Rajiv Leventhal’s Post

"PBMs contend that manufacturers are responsible for high drug prices, while drugmakers say rebates and fees collected by those middlemen force them to increase list prices for products." The #gridlock that is American #healthcare. If everyone points the finger at each other, then it's everyone's fault yet it's no one's fault. Two things can be true at once. Let's break this down: 1. Are manufacturers responsible for setting the list price? Yes. This allows "it's not me, it's them" positional statement by the #PBMs in blaming manufacturers. 2. Do increased PBM fees and #rebates force the hand of manufacturers to raise list prices? Yes. There have been numerous studies and disclosures, particularly with insulin, where manufacturers have disclosed that, while their list price has steadily increased, their net price has actually decreased. 2a. Why would a manufacturer HAVE to increase their drug price to pay a higher fee instead of just providing a deeper discount on an existing price? The answer lies with Medicaid Best Price regulation. CMS requires Medicaid to receive the best price, and for many drugs, the "net best price" after federally mandated rebates and supplemental rebates is already close to the ceiling. It's not mathematically possible for many manufacturers to provide deeper discounts without raising a list price. So, in the face of finding a way to divy up more money to the Godfather or be excluded from the formulary, the incentive is to "play the game" by increasing the list price, make less money on net basis, and pay the ransom in exchange for the coveted preferred formulary status. If you don’t play the game, you'll be on the sidelines of the formulary with minimal market share until next year. This allows the manufacturer to say "they were forced" to raise their list price. This is The Game.

Will Trump cut out PBM's? Time will tell. What’s your take on reforming drug pricing? Let us know! ⬇️ https://lnkd.in/e3h6hs4k #wefixyourhealthcare #HealthcareReform #DrugPricing #TransparencyMatters

Disfavoring Generics: A Point of PBM and #340B Consensus Take a look at Brian Reid insightful post (in the comments) discussing PBMs’ perverse incentive to not place generics on a generic copay tier. In our rebate crazy world, the $ to be made from high list/high rebate drugs leads PBMs to force patients to pay higher copays on generic drugs drugs as an engine of PBM and affiliated plan profitering. What I’d add here is that 340B covered entities have the same incentive. Disafavrong generics is one of the places where PBMs and 340B covered entities push seamlessly in the same direction. The PBMs create formularies and utilization management hurdles that favor high list/high rebate drugs over generic equivalents, and 340B covered entities often switch patients to those same drugs, a task made easier by the PBM formularies and UM. This famous (infamous?) slide from a 340B conference back in the day makes the point with brutal clarity. From a 340B profit perspective, generics are the “rotten egg” and branded versions of the same drug are the “golden egg”. All of this highlights the concerns about how IRA Medicare fair prices may go terribly astray. The natural play for both PBMs and 340B covered entities in the face of MFPs is to move patients from those drugs to high list/high rebate alternatives. Two rowers rowing in unison. At the last 340B Health conference I attended, I heard multiple 340B representatives say, quite openly, that switching patients from MFP drugs to high list/high rebate alternatives was, in fact, their “game plan”. Ugh. #lifescienses #biotech #genericdrugs #pharmacies #pharmacy #pharmacists #PBM #PBMs #managedcare #coveredentities #formularies #formulary #UM #pharmaceuticals #drugs #medications #meds #IRA #InflationReductionAct #Medicare #PartD #MedicareAdvantage #generics #biosimilars #biosims Health Resources and Services Administration (HRSAgov), HHS Centers for Medicare & Medicaid Services U.S. Department of Health and Human Services (HHS) #oig #doj

US prescription drug costs have risen by 37% since 2014, far exceeding the rate of inflation and resulting in higher out-of-pocket costs for Americans, according to GoodRx's prescription drug tracker. The average American currently pays $16.26 out-of-pocket per prescription drug, though price increases have slowed down this year compared with the last 10 years.

