Glenn Cox’s Post

Pharmacy benefits managers (PBMs)- third party administrators of prescription drug programs- have gained scrutiny in the US over the years. Independant pharmacies raised the alarm about "unfair" tactics used by PBMs to monopolize the industry, such as underpaying for prescriptions that are filled and claw-backs to reimbursements which threaten to put them out of business. The FTC announced plans this week to sue three of the largest PBMs over practices that they allege contribute to inflated drug prices. The PBMs targeted controlled 79% of US pharmacy benefit management in 2022 (according to the data platform Statista) when the initial investigation began : -Caremark (CVS Health) - 33% -Express Scripts (Cigna) - 24% -Optum RX (United Healthcare Group) - 22% The call for more transparency into their operations comes as PBMs blame manufacturers for higher drug prices and drug manufacturers justify increases blaming their higher list prices on rebating and fees collected by the PBMs.

The US Federal Trade Commission (#FTC) released a report alleging that the three largest #pharmacy benefit managers (#PBMs) – #Optum, #CVS #Caremark, and #ExpressScripts – significantly inflated drug prices, generating an estimated $7.3 billion in excess revenue from 2017 to 2022. This price inflation involved markups of hundreds or thousands of percent on certain medications, particularly at the PBMs' own affiliated #pharmacies, and involved steering patients towards more expensive options and utilizing spread pricing, where they bill plan sponsors more than they reimburse pharmacies. The FTC's findings, which include a significant increase in patient out-of-pocket costs, led to a lawsuit filed in September accusing the PBMs of manipulating insulin prices, while the PBMs themselves dispute the report's methodology and findings, arguing that their actions lower overall drug costs for patients.

Update: We dug deeper into CMS' first round of negotiated drug prices after the initial sprint to respond to the announcement. In this Health Affairs Forefront article, we examine what the numbers can tell us about prescription drug competition and payer negotiating leverage in the US.

Great Article on the Problems in the IRA “Year 2” Guidance—I’m Quoted Nyah Phengsitthy’s article lays out the concerns about #CMS’ “year 2” #InflationReductionAct guidance, with an emphasis on the duplicate discount and other consequences that will flow from making #340B claims identification “voluntary”. Quoting me about #CMS’ broader failure to address and take responsibility for crucial aspects of making a #Medicare Transaction Facilitator actually work: “But the guidance ‘pulls back from significant portions of what needs to be done and … dumps those critical activities on #manufacturers, #coveredentities, #contractpharmacies, and the rest of the players in the distribution channel,’ Sarraille said. ‘That’s really unfortunate. It may suggest that the start of this program might be very bumpy, very rocky.’” Here’s hoping my usual pessimism doesn’t prove clairvoyant here. If you are a manufacturer with a selected drug, you need a technology solution of your own—and fast. #lifesciences #drug pricing #MedicareAdvantage #PartD #pharmaceuticals #pharmacies #drugs U.S. Department of Health and Human Services (HHS)Centers for Medicare & Medicaid Services

Prescription drug costs continue to have a greater impact on healthcare spending for businesses. At the same time, the article below highlights two key beliefs of individuals: 1) Advancements in Rx are improving lives. 2) The majority of people are worried about their ability to afford their medications. The importance of these medications, combined with the financial impact to businesses and employees alike call for a different approach to pharmacy benefit management.

