- How Hospitals and PBMs Profit—and Patients Lose—From 340B Contract Pharmacies (drugchannels.net)
The stunning growth of specialty pharmacies in the 340B Drug Pricing Program has accelerated a troubling trend: Patients covered by commercial insurance and Medicare Part D are footing the bill for 340B savings...That's the uncomfortable reality of the 340B program’s hidden prescription economics...Whenever a prescription is eligible for 340B pricing, an insured patient could pay thousands of dollars out of pocket—even as the 340B hospital and its contract pharmacy generate substantial profits. Meanwhile, private health plans and Medicare pay full price for drugs that are sold to 340B covered entities at deep discounts, further subsidizing hospitals and PBM-owned specialty pharmacies...340B Health, which lobbies for hospitals that participate in the 340B Drug Pricing Program, argues that the program “does not cost taxpayers any money.” Be wary of this misleading half-truth. The harsh reality is that patients and payers are funding the savings that flow back to 340B covered entities and their contract pharmacies...This fundamental unfairness is discussed rarely if ever. Rather than touting how hospitals spend their 340B savings, it’s time to start asking where those savings come from...READ MORE
- ICYMI: Pharmacy benefit managers increasingly exclude medicines from formularies, restricting patient access (catalyst.phrma.org)
...CVS Caremark and Express Scripts, have once again increased the number of medicines on their standard formulary exclusion lists...As these PBMs control over half of the market combined, these changes have widespread implications for patients across the country...PBMs leverage their vast purchasing power and ability to exclude medicines from their standard formularies to negotiate large rebates and discounts from biopharmaceutical companies. PBMs then compel insurers and employers to use standard formularies by reducing the rebates offered to those who choose to adopt custom formularies without exclusions, which increases costs to the plan sponsor. In 2019, manufacturer rebates, discounts, fees and other price concessions grew to $175 billion. However, these rebates and discounts are typically not shared with patients at the point-of-sale...formulary exclusions can create additional barriers for patients who may experience challenges accessing prescribed treatments. These barriers to access can lead to health complications resulting from delayed treatment initiation or treatment disruption...READ MORE
- New Reports Show Skyrocketing DIR Fees (drugtopics.com)
Two new reports quantify the problem that community pharmacists have experienced firsthand: direct and indirect remuneration fees are skyrocketing, causing some pharmacies to go out of business...DIR fees have skyrocketed by 1600% in the last 5 years, totaling $8.5 billion since 2013, according to a new policy analysis...Pharmacy benefit managers are profiting from DIR fees in excess of 500% per prescription, compared with the average PBM administration fee...A loophole in the program allows health plans and PBMs to pocket an excessive amount of pharmacy DIR fees rather than offset prescription costs for seniors...READ MORE
- Arkansas’ case against pharmacy benefit managers to be heard by U.S. Supreme Court (talkbusiness.net)
The U.S. Supreme Court will hear a case brought by Arkansas Attorney General Leslie Rutledge against the pharmacy benefit management (PBM) industry…PBMs act as middlemen between health insurance companies and pharmacies...pharmacies have complained that PBMs have been reimbursing them below their cost to acquire a drug...U.S. Solicitor General Noel Francisco recommended Dec. 5 that the Arkansas case – Rutledge v. Pharmaceutical Care Management Association...be heard by the U.S. Supreme Court. Rutledge has argued that more than 16% of rural pharmacies closed in recent years due to declining PBM payments on generic prescriptions causing Arkansans to be unable to receive necessary medications...READ MORE
- FiercePharmaPolitics—States still exploring drug pricing despite congressional gridlock (fiercepharma.com)
Drug pricing legislation hasn’t gained any steam in Congress lately, but legislatures in dozens of states are chugging ahead...States nationwide are advancing bills focused on numerous topics, a new analysis from Deloitte found. Legislation to regulate pharmacy benefit managers is the most common... while many states have passed—or are considering—measures such as transparency requirements for price increases, importation, value-based contracting and more...Overall, Deloitte found that state legislation targeting drug price transparency and PBMs—not importation or other measures—is affecting companies the most right now...READ MORE