Couldn't have said it better! Hopefully Jae and others can get more employers to start paying attention to what is happening and why these PBM's moved into the work comp market. Employers do have a choice and they need to start speaking up about how their pharmacy dollars are being spent. As Jae stated, the problem we see most often is that employers think (or are being told) they DO NOT have a choice to selecting their own pharmacy provider due to bundled Insurance Carrier/TPA programs. We work with both bundled and unbundled program providers. There is nothing wrong with a bundled program if it is a transparent model for the employer that is truly going to help reduce their pharmacy cost. As we like to tell prospective employers, "It is your money and you do have a choice when it comes to how it is being spent on medications". Some employers feel they need to be with one of the Big Three to get the best deal. Unfortunately, that is rarely the case when managing a pharmacy program. We all utilize the same retail pharmacies nationwide to manage your program. CPS does go one step further than most of our competitors by providing our long-term medications using our in-house mail order with a true cost-plus model. This also means we have an idea of what the retail pharmacies are paying for the drugs they are dispensing and what a fair reimbursement rate should be. As we have been saying since the early 2000's before all of today's work comp paper PBM's started popping up, "Don’t get caught up in the Smoke and Mirrors?" If this is you, don’t feel alone. Please contact us if we can ever be of assistance in educating you and/or your clients that are looking to reduce their overall pharmacy spend. Performing a cost comparison takes very little effort on the part of the employer and usually results in huge savings. Thanks again for sharing Jae.

Drug prices have risen almost 40% over the past decade, according to a new tracker. by Justine Fisher The cost of prescription medications in the U.S. has increased 37% since 2014, far surpassing the rate of inflation, according to data from drug savings company GoodRx. Though the price increases have slowed this year in comparison to the past decade, the higher costs are raising out-of-pocket expenses for consumers. The average American spends $16.26 out of pocket per prescription, according to the data. “When things increase … inevitably, they do trickle down to consumers, especially those who are in a high deductible plan or who don’t have insurance or find themselves paying substantially out of pocket,” said GoodRx director of research Tori Marsh. https://lnkd.in/gh-Z-um4

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.

This recent BioCentury Inc. article highlights one of the potential consequences of the #InflationReductionAct: tighter formularies for Part D drugs as plans look for mechanisms to manage their increased liability under the redesigned Part D benefit beginning in 2025. The question is – will tighter formularies mean plans take a "more of the same" approach, using tried and true utilization management (UM) techniques currently allowed by CMS versus more draconian measures that spark calls of drug rationing. (Remember, CMS must approve plans’ UM strategies – and if plans go too far, CMS can make them change their criteria.) While the article specifically calls out oncology as an area to watch, we'd bet big moves first in areas like immunology and inflammation, where management is already more palatable and there is less perceived differentiation between many agents. There's another key point to consider, one that is largely left unaddressed in the BioCentury article: how will rebates inform plans' calculus? Given their increased financial liability, plans seem likely to seek higher rebates where possible to mitigate their risk in the catastrophic coverage phase. And they have an incentive to do so, since they get to keep a greater percentage of rebate dollars now than in years past. (The fact that negotiated drugs are not required to pay statutory manufacturer discounts in either the initial or catastrophic coverage phases intensifies this need as well.) All of which is to say ... formularies may get tighter, but there will still be room for alternates, especially branded versions paying big rebates to approximate the lowest net cost of negotiated drugs. #PatientAccess #Medicare #Pharmaceuticals #HealthcarePolicy #UtilizationManagement #drugpricing #pharmaceuticals #IRA cc Roger Longman Jeff Berkowitz Susan Raiola Ryan Walsh Rob O'Brien Jane F. Barlow, MD, MPH, MBA Julia Murphy Morgan Robinson

Major development: The FTC has filed a lawsuit against the largest pharmacy benefit managers (PBMs) for inflating insulin prices. Millions of Americans with diabetes are facing unreasonably high insulin costs, and the FTC is now targeting Optum Rx, Caremark, and Express Scripts for prioritizing profits over patients. The lawsuit claims these PBMs have manipulated the system to drive up insulin prices, impacting countless lives. At OCAP, we advocate for transparency and accountability in drug pricing. This action by the FTC marks a critical step toward reforming a broken system and ensuring affordable access to life-saving medications. https://lnkd.in/gusFUNUA #AffordablePrescriptions #PBMReform #PrescriptionDrugCosts #PharmacyBenefitManagers #OCAP

Further consolidation - now PBMs are manufacturers too. I saw CVS offering patients a one time highly restricted $200 rebate to switch. I begin to wonder when the manufacturer rules will start to apply to their entire business. Compliance between insurance companies and manufacturers is vastly different. What else does this mean? If manufacturers aren't considering a direct to consumer (and I mean employers or patients) model they will swiftly see their competitive products in higher formulary tiers - or they'll have to pay insane rebates and patients will continue to lose.