- California May Pass Legislation to Regulate PBMs (policymed.com)
We have previously written about pharmacy benefit managers and the way states are trying to regulate them through legislation and other means. With just one week left of the California session, it is possible that the state will become the most recent to regulate PBMs...California Assembly Bill 315, simply titled Pharmacy benefit management...was recently...revived with an amendment on August 20, 2018...The legislation, if passed, would require PBMs to be licensed by the California Department of Managed Health Care; require that a PBM exercise a duty of good faith and fair dealing in the performance of its contractual duties to a purchaser, and would require the PBM to disclose to a purchaser any conflict of interest that would interfere with the discharge of that duty; require a PBM to periodically disclose to a purchaser, at their request, certain information such as drug acquisition cost, rebates received from pharmaceutical manufacturers, and rates negotiated with pharmacies; require PBMs to notify pharmacy network providers of certain material contract changes at least 30 days before those changes take effect; prohibit PBMs from including in a contract with a pharmacy network provider provisions that prohibit the provider from informing consumers of alternative medication options or from dispensing a certain amount of prescribed medication; and would also create a toll-free provider line for pharmacies to report any PBMs who are in violation of the law.
- What Does a Drug Cost? It Depends on Where You Live. (nytimes.com)Here are the Most, and Least, Expensive Cities for Prescription Medications (goodrx.com)
A new analysis finds the price of certain drugs varies widely depending on what city they are sold in...Thomas Goetz, the chief of research at GoodRx, said many factors are likely playing a role, like the prevalence in some areas of big-box stores like WalMart and Costco, which sell generic drugs at cheap prices...But that can’t entirely explain what’s going on. Much can still be chalked up to the “drug prices make no sense” theory, he said. Generic drug manufacturers often charge different prices for versions of the same drug, and pharmacies can then mark up the drug in a variety of ways...The study, which looked at 500 commonly used drugs in 30 American cities...differ significantly from coast to coast...
...average cash prices are at pharmacies in five major cities - Paroxetine - Generic for Paxil, used to treat depression
- Birmingham — $50.53
- Boston — $47.34
- Columbus — $20.87
- New York — $73.55
- San Francisco — $53.78
- How Pharmacies Are Confronting Rising Drug Costs (drugtopics.com)
The relentless rise in prescription drug prices is prompting pharmacists to become more proactive in helping patients save money. Community pharmacists have had a front row seat for the tsunami of prescription price hikes that has been building for decades...What has really caused it to bubble up above the surface are the high deductible plans, and also the changes in insurance plan designs [that] are shifting more of the cost burden to consumers…
- Customer Relations Take a Hit
Naturally, pharmacies are bearing the brunt of patient frustrations...J.D. Power 2017 U.S. Pharmacy Study reports “notable declines” in overall customer satisfaction that are driven by cost... - One National Chain Reacts
CVS Pharmacy Rx Savings Finder to help patients save money...tools to patients, prescribers, and pharmacists so they can evaluate prescription drug coverage in real-time and identify lower-cost alternatives...the right drug at the lowest possible cost for patients to ensure they are able to access and stay on the medications they need... - Business Implications
...escalating prescription prices are also causing revenue problems for pharmacies...Zero reimbursements for many generics is common...retroactive DIR fees undermine patients’ access to prescriptions and hinder their own ability to manage their businesses. - Revenue Boosting Options
exploring alternative revenue streams—including chronic care management—and efficiency improvements... - Alternative Revenue Streams
expanding over-the-counter medications and products...offering immunizations, diabetes and cardiovascular education, smoking cessation, and nutrition classes...
- Customer Relations Take a Hit
- FDA chief questions protections on drug rebates, stocks fall (reuters.com)
...Food and Drug Administration chief Scott Gottlieb....questioned whether rebates that drugmakers provide to health insurers should remain protected by federal law, sparking new concerns on Wall Street over efforts to curb drug pricing...Gottlieb was referring to the common practice of pharmaceutical companies setting a high “list price” for a drug, and then lowering the cost for health plans through hefty rebates in exchange for the broadest access to patients. In recent weeks, he has criticized these practices for keeping drug prices high and locking out competitors...“What if we took on this system directly, by having the federal government reexamine the current safe harbor for drug rebates under the Anti-Kickback Statute?”...“Such a step could help restore some semblance of reality to the relationship between list and negotiated prices, and thereby boost affordability and competition.”...The anti-kickback law makes it illegal to pay an incentive for drugs or services that Medicare, Medicaid or other federal healthcare programs cover...
- CVS adopts ICER metrics in shift to value-based drug pricing (biopharmadive.com)
CVS Caremark will use the value-based drug pricing system of the Institute for Clinical and Economic Review to exclude some high-cost drugs from plans...The pharmacy benefit manager will incorporate ICER's quality-adjusted life years measure. If a drug is priced greater than $100,000 per QALY at launch, CVS Caremark will allow its clients to exclude the drug from their plan...CVS is hoping the decision will give PBMs more power in pressuring drug prices lower, especially by targeting their launch prices...PhRMA...supports using "rigorous, objective evidence to guide formulary decision-making”...”At the same time, we strongly oppose misuse of subjective, one-size-fits-all cost effectiveness thresholds to deny patient access to life saving treatment options,"..."As many stakeholders have noted, blunt cost-effectiveness thresholds ignore what individual patient and providers value and conflict with the movement toward personalized, 21st century health care."