I highly recommend watching this discussion in its entirety. This congressional debate delves into one of the most complex industries in the world—the role of pharmacy benefit managers (PBMs) in the United States' pharmaceutical supply chain. The discussion covers key aspects such as distribution and network access, incentivization structures, pharma contracting, and the reimbursement framework that underpin the U.S. healthcare system. It offers valuable insights into how PBMs influence drug pricing, access, and overall healthcare costs. The congressional hearing featured executive leadership from the three largest PBMs: Express Scripts by Evernorth, OptumRx (Optum), and CVS Caremark. 🔸 𝐄𝐱𝐩𝐫𝐞𝐬𝐬 𝐒𝐜𝐫𝐢𝐩𝐭𝐬 is a subsidiary of Cigna Healthcare, a major health services company with approximately 70,000 employees. As a PBM, Express Scripts manages prescription drug benefits for health plans, aiming to negotiate drug prices, control costs, and improve patient access to necessary medications. 🔸 𝐎𝐩𝐭𝐮𝐦𝐑𝐱 is part of UnitedHealth Group, a leading diversified healthcare company with around 400,000 employees. OptumRx provides pharmacy care services that are integrated with UnitedHealth Group's broader healthcare offerings, focusing on managing medication benefits, enhancing clinical outcomes, and ensuring cost efficiency. 🔸 𝐂𝐕𝐒 𝐂𝐚𝐫𝐞𝐦𝐚𝐫𝐤 operates under CVS Health, a healthcare innovation company with approximately 300,000 employees. CVS Caremark administers prescription drug plans for various health insurance plans, working to optimize the value and effectiveness of pharmacy benefits while supporting patient health. These PBMs play crucial roles in the U.S. healthcare system, impacting drug pricing, availability, and the overall management of pharmacy benefits. 𝐓𝐡𝐞𝐬𝐞 𝐭𝐡𝐫𝐞𝐞 𝐏𝐁𝐌𝐬 𝐚𝐜𝐜𝐨𝐮𝐧𝐭 𝐟𝐨𝐫 𝟖𝟎% 𝐨𝐟 𝐭𝐡𝐞 𝐩𝐫𝐞𝐬𝐜𝐫𝐢𝐩𝐭𝐢𝐨𝐧𝐬 𝐝𝐢𝐬𝐩𝐞𝐧𝐬𝐞𝐝 𝐢𝐧 𝐭𝐡𝐞 𝐔𝐒. 🔗 𝐖𝐚𝐭𝐜𝐡 𝐭𝐡𝐞 𝐝𝐢𝐬𝐜𝐮𝐬𝐬𝐢𝐨𝐧 𝐡𝐞𝐫𝐞: https://lnkd.in/gc-Xefg5 #PharmaceuticalIndustry #PharmaSupplyChain #HealthcareReimbursement

📢 Key Insights From the HHS Prescription Drug Cost Report The HHS’ latest report highlights critical data on prescription drug spending, pricing trends, and their impact on premiums. Key findings include: 💊 Rising Prices: Over 4,200 drug products saw list price increases from 2022 to 2023, averaging 15.2%, with 46% exceeding inflation. 📉 Rebates: Rebates accounted for 20%-22% of gross drug spending in private plans and 53% in Medicaid. 📊 Coverage: 143M Americans had private prescription drug coverage in 2020. The Prescription Drug Data Collection (RxDC) initiative under the CAA enhances transparency in this critical sector. As we navigate these trends, collaboration between policymakers, insurers, and consumers is vital for meaningful reform. #HealthcareTransparency #PrescriptionDrugPricing #HealthPolicy #DataAnalytics

WSJ: FTC to sue PBMs over drug pricing tactics It is about time someone stop these goliaths who contribute to overpriced prescriptions while contributing to the demise of the independent pharmacies! Just one day after issuing a report blasting pharmacy benefit managers for their business practices and focus on consolidation and vertical integration, the Federal Trade Commission (FTC) is reportedly suing CVS Caremark, Express Scripts and OptumRx for directing patients toward more expensive drugs. Each PBM is integrated with a national health insurer. Collectively, they handle around 80% of the country’s prescriptions and negotiate discounts with drug manufacturers “Vertically integrated PBMs appear to have the ability and incentive to prefer their own affiliated businesses, creating conflicts of interest that can disadvantage unaffiliated pharmacies and increase prescription drug costs,” the FTC said in a news release July 9. “PBMs may be steering patients to their affiliated pharmacies and away from smaller, independent pharmacies.” https://lnkd.in/eNkPSWsE #PBM, #stereringpatients, #drivingdrugpriceshigher, #profitsfirst

FTC finds top 3 PBMs inflated drug prices by $7.3B The Federal Trade Commission released a second interim report showing that the three largest pharmacy benefit managers — CVS Caremark, Cigna's #ExpressScripts and UnitedHealth's Optum Rx — marked up specialty generic drug prices, generating over $7.3 billion in excessive revenues from 2017 to 2022. #FTC #PBM #Pharmacy #Insurance Becker's Healthcare Alexandra Murphy https://lnkd.in/d66sJ7tC