viable and will drive even more seniors into Medicare Advantage Prescription Drug (MA-PD) plans—despite the challenges facing those plans. The 2025 decline will occur even after CMS gifted $7 billion to PDPs to prevent a complete collapse of the 2025 market.
Legislate in haste. Repent in leisure.
What else should you expect for 2025? Find out during my upcoming live video webinar, Drug Channels Outlook 2025, on December 13, 2024, from 12:00 p.m. to 1:30 p.m. ET. Click here to learn more and sign up. As always, we are offering special discounts if you want to bring your whole team.
Adam J. Fein, Ph.D., president of Drug Channels Institute (DCI) and the author of Drug Channels, invites you to join him for DCI’s new live video webinar:
This post describes the event and explains how to purchase a registration. (Or, just click here to order.) The webinar will be broadcast from the Drug Channels studio in beautiful downtown Philadelphia.
Join Dr. Fein as he helps you and your team get ready for 2025 by outlining key issues and uncertainties that will surely affect your planning. This event can be both a capstone of your annual learning and a touchpoint for the future. DCI’s Outlook webinars have proven to be reliable and informative guides to crucial aspects of the ever-evolving healthcare industry.
During the event, Dr. Fein will share his latest thinking and projections on a wide range of topics, including:
Latest predictions for the Inflation Reduction Act
Expectations for the Medicare Part D market in 2025 and beyond
Update on 340B Drug Pricing Program’s controversies
Impact of the new Trump administration and Congress on the drug channel
Vertical integration and consolidation trends—and prospects for dis-integration and de-consolidation
The state of biosimilar markets
What’s next for PBMs’ private label products and GPOs
Retail pharmacy’s future
Prospects for direct-to-patient channels
What’s ahead for discount cards and cash-pay pharmacies
The outlook for state and federal legislation on PBMs and the drug channel
Gross-to-net bubble developments
And much more!
PLUS: During the webinar, Dr. Fein will give participants an opportunity to unmute themselves and ask live questions. The webinar will last at least 90 minutes to accommodate audience questions.
As always, Dr. Fein will clearly distinguish his opinions and interpretations from the objective facts and data. He will draw from exclusive information found in DCI's economic reports .
Read on for full details on pricing and registration.
Today’s guest post comes from Chris Dowd, Senior VP of Market Development at ConnectiveRx.
Chris examines three key trends that will affect patient support programs: the Inflation Reduction Act (IRA), legal/regulatory battles over copay adjustment programs, and uncertainties following a national election. He then outlines three actions that should guide manufacturers' preparation.
Here on Drug Channels, we have long highlighted the boom in provider-administered biosimilars. In contrast to the pharmacy market, adoption of these biosimilars is growing, prices are dropping, and formulary barriers continue to fall.
Novel transparency information reveals that this good news doesn’t always translate into savings. Below, we rely on a unique data set from Turquoise Health to examine how much four national commercial health plans—Aetna, Anthem, Cigna, and UnitedHealthcare—paid hospitals for Avastin and its two most significant biosimilar competitors.
As we demonstrate, health plans pay hospitals far above acquisition costs for biosimilars. What’s more, plans can pay hospitals more for a biosimilar than for the higher-cost reference product. The U.S. drug channel system is warping hospitals’ incentives to adopt biosimilars, while simultaneously raising costs for commercial plans.
The namesake of my alma mater once said: “Sunlight is said to be the best of disinfectants.” What would happen if we disinfected the entire channel?
Today’s guest post comes from Kimberley Chiang, Vice President of Biopharma Commercial Solutions at CoverMyMeds
Kimberley highlghts the crucial roles of field reimbursement managers in removing access and reimbursement barriers. She then identifies the keys to successful implementation of field reimbursement services.
Today’s guest post comes from Shabbir Ahmed, Chief Commercial Officer at CareMetx.
Shabbir explains the barriers that providers face when dealing with branded portals for multiple products. He then maintains that patients can access new therapies more quickly when the manufacturer relies on a brand-agnostic hub connected to a large network of providers and integrated with the systems those providers use daily.
Reality has again failed to support the spin surrounding the 340B Drug Pricing Program.
For 2023, discounted purchases under the 340B program reached a record $66.3 billion—an astounding $12.6 billion (+23.4%) higher than its 2022 counterpart. The gross-to-net difference between list prices and discounted 340B purchases also grew, to $57.8 billion (+$5.5 billion). 340B purchases are now almost 40% larger than Medicaid’s prescription drug purchases.
Hospitals again accounted for 87% of 340B purchases for 2023. Purchases at every 340B covered entity type grew, despite drug prices that grew more slowly than overall inflation.
Lobbyists claim that manufacturers’ 340B contract pharmacy changes are “stripping billions of dollars from the healthcare safety net.” But every year, the data tell a very different story. Only in the U.S. healthcare system can billions more in payments and spreads be considered a cut.
