- New York takes drug pricing into its own hands with new clampdown (fiercepharma.com)
New York Governor Andrew Cuomo has...unveiled a first-of-a-kind proposal to curb “exorbitant” prescription prices in the Empire State...New York will create a “review board” to determine the “fair price” for certain expensive drugs under the plan...and then the state will mandate that Medicaid won’t pay more than that amount for its purchases. When a company charges Medicaid more than the board’s set price, it’ll owe a “rebate for any amount” in excess...The proposal would also impact private markets. If a pharma company sells into the state at a price higher than the board’s set amount, that sale will be hit with a surcharge; the government will collect that money and reallocate it “back to the insurance providers to reduce the cost of insurance.”…Lastly, Cuomo's proposal includes new restrictions on pharmacy benefit managers, forcing them to register with the state and disclose “financial incentives or benefits for promoting the use of certain drugs, as well as other financial arrangements affecting customers,”...Then, under the plan, PBMs must have a license beginning in 2019 and the state could revoke those licenses for “deceptive, unfair, or abusive business practices.”...
- Drug Distributors Still Benefiting from Drug Price Inflation but Face Major Profit Challenges, Says New Drug Channels Institute Study (drugchannelsinstitute.com)
Drug Channels Institute...released its...in-depth analysis of the highly dynamic prescription drug distribution industry...2016–17 Economic Report on Pharmaceutical Wholesalers and Specialty Distributors reveals how list price increases of brand-name drugs are boosting the industry’s revenues, even as changes in the U.S. healthcare system threaten wholesalers’ profits...We project that U.S. drug distribution revenues at the Big Three public wholesalers—AmerisourceBergen, Cardinal Health, and McKesson—will exceed $400 billion in 2016...But any change in drug price inflation rates or in manufacturers’ rebate strategy will be very negative for wholesalers’ future revenues and profits...Consolidation among pharmacies and hospitals is making it difficult for wholesalers to capture value and profits from the booming specialty drug market...And contrary to many people’s expectations, specialty biosimilar drugs seem poised to deliver only minimal incremental profits for wholesalers...
- Express Scripts bars new launches from Lilly, Merck and shuts out Novo for 2017 (fiercepharma.com)
For the third year in a row, Express Scripts unveiled a new national formulary excluding dozens of drugs. And for the third year in a row, a short list of winners and losers comprises some of Big Pharma’s biggest launches...The list of excluded meds--85 for 2017--covers many of the same brand names as before. For instance, Novo Nordisk’s blockbuster GLP-1 diabetes drug Victoza and two of its top-selling insulins remain barred, as Express Scripts favors Eli Lilly’s diabetes range--and most likely, Lilly’s discounts. AbbVie’s hepatitis C cocktails Viekira Pak and Technivie remain the chosen therapies in that field, with Gilead Sciences' first-to-market meds Harvoni and Sovaldi out in the cold...Express Scripts and its biggest pharmacy benefits rival, CVS Health, started the exclusionary formulary trend a few years ago by kicking off a handful of meds that they saw as too costly and easily replaced...Express Scripts continued its tradition of punishing drugmakers that have pushed through big price hikes, used co-pay discount cards to hawk me-too meds, and employed other strategies the PBM considers no-nos.
- U.S. probes contracts between drugmakers, pharmacy benefit managers (reuters.com)
The U.S. Attorney's Office...is investigating contracts between drugmakers and companies that manage prescription benefits...Federal prosecutors have approached at least three companies, including Johnson & Johnson, Merck & Co and Endo International Plc, demanding information about their contracts with pharmacy benefit managers...Pharmacy benefit managers...which administer drug benefits for employers and health plans and also run large mail-order pharmacies, have been challenging the rising cost of new medications...When drugs are knocked off their formularies, patients may have to pay full price for them. PBMs often keep or dump a product depending on whether they can obtain favorable pricing.
- DOJ turns tables on Express Scripts, demands info on pharma deals (fiercepharma.com)
Express Scripts disclosed this week that the U.S. Attorney’s offices in New York and Massachusetts had demanded information about two different issues: financial ties with pharma companies, and relationships among drugmakers, patient assistance programs and the specialty pharmacies that fill prescriptions...Specifically, the federal prosecutors in New York want information about money changing hands between Express Scripts and pharma companies. That would include rebates that drugmakers pay to win favorable reimbursement deals for their products...The newly disclosed Express Scripts probes aren’t the first DOJ demands for information about PBM-pharma relationships. In a series of financial filings in May, it became clear that the DOJ was looking for information across the industry. Johnson & Johnson, Merck & Co. and Endo International all said they were being asked for info...secrecy could be coming to an end. Politicians and patient advocates are calling for more transparency from PBMs and drugmakers alike, and obviously, the DOJ is doing the same.