- Copay Maximizers Are Displacing Accumulators—But CMS Ignores How Payers Leverage Patient Support (drugchannels.net)
Last week, the Centers for Medicare and Medicaid Services released its final Notice of Benefit and Payment Parameters for the 2021 benefit year...This final rule permits insurers to exclude the value of a pharmaceutical manufacturer’s copay support program from a patient’s annual deductible and out-of-pocket maximum obligations...Translation: CMS has confirmed that insurers have the option to use copay accumulator adjustment for their pharmacy benefit programs...Patients on specialty drugs lose big from accumulators, while plans profit from the lower spending that results. Consequently, copay maximizers have emerged as a more patient-friendly alternative to accumulators...Plan sponsors are publicly denouncing copay support programs—while they’re privately embracing them. CMS’s final rule ignores the troubling reality behind maximizers and accumulators: They encourage plans to use pharmacy benefit deductibles as a scheme that allows payers—not patients—to reap the greatest benefits from a manufacturer’s patient support program...READ MORE
- Safety Net Providers Oppose 2-Tier Drug Pricing Policy (pharmacytimes.com)
Safety net providers are pushing back on the growing use of “2-tiered” policies among payers and pharmacy benefit managers under the 340B Drug Pricing Program that provide lower reimbursement rates for 340B-covered entities compared with non-340B entities...The practice has been challenged in court, finding its way to state legislatures through safety net providers who argue the practice is impacting their ability to serve more patients and offer comprehensive services…HHS has declined to intervene on the issue of 2-tier pricing under the 340B program, with both the Centers for Medicare and Medicaid Services and the Health Resources and Services Administration suggesting that they do not have authority to regulate this practice...READ MORE
- Third drug pricing report analyzes rising costs of diabetes, asthma medication (thenevadaindependent.com)
Nearly one in five diabetes drugs and one in 20 asthma drugs experienced a significant price increase in the past year or two, with average one-year increases about 11.2 percent and 19.3 percent, respectively, according to the third annual drug pricing report released by the Nevada Department of Health and Human Services last week...The state identified 117 essential diabetes drugs and 13 essential asthma medications that had a significant price increase over the previous one or two years, meaning that their costs increased by more than the rate of medical inflation. Manufacturers attributed the price increases to a number of factors, including changes in marketplace dynamics, research and development and manufacturing cost...the findings of the report continued to be consistent with the results of the first two diabetes drug pricing reports...Here are some of the key findings of the report:...READ MORE
- Amid COVID-19, Bipartisan Letter Calls for Pharmacy DIR Reform As Part of Relief (drugtopics.com)
A bipartisan letter has urged Congress to consider including provisions permanently prohibiting pharmacy direct and indirect remuneration (DIR) clawbacks by pharmacy benefits managers (PBMs) in future coronavirus relief packages...The published letter cited increased demand and existing financial strain being amplified during the current pandemic as reasons for the bipartisan push for pharmacy DIR reform...The majority of neighborhood pharmacies are already experiencing negative cash flow issues and, for their efforts to help through this pandemic, will get a big bill months from now as PBMs come calling for DIR fees. Eliminating these fees and reining in PBMs has never been more vital if pharmacies are to continue operating now and when this emergency passes...READ MORE
- Express Scripts vs. CVS Health: Five Lessons From the 2020 Formulary Exclusions and Some Thoughts on Patient Impact (drugchannels.net)
For 2020, the two largest pharmacy benefit managers —Express Scripts and the Caremark business of CVS Health—have again increased the number of drugs they have excluded from their standard formularies. The 2020 formulary exclusion lists are available below for your downloading pleasure...key takeaways from the 2020 lists:
- The biggest PBMs have expanded exclusions.
- PBMs are refining their formulary management of crucial specialty categories.
- Indication-based formularies for inflammatory conditions are now routine.
- PBMs are slowly adopting provider-administered biosimilars on their pharmacy benefit formularies.
- Express Scripts and CVS Caremark both made patient-unfriendly exclusions in the Hepatitis C category...READ MORE