Read on for full details and our analysis, along with fresh details of troubling behavior by the Health Resources and Services Administration (HRSA).
Pharmacy and distribution models are growing increasingly complex. Stop running in circles—It’s time to unlock proven strategies to propel market access.
What is the secret to success? Trade and Channel Strategies is bringing together industry experts to deliver specific strategies and talk best practices in tackling the latest industry challenges.
As the landscape rapidly evolves, there are only two choices—Adapt or risk falling behind. With policy changes and market fluctuations, specifically surrounding the DSCSA and IRA, the loss of exclusivity wave, adoption of low-WAC products affecting GTN and the rise of innovations within the pharmacy sector, there has never been a more important time for industry to unite. A program driven by market dynamics and led by champions of channel strategy, join your peers now to master the complexities of pharmacy and distribution models to accelerate market access—It's all happening December 10-12.
Why do trade and channel professionals choose this pivotal event?
The challenge of staying viable among shifting market dynamics while meeting business objectives is heavy. Professionals are left with many questions, including:
How will the new administration affect the distribution channel?
Is my organization haemorrhaging money to stay afloat with the shift to alternative distribution and pharmacy models?
Does the DSCSA deadline change affect my organization? Am I still prepared?
Join the experts for three dedicated days of collaborative discussions that will give you the answers to these questions and so many more. Leaders in the landscape are uniting and will dive into the top trends for innovative distribution, integrated pharmacy models and talk the truth about the future of trade.
WHAT CAN YOU EXPECT?
Vital insights from industry’s leading pharmacy and distribution experts, including:
Bill Roth, Senior Vice President of Consulting, Blue Fin Group, An IntegriChain Company
Patrick Lupo Group Vice President, Pharmacy Trade and Specialty, Walgreens
Eliane Maalouf, Director Trade and Fulfillment, Mass General Brigham Specialty Pharmacy
Stephanie Wirkes, Head of Distribution and Strategy Execution, Bayer
John Harlow, Chief Commercial Officer, Melinta Therapeutics
Aria Cohen, Vice President, Head of Market Access, Alkeus Pharmaceuticals, Inc.
Elizabeth Cherry, Program Director for Trade Relations, Vanderbilt Specialty Pharmacy
Danielle Bryan, PharmD, CSP, Program Director, Specialty Pharmacy Trade Relations, Vanderbilt University Medical Center
Thomas Scalone, Director, Trade Strategy and Operations, Bristol Myers Squibb
Dina Lynch, VP, Market Access and Reimbursement, Renibus Therapeutics
And more!
Tackle the hottest topics facing industry right now, including:
Keynote Address: Access and Channel 2024 In-Review and Preview of 2025
Pharmacy Evolved—Aligning Commercialization to the Changing Pharmacy Channel
Advanced Trade Leaders Executive Session
Navigate and Operationalize the IRA
Focused Multi-Track Offerings:
Supply Chain, Distribution and Logistics
Pharmacy Models and Reimbursement Strategies
Data, Innovation and Analytics
Health Systems and Pharma Partnering Symposium
Balancing the GTN Bubble with Market Access Priorities
What’s Happening in Retail—Brick and Morter, Home Delivery and Cash Pay Pharmacies
Navigating Post Deadline Challenges—DSCSA Compliance and Serialization Updates
Four Roundtable Breakout Discussions:
What Good Looks Like in a 3PL/Manufacturer Partnership
Optimizing Healthcare Partnerships
Women in Trade
GLP-1s and New Product Archetypes
Actions Needed to Mitigate and Prevent Drug Shortages
Case Study: Master Your Organization Chart—Ensuring Higher Cross Functional Interactions
Three Interactive Workshops:
Trade 101
Advanced Trade Leaders Executive Session
Health Systems Fundamentals
And more!
Exclusive Offer—Download the agenda and register today—Be sure to use your exclusive promo 24DC10 to save 10% off* of your registration.
See you there!
* Cannot be combined with other offers, promotions or applied to an existing registration. Other restrictions may apply.
The content of Sponsored Posts does not necessarily reflect the views of HMP Omnimedia, LLC, Drug Channels Institute, its parent company, or any of its employees. To find out how you can promote an event on Drug Channels, please contact Paula Fein(paula@DrugChannels.net).
Today’s guest post comes from Greg Skalicky, President, EVERSANA and Faruk Abdullah, President, Professional Services & Chief Business Officer, EVERSANA
Greg and Faruk walk through the marketplace pressures driving Direct-to-Patient commercialization models. They argue that a technology-enabled infrastructure, combined with clinical and reimbursement support specialists, can improve patients' access to new therapies, shorten the time to therapy, and enable better overall clinical outcomes.
A new survey of plan sponsors sheds light on their satisfaction with transparency at large and small pharmacy benefit managers (PBMs).