- Amazon Buys PillPack: Six Pharmacy and Drug Channel Implications (drugchannels.net)Why Amazon’s Push Into Prescription Drugs Isn’t a Guaranteed Success (nytimes.com)Amazon could start selling discounted meds to cash payers as soon as the PillPack deal closes (cnbc.com)
Amazon has entered the pharmacy business with its acquisition of PillPack, a small mail pharmacy. Consider this move to be the end of the beginning for the pharmacy industry's evolution...The stock prices of pharmacies and pharmacy benefit managers predictably plunged...This is a small first step that will let Amazon begin growing a pharmacy dispensing business...We are still a long, long way from a fundamental restructuring of the complex U.S. drug channel. The incumbents still have opportunities to defend their position, capture value from internet technologies, and streamline distribution...
OBSERVATIONS- Amazon has made a small, partly defensive move into pharmacy dispensing.
- Amazon now has a turnkey platform for disrupting the cash-pay prescription business.
- Amazon can reinvent consumer perceptions of non-store pharmacy dispensing.
- PBMs face the prospect of disruption to their long-favored network strategies.
- Amazon still lacks a specialty pharmacy solution—and may not want one.
- The deal is good news for vertical integration.
- U.S. drug prices hit by insurer tactic against copay assistance: analysis (reuters.com)
A recently adopted tactic by...health plans to limit the financial assistance drugmakers provide directly to consumers for prescription medicines is taking a toll on drug prices, according to a new analysis...Real...drug prices, including discounts and rebates, fell 5.6 percent in the first quarter of this year, compared to a 1.7 percent drop in the same period a year ago, according to...research analyst Richard Evans...He attributed most of the decline to ‘copay accumulator’ programs introduced by pharmacy benefits managers...drugmakers have increasingly offered so-called ‘copay assistance’ cards, similar to a debit card, that consumers can use at the pharmacy counter to reduce their out-of-pocket costs...these payments insulate consumers from the real costs of their drugs and can push them toward more expensive medications when a cheaper option is available...Beginning in January, Express and other pharmacy benefits managers introduced a new ‘copay accumulator’ approach, refusing to allow copay assistance payments to contribute toward a patient’s deductible before insurance kicks in...That has forced drugmakers to either keep paying out-of-pocket costs for a consumer, or risk them ditching a medicine because they can no longer pay for it....
- Las Vegas fares well in prescription drug price comparison (reviewjournal.com)Here are the Most, and Least, Expensive Cities for Prescription Medications (goodrx.com)
Las Vegas ranks near the bottom in many health care categories, but this time it’s a good thing...The prescription drug-tracking website GoodRx rated Las Vegas one of the least-expensive metropolitan areas in the country for out-of-pocket prescription drugs in a new report...The reason for the city’s No. 9 ranking is unclear...Las Vegas’ prices were 9.4 percent below the national average. Columbus, Ohio, had the lowest prices, with drugs costing 21.7 percent below the national figure on average...In some cities, higher cost of living corresponded to higher prices, but not so in Las Vegas, where the Council for Community and Economic Research reports the cost of living to be 2.5 percent above the national average...Leiana Oswald, associate professor of pharmacy practice at Roseman University of Health Sciences in Henderson, said tools like GoodRx can be useful for consumers and pharmacists. She said customers should also get in the habit of asking for coupons at the pharmacy counter, checking for discounts through the drug manufacturer and comparing a drug’s cash price to the cost after insurance...“I think that the best thing that patients can do is to be that squeaky wheel, to ask those questions,” she said.
- Amid Opposition, Rite Aid Issues Shareholder Plea To Vote For Albertsons Deal (forbes.com)
Rite Aid executives issued an unusually lengthy plea for shareholders to vote in favor of its merger with Albertsons amid opposition by some investors who’ve been trying to derail the deal...Before shareholders is a $24 billion merger with grocery store giant Albertsons announced in February that would result in Rite Aid shareholders owning about 30% of the combined new company. The combination of Rite Aid, which operates RediClinic, and Albertsons would create a company with 319 health clinics and 4,345 pharmacies after the merger closes...Some investors were upset that senior executives will be paid retention bonuses even if the deal falls through. Others were upset that Rite Aid isn’t getting a higher price, especially as pharmacy benefit managers are suddenly an acquisition target and shareholders see value in Rite Aid’s PBM, EnvisionRxOptions, which has been growing rapidly...
- Trump’s Drug Pricing Reform Proposals May Be Politically Tepid But Are Sensible Policy (forbes.com)The Trump Drug Pricing Plan: Short Term Reprieve, Long Term Disruption (drugchannels.net)
With HHS Secretary Alex Azar by his side, President Trump...promised that “we are going to see prices go down, and it will be a beautiful thing.” Based upon the actual blueprint, which remains a work in progress, that may well be the case. But if it proves to be so, it will not be because the administration is wielding the metaphorical meat cleaver to cut prices by government edict and risk gutting our biomedical innovation engine...Instead...he appears to...endorse a series of incremental policy and market-based reforms that will eliminate many of the existing incentives that compel drug manufacturers to push list prices ever higher...These relatively modest proposals will not satisfy Democrats who remain fixated on adopting a single payer system where the Federal government can set prices, as is the case in western Europe. But then, it might be good to remember that risk capital and large drug companies are necessary to develop the compounds that are discovered in government and university research laboratories. If we wish to realize the promise of new medicines in treating rare diseases and in harnessing our immune systems to fight cancer, a thoughtful, cautious incrementalism is preferable to the harshness of the meat cleaver.