- Walgreens Will Divest Up To 1,000 Stores To Win Rite Aid Deal (forbes.com)
Walgreens Boots Alliance said U.S. antitrust regulators are requiring a divestiture of between 500 and 1,000 retail stores if its acquisition of Rite Aid will be approved...In the Walgreens-Rite Aid deal, it’s the Federal Trade Commission that is evaluating the transaction and demanding divestitures if the deal is going to win approval...Despite the large divestiture of stores, Walgreens expects the deal to still close in the second half of this year leaving the company with more than 11,700 U.S. stores. Walgreens has 8,200 U.S. stores and Rite Aid has 4,500. Even a divestiture of up to 1,000 stores would make Walgreens larger than CVS Health and its 9,600 pharmacies ...Walgreens chief executive officer Stefano Pessina has vowed to be a consolidator in a U.S. market he sees as facing more government control of pricing thanks in part to broader health coverage under the Affordable Care Act. The U.S. also has a growing population of aging baby boomers gaining Medicare coverage.
- Pharmacy benefit managers are restricting access to lots of drugs next year (statnews.com)The ‘gouge factor’: Big companies want transparency in drug price negotiations (statnews.com)
In the latest bid to control prescription drug spending, the nation’s largest pharmacy benefits managers are again excluding dozens of medicines from their lists of products that are covered by health insurance…Express Scripts notified its customers that next year, 85 medicines will be excluded from its national formulary, and, as a result, the PBM hopes to recognize about $1.8 billion in savings, up from $1.3 billion this year. The number of excluded medicines, by the way, is down slightly from the 88 prescription drugs that were excluded from its 2016 formulary...CVS Health released its own 2017 formulary that will exclude another 35 medicines, including 10 that were called "hyperinflationary." As a result, CVS is now excluding a total of 131 medicines and boasts such moves have saved more than $9 billion over the last five years…Recently, a group of two dozen of the largest names in Corporate America — including Macy’s, Coca-Cola and American Express — formed an alliance (Health Transformation Alliance) to find ways to lower health care costs. One notion they are exploring is to change the way PBMs are paid due to concerns that the rebates the PBMs collect from drug makers on behalf of clients are not always passed along. The PBMs have disputed this argument.
- Treat pharma as a utility, and 10 other ways states can lower drug prices (statnews.com)
...a group of state health policy makers is offering some novel — and also some familiar — suggestions...These include regulating the pharmaceutical industry as a utility, allowing states to operate as pharmacy benefit managers and waiving some provisions of the Medicaid program...the National Academy for State Health Policy also recommends that states pursue laws that require more transparency from drug makers. And the organization floated some timeworn proposals, such as importing medicines from Canada and prosecuting drug makers for violating consumer protection laws that protect against predatory pricing monopolies..."The proposals in this paper require more dialogue, debate, development, and experimentation. These policy proposals may not be appropriate for all states or agencies, nor for every pharmaceutical product," the working group wrote. "But states need to act and this paper presents a toolbox of options to consider."... the Pharmaceutical Research & Manufacturers of America, the industry trade group. A spokeswoman wrote us to say that "many of the solutions proposed by the Work Group would harm patients and limit their access to life-saving treatments. We hope to begin a dialogue with the National Academy for State Health Policy on solutions that will help states better manage and predict costs while preserving patient access...
- Why the Walgreens/Prime Deal Could Transform the PBM Industry (drugchannels.net)
...Walgreens Boots Alliance and Prime Therapeutics rolled out a highly innovative partnership. It could have wide-ranging implications...This novel union aligns a pharmacy benefit manager, retail pharmacy chain, and health plans via joint ownership of a new mail and specialty pharmacy company. If executed properly, it will be a best-of-breed business model that could reshape the PBM and pharmacy industries. For manufacturers, organized customer management just got even more complicated...The new business could also pose a serious challenge to pure-play PBMs that lack a health insurer partner or an economically-aligned retail dispensing channel…
- Anthem, Express Scripts Face Legal Challenge Over Prescription Drug Prices (realclearhealth.com)Anthem sues Express Scripts for $15 billion over drug pricing (modernhealthcare.com)
Anthem and its pharmacy manager Express Scripts overcharged patients with job-based insurance for prescription drugs, alleges a lawsuit that seeks class action status for what could be tens of thousands of Americans...the latest wrinkle in a battle that has already pitted the major national insurer and its pharmacy benefit manager against each other in dueling legal actions...The case alleges that insured workers paid too much because Express Scripts charged "above competitive pricing levels" and Anthem, in effect, allowed those higher prices...Those actions...violate the firms’ responsibilities under a 1974 federal benefits law called the Employee Retirement Income Security Act...This action seeks to recover losses suffered by the plaintiffs…who overpaid and continue to overpay for the portions of the costs of prescription drugs…they are responsible for paying as plan participants," says the lawsuit, filed as Burnett v. Express Scripts and Anthem.