As you will see, clients remain slightly more satisfied with the perceived transparency of smaller PBMs compared with the Big Three PBMs—CVS Caremark, Express Scripts, and Optum Rx.
However, plan sponsors are dissatisfied with transparency about how both large and small PBMs make money. Smaller PBMs have an edge, but it’s narrower than you might think.
Perhaps PBMs’ clients are unable or unwilling to negotiate better deals, write more effective contracts, and switch to more satisfying relationships. Or maybe they don’t mind the current system, despite the challenges for patients. Some argue that transparency could swoop down to solve this problem. Riddle me this: Should we watch what plan sponsors say, or what they do?
Today’s guest post comes from Angie Franks, Chief Executive Officer of Kalderos.
Angie discusses how the Maximum Fair Price provision of the Inflation Reduction Act of 2022 will challenge providers, pharmacies, and manufacturers. She explains how Kalderos’ Truzo platform could reduce duplicate claims and address compliance issues.
As regular readers of Drug Channels know, U.S. distribution and dispensing channels for prescription drugs are undergoing significant evolution and consolidation as the changing economics of pharmaceuticals challenge conventional business models.
During this period of volatility, the core business model of the Big Three public pharmaceutical distribution companies—Cardinal Health, Cencora, and McKesson—remains intact. Put simply: Buy low, sell high, collect early, and pay late.
But as I explain below, wholesalers continue to position themselves as essential intermediaries by expanding their industry position and strengthening their economic fundamentals.
Read on for five key pricing, pharmacy, provider, and manufacturer trends that are driving the U.S. drug wholesaling industry.
Experts from across the US come together each year at the PBM Contracting Summit to gain innovative and practical contracting strategies, master PBM innovation and design, improve patient care management and rising costs, understand the current legislative issues impacting contract negotiations and more. Join us in Chicago (or virtually) where you’ll benefit from two days of learning, education and networking, and will return to the office having mastered the complex PBM landscape.
You’ll hear from Matthew Gibbs, Pharm.D., Pharmacy Transformation Leader of Blue Shield of California as he leads a comprehensive discussion on the PBM landscape over the last year, and delves into the evolving trends and emerging challenges shaping the current industry today.
Other expert and thought leaders from within the industry are slated to present deep dive sessions, workshops and panels that will answer your most pressing questions:
What are the latest legislative updates and proposed federal bills impacting PBM operations?
What's on the horizon for alternative PBMs? What are the top intricacies of rebate eligibility? What are the market impacts of innovative models such as Mark Cuban's Cost Plus Drugs and Amazon's pharmacy model?
What can be learned from the J&J lawsuit? Review the expansion of data access and the importance of employer's fiduciary duties.
What are the challenges of vertical integration?
How do PBMs manage their contracting processes with plan sponsors to create successful contracts?
What are the most effective strategies for spread pricing and reimbursement models?
What is the best solution to navigate the challenges of the 340B drug pricing program and PBM contracting?
What is the best way to design and optimize benefits for covering GLP-1s?
How can I ensure compliance with ERISA requirements?
What are the latest developments in copay maximizer and accumulator programs?
What market dynamics and barriers are impacting pricing and demand?
What can be learned from the economic landscape of biosimilars and specialty therapeutics?
View the agenda for the PBM Contracting Summit to see the complete picture – the program, speakers, and more, visit www.informaconnect.com/pbm-contracting for further details and to register. Drug Channels readers will save 10% off when they use code 24DRCH10 and register prior to November 8, 2024.*
*Cannot be combined with other offers or used towards a current registration. Cannot be combined with special category rates or other offers. Other restrictions may apply.
The content of Sponsored Posts does not necessarily reflect the views of HMP Omnimedia, LLC, Drug Channels Institute, its parent company, or any of its employees. To find out how you can promote an event on Drug Channels, please contact Paula Fein(paula@DrugChannels.net).
Today’s guest post comes from Timothy Nielsen, Vice President of Customer Success at AssistRx.
Timothy discusses the affordability and patient journey challenges of specialty-lite products for patients, manufacturers, and health care providers. He explains how AssistRx's Advanced Access Anywhere (AAA) solution streamlines processes for specialty-lite products and facilitates enrollment via a digital hub.
Contrary to what you may have heard, the Inflation Reduction Act’s (IRA) inflation rebates for Medicare Part B drugs do not always save money for seniors.
As we document below, a growing share of Part B drugs have inflation-adjusted coinsurance rates that have been increasing, not declining. In many cases, the coinsurance rate declines only briefly before rebounding back to the standard 20% rate. What’s more, these fluctuations have triggered huge jumps in patients’ out-of-pocket obligations for some drugs—even when a drug’s costs were falling.
Chalk off these coinsurance surprises to yet another unintended consequence of the IRA. Seniors who are expecting to see costs drop may find they are instead being taken for a rollercoaster ride.
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This week, I’m rerunning some popular posts while we put the finishing touches on DCI’s new 