- Johnson & Johnson Innovative Medicines gives a peek inside its $43 billion gross-to-net bubble
- Optum Rx joins the private label biosimilar bandwagon
- Biosimilars boom for provider-administered drugs
- Fresh evidence of how copay accumulators hurt patients
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Johnson & Johnson Pricing Transparency Report, Johnson & Johnson Pricing Innovative Medicine
Johnson & Johnson Pricing Innovative Medicine (JJIM) has finally released its annual transparency report. While the report was a bit tardy, it remains the most complete disclosure from any major manufacturer and offers unique insight into JJIM’s gross-to-net bubble. (I reviewed reports from other manufacturers in this article: Gross-to-Net Bubble Update: 2023 Pricing Realities at 10 Top Drugmakers.)
As you can see in the illuminating chart below, JJIM paid $42.8 billion in rebates, discounts, and fees—up 9.5% from the 2022 figure of $39 billion. The 2023 total included $13.4 billion to commercial payers and pharmacy benefit managers (PBMs), $10.2 billion to Medicare and Medicaid, and an astounding $6 billion in 340B discounts to covered entities.
JJIM’s net U.S. sales for 2023 were $31.2 billion. This implies that gross sales were about $74 billion (= $31.2 billion + $42.8 billion) and total gross-to-net discounts were −58%.
There was one subtle change to this year’s transparency report. The company’s average list prices appear to have grown by about 5% in both 2022 and 2023. Last year’s report disclosed that average net prices declined by 3.5% in 2022, but the new report omits the average net price decline for 2023. Hmm.
P.S. Some of us old fogies would appreciate a PDF download that we can squirrel away in our files.
As you can see in the illuminating chart below, JJIM paid $42.8 billion in rebates, discounts, and fees—up 9.5% from the 2022 figure of $39 billion. The 2023 total included $13.4 billion to commercial payers and pharmacy benefit managers (PBMs), $10.2 billion to Medicare and Medicaid, and an astounding $6 billion in 340B discounts to covered entities.
JJIM’s net U.S. sales for 2023 were $31.2 billion. This implies that gross sales were about $74 billion (= $31.2 billion + $42.8 billion) and total gross-to-net discounts were −58%.
There was one subtle change to this year’s transparency report. The company’s average list prices appear to have grown by about 5% in both 2022 and 2023. Last year’s report disclosed that average net prices declined by 3.5% in 2022, but the new report omits the average net price decline for 2023. Hmm.
P.S. Some of us old fogies would appreciate a PDF download that we can squirrel away in our files.
Pharmacy Passages: Formulary Update (August 2024), Optum Rx
Plan sponsors: Golly, CVS Caremark and Express Scripts have confusing and opaque formulary strategies for biosimilars.
Optum Rx: Hold my beer.
That's right, 2025 formularies are about to get even nuttier. Following in the footsteps of its PBM peers, Optum Rx will launch multiple biosimilars via its new Nuvaila private label business:
Optum Rx: Hold my beer.
That's right, 2025 formularies are about to get even nuttier. Following in the footsteps of its PBM peers, Optum Rx will launch multiple biosimilars via its new Nuvaila private label business:
- A low-list-price Humira biosimilar manufactured by Amgen called “Amjevita for Nuvaila.” It will compete with a high-list-price version called “Amjevita for Amgen.”
- A private label Stelara biosimilar called “Wezlana for Nuvaila” that will be available in both high-list and low-list flavors.
[Click to Enlarge]
In Humira Biosimilar Price War Update, I pondered whether the largest PBMs would have popped the gross-to-net bubble for Humira if they hadn’t been able to profit from the switch with Cordavis (CVS Health) and Quallent (Cigna/Express Scripts). Guess we all know the answer.
P.S. In related news, Express Scripts will pop the gross-to-net bubble with a low-list-price Stelara biosimilar. It’s a favorable contrast to its mid-price Humira strategy.
US Commercial Plans Increase Choice Of Biosimilar And Originator Products; Market Net Prices Decrease, Health Affairs
In contrast to pharmacy benefits, formulary barriers continue to fall for provider-administered biosimilars.
This fascinating dive into the Tufts Medical Center Specialty Drug Evidence and Coverage Database examined coverage at 18 commercial health plans with a collective 188 million covered lives. The study examined seven of the most widely utilized provider-administered products that had at least one biosimilar option: Avastin, Epogen/Procrit, Herceptin, Neulasta, Neupogen, Remicade, and Rituxan.
In 2017, reference biologic products were preferred over all biosimilars for 55% of formulary coverage decisions and were co-preferred for a further 30% of decisions. By 2022, the reference product was the sole option for only 8% of plans’ formulary coverage decisions, while one or more biosimilar was preferred over the reference product for 61% of these decisions.
Formulary coverage varied among the plans. For 2022, the frequency at which the 18 payers covered originator products as preferred varied from 3% to 89%. Back in 2019, some argued that we should throw in the towel and just start regulating the biosimilar market. But these data show that competition has allowed this market to fulfill its promise. #NoTowel
For more on how wholesalers are profiting from these developments, see Section 6.4.3. of DCI’s forthcoming 2024-25 Economic Report on Pharmaceutical Wholesalers and Specialty Distributors.
This fascinating dive into the Tufts Medical Center Specialty Drug Evidence and Coverage Database examined coverage at 18 commercial health plans with a collective 188 million covered lives. The study examined seven of the most widely utilized provider-administered products that had at least one biosimilar option: Avastin, Epogen/Procrit, Herceptin, Neulasta, Neupogen, Remicade, and Rituxan.
In 2017, reference biologic products were preferred over all biosimilars for 55% of formulary coverage decisions and were co-preferred for a further 30% of decisions. By 2022, the reference product was the sole option for only 8% of plans’ formulary coverage decisions, while one or more biosimilar was preferred over the reference product for 61% of these decisions.
[Click to Enlarge]
Formulary coverage varied among the plans. For 2022, the frequency at which the 18 payers covered originator products as preferred varied from 3% to 89%. Back in 2019, some argued that we should throw in the towel and just start regulating the biosimilar market. But these data show that competition has allowed this market to fulfill its promise. #NoTowel
For more on how wholesalers are profiting from these developments, see Section 6.4.3. of DCI’s forthcoming 2024-25 Economic Report on Pharmaceutical Wholesalers and Specialty Distributors.
Patient liability, treatment adherence, and treatment persistence associated with state bans of copay accumulator adjustment programs, Journal of Managed Care & Specialty Pharmacy
Who would’ve have thunk it?
“This study found that in states that banned copay accumulator adjustment programs, patients in most months paid 41%-63% less for their medicine. They were also more likely to keep taking their medicine correctly and less likely to stop taking it.”JMCP also published a useful primer on copay accumulators, maximizers, and alternate funding programs, coauthored by 9 (!) academics. Nice to see increased scholarly focus on benefit tools that divert funds away from patients and toward plans and PBMs.
Reflections on My Retirement, Steve Collis
I look forward to seeing what Steve does next, exspecially since the CEOs of drug wholesale companies have made a range of unexpected post-retirement life choices. George Barrett, former CEO of Cardinal Health, is now a professional musician.
P.S. Steve will be joining me for a one-on-one fireside chat at the Drug Channels Leadership Forum next March. I can't wait to hear his perspectives on where the industry has been and where it is going.
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