Before you overturn any cars, please enjoy this month’s playbook of articles, intercepted for you from the Drug Channels gridiron:
- Touchdown! How Mark Cuban would quarterback the U.S. healthcare system
- Trick Play: Patients and plans get sacked by a gross spending-to-net bubble
- Defensive line: A comeback for pharmacy students
- Offensive line: Apexus dances in the end zone, while a 340B hospital tackles a patient
P.S. I recently passed 60,000 LinkedIn followers. If you haven’t done so already, follow along for my daily links to neat stuff along with thoughtful and provocative commentary from the DCI community.
A Few Words on Healthcare, Blog Maverick: The Mark Cuban Weblog
Look who’s blogging!
In this post on his eponymous blog, Mark Cuban outlines a radical, market-driven revolution for U.S. healthcare.
It’s a provocative approach that shifts payment away from the traditional insurance model. Instead, he proposes a radically transparent system filled with informed, cash-paying patients who can leverage competition among providers. A much leaner insurance system will then pay for care that patients can’t afford.
His ideas will cause central planners' heads to explode. Worth reading.
You may say he’s a dreamer, but he’s not the only one.
In this post on his eponymous blog, Mark Cuban outlines a radical, market-driven revolution for U.S. healthcare.
It’s a provocative approach that shifts payment away from the traditional insurance model. Instead, he proposes a radically transparent system filled with informed, cash-paying patients who can leverage competition among providers. A much leaner insurance system will then pay for care that patients can’t afford.
His ideas will cause central planners' heads to explode. Worth reading.
You may say he’s a dreamer, but he’s not the only one.
The Pharmaceutical Supply Chain, 2013–2023, Berkeley Research Group
Here’s a huge problem that Mark Cuban’s solution could help solve. Per this great new analysis from Berkeley Research Group (BRG):
As you can see, the gross spending-to-net bubble has inflated, from $89 billion in 2013 to $335 billion in 2023. (Note that DCI’s gross-to-net bubble uses manufacturers’ gross and net revenues, while BRG’s gross spending-to-net bubble compares gross spending by first- and third-party payers to manufacturers’ net revenues.)
All in all, the report provides further evidence of the massive distortions in our system. Pharmaceuticals remains the only part of the U.S. healthcare system in which the difference between list and net prices is monetized as rebates and redistributed via intermediaries to payers. This bubble reflects—and drives—patients’ affordability problems, intermediaries' warped incentives, and politicians’ misunderstandings of U.S. drug prices.
- Pharmaceutical manufacturers received only half of what plan sponsors and payers spent on brand-name and generic drugs.
- For 2023, Drug channel entities’ gross margins plus all rebates and discounts totaled $399 billion.
[Click to Enlarge]
As you can see, the gross spending-to-net bubble has inflated, from $89 billion in 2013 to $335 billion in 2023. (Note that DCI’s gross-to-net bubble uses manufacturers’ gross and net revenues, while BRG’s gross spending-to-net bubble compares gross spending by first- and third-party payers to manufacturers’ net revenues.)
All in all, the report provides further evidence of the massive distortions in our system. Pharmaceuticals remains the only part of the U.S. healthcare system in which the difference between list and net prices is monetized as rebates and redistributed via intermediaries to payers. This bubble reflects—and drives—patients’ affordability problems, intermediaries' warped incentives, and politicians’ misunderstandings of U.S. drug prices.
2023-2024 PharmCAS Applicant Data Report, American Association of Colleges of Pharmacy
Good news, everyone! More people want to be pharmacists. Over the past two years, the total number of pharmacy school applicants has grown by 9%. It’s a notable turnaround for a career that continues to face many challenges. Alas, that figure is still down −31% from its 2012-13 peak.
Here are the latest data from the American Association of Colleges of Pharmacy:
For the latest job info, check out Pharmacist Salaries and Employment in 2023: The Grass Keeps Getting Greener in Hospitals.
Here are the latest data from the American Association of Colleges of Pharmacy:
[Click to Enlarge]
For the latest job info, check out Pharmacist Salaries and Employment in 2023: The Grass Keeps Getting Greener in Hospitals.
How a Company Makes Millions Off a Hospital Program Meant to Help the Poor, The New York Times
This month, The New York Times took on the out-of-control 340B Drug Pricing Program (again).
This article focuses on Apexus, which manages the 340B prime vendor program. Per the NYT story, Apexus has a complex and highly-profitable role in helping the skyrocketing 340B program expand even further. Apexus reportedly has revenues of $225 million and 80% gross margins.
The story contains terrible examples of hospital profiteering at the expense of patients. The story of Virginia King, a breast cancer patient who was treated at a 340B covered entity, is especially disturbing:
This article focuses on Apexus, which manages the 340B prime vendor program. Per the NYT story, Apexus has a complex and highly-profitable role in helping the skyrocketing 340B program expand even further. Apexus reportedly has revenues of $225 million and 80% gross margins.
The story contains terrible examples of hospital profiteering at the expense of patients. The story of Virginia King, a breast cancer patient who was treated at a 340B covered entity, is especially disturbing:
Soon after being diagnosed with metastatic breast cancer, Virginia King sat in an outpatient clinic in Santa Fe, N.M., while a nurse injected her with a powerful drug to slow damage to her spine, where the disease had spread.P.S. I also recommend Insulin Prices Dropped. But Some Poor Patients Are Paying More. It’s another insightful 340B-related article about the immutable law of unintended consequences. In this case, health clinics—which are usually 340B's good guys—got hurt when Congress uncapped Medicaid rebates. Manufacturers rationally cut list prices to avoid the nonsensical situation of having to pay the government for the use of their products. This removed the 340B spread, which reduced funding for actual safety net providers.
Even though the drug had a list price of about $2,700, the hospital that owned the cancer center billed Mrs. King’s insurance company $22,700. Her insurer paid $10,000, but the hospital wanted more...
After The Times asked about the bill last month, a spokeswoman for Christus St. Vincent said the charge was “a misunderstanding and has been resolved,” adding that the drug program helped the hospital provide charity care and reinvest in cancer treatment and primary care.
Mrs. King switched to a free-standing oncology clinic that does not qualify for the federal drug program. That clinic billed her insurance $8,000 for the injection, about a third of what Christus St. Vincent had charged. Her responsibility was nothing.
Just another day for Antonio!!, Pharmacy Podcast
Here’s a fun video of my friend Antonio Ciaccia from 46Brooklyn as Super Mario.
Antonio will be on stage at the Drug Channels Leadership Forum in the “Crossfire: PBMs and Pharmacies” session. He will be debating Matt Kalgren, VP of Pricing Strategy & Technology at CVS Health, in a session moderated by Luke Greenwalt of IQVIA. I suspect this conversation will make football seem tame!
Antonio will be on stage at the Drug Channels Leadership Forum in the “Crossfire: PBMs and Pharmacies” session. He will be debating Matt Kalgren, VP of Pricing Strategy & Technology at CVS Health, in a session moderated by Luke Greenwalt of IQVIA. I suspect this conversation will make football seem tame!
Just another day for Antonio!! @A_Ciaccia @46brooklyndata #PBMReform 💥 @3AxisAdvisors pic.twitter.com/4lRUSXmGOU
— Pharmacy Podcast Network (@PharmacyPodcast) January 24, 2025
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