USC Schaeffer Institute’s Post

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

Eli Lilly is urging the U.S. government to pause drug-price negotiations under the Inflation Reduction Act (IRA), creating uncertainty around the Biden administration’s plan to release a new list of targeted drugs before leaving office. The IRA, signed by President Biden, enables the government to secure lower prices on older, widely used medications—savings that have already delivered significant reductions for seniors. However, Lilly CEO Dave Ricks believes negotiations should be put on hold until key issues with the IRA are resolved, pointing to broader pricing challenges for high-demand therapies like Novo Nordisk’s Ozempic and Wegovy. If negotiation rules lower prices for these diabetes and weight-loss drugs, it could spark downward pressure across the market, including Lilly’s competing treatments. With the outgoing administration considering whether to release the next round of drugs for negotiation soon, and the White House touting $1.5 billion in savings for older Americans, the debate underscores tensions between cost-saving measures and pharmaceutical innovation—and could shape how prescription-drug costs are managed in the future. Eli Lilly's shares are currently at $800 a share, 83x price/Earning. We here at Century Risk Advisors will stay on top of this and inform our clients and how this can affect the cost of their healthcare. #healthcare #pbm #prescriptions #shrm #themoreyouknow https://lnkd.in/eACJahyB

Pharmacy Benefit Managers Under Fire: Will 2025 Bring Reform? Pharmacy Benefit Managers (PBMs), often described as the “middlemen” in the pharmaceutical industry, are facing mounting criticism for their opaque practices and alleged role in driving up drug prices. PBMs negotiate drug prices and manage formularies for insurers, pharmacies, and patients, but their rebate systems and vertical ownership structures with insurers and pharmacies have drawn sharp scrutiny from lawmakers, industry leaders, and the Federal Trade Commission (FTC). In 2023, the FTC sued the three largest PBMs—Caremark, Express Scripts, and OptumRx—accusing them of anticompetitive behavior and inflating insulin prices. This followed years of bipartisan calls for reform to increase transparency and prohibit conflicts of interest stemming from PBM-pharmacy-insurer ownership. While legislative efforts for PBM reform gained traction last year, including proposals to mandate transparency and pass rebates directly to Medicare, meaningful change stalled in Congress. The upcoming 2025 legislative session is expected to revisit key proposals, such as the PBM Act, which aims to break up monopolistic ownership structures and address market consolidation. With bipartisan support for reform growing, and the FTC actively pursuing enforcement, 2025 could mark a turning point in addressing the influence of PBMs on drug pricing. However, with significant industry pushback and political uncertainty, whether these efforts succeed remains to be seen. PBM reform represents an opportunity to restore fairness and transparency in the pharmaceutical supply chain—a win for patients, providers, and employers alike. #healthcarereform #pbm #transparency us-beacon.com https://lnkd.in/gZSS98wT

Let's Discuss: While it has been a reality that higher list prices have played a role in larger rebates and increased revenue for payers, the focus on List Price misses the point that it is the Net Price that ultimately informs the out-of-pocket costs for the patient. The root of the issue is, do the savings captured from every rebate get passed onto the patient? How much or little for each drug? In the case of the cost of insulin for patients, the Federal government argues that the end result is that patients are suffering from rising out-of-pocket costs, hence the need for interventions like the Inflation Reduction Act which now caps the cost for Medicare beneficiaries, and now, a lawsuit by the FTC against the three largest PBMs to remedy patients under commercial health plans. What is interesting about today's FTC lawsuit is that the previous administration had passed an HHS OIG final rule to remove Safe Harbor protections under the Federal anti-kickback statue, but the current administration has repeatedly postponed enforcing removal of these protections for prescription drug rebates until January 2032 at the earliest. Rather than outlawing drug rebates, they are now instead going after higher list prices as the root cause of PBM (and potentially, even drug manufacturer) anticompetitive pricing practices? Definitely food for thought for some interesting goverment policy discussions in healthcare. I welcome your perspective.

🚨 Unmasking the Real Culprits: How PBMs and Insulin Manufacturers Drive Up Healthcare Costs, Not Physicians 🚨 A recent article in Politico sheds light on a significant lawsuit unfolding in federal court, involving major pharmacy benefit managers (PBMs) and insulin manufacturers. Eighty states, cities, counties, school boards, and unions are part of the case against CVS Caremark, Express Scripts, OptumRx, Eli Lilly, Novo Nordisk, and Sanofi. Allegations of a "multibillion-dollar price-fixing scheme" lie at the heart of the lawsuit. Local governments claim they were overcharged for insulin due to hidden payments and mislabeling of rebates by PBMs, violating contracts and depriving them of negotiated rebates that could lower costs. The outcome of this litigation could have a profound impact on healthcare costs, especially for millions of Americans with diabetes dependent on insulin. A favorable ruling could pave the way for more transparent pricing and potentially lower insulin prices, alleviating financial strains on patients and insurers. While PBMs and insulin manufacturers argue that counties were aware of the rebate system, the case continues with ongoing discovery, leaving the timeline for a ruling uncertain. This lawsuit has the potential to reshape pharmaceutical pricing and healthcare costs nationwide. Stay informed for further updates on this evolving situation! 💼💊 #Healthcare #Insulin #Litigation #PharmacyBenefitManagers #CostContainment https://lnkd.in/gSCXnTur

The federal agency took action against CVS Health's Caremark, Cigna's Express Scripts, and UnitedHealth Group's Optum and their respective group purchasing organizations — Zinc Health Services, Ascent Health Services, and Emisar Pharma Services. The three PBMs administer 80% of prescriptions in the United States, the FTC said in a statement announcing the action. The agency filed an administrative complaint, which means its allegations will be tried in a formal hearing before an administrative law judge. It will not be heard in a criminal court. The three PBMs "have extracted millions of dollars off the backs of patients who need life-saving medications," said Rahul Rao, deputy director of the FTC's Bureau of Competition, in the statement. The FTC action is not the first taken by a government agency against PBMs. Ohio Attorney General Dave Yost sued Express Scripts and Prime Therapeutics in March 2023, alleging antitrust violations. The FTC's complaint, which is not yet public, alleges that PBMs excluded lower-priced insulins from their formularies "in favor of high list price, highly rebated insulin products." The FTC describes a market in which PBMs, as they consolidated market power, began to extract higher rebates from drug makers. In turn, insulin manufacturers started raising their prices. That allowed PBMs to collect larger rebates, even as drug makers profited, according to the FTC. The PBMs "engaged in unfair methods of competition and unfair acts or practices under Section 5 of the FTC Act by incentivizing manufacturers to inflate insulin list prices, restricting patients' access to more affordable insulins on drug formularies and shifting the cost of high list price insulins to vulnerable patient populations," said the FTC, in its statement. Andrea Nelson, chief legal officer for The Cigna Group, said in a statement that the lawsuit "continues a troubling pattern from the FTC of unsubstantiated and ideologically-driven attacks on pharmacy benefit managers, following the FTC's biased and misleading July 2024 report, which Express Scripts demanded the Commission retract earlier this week."

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

Today, CMS revealed the long-waited negotiated prices of ten drugs covered under Medicare Part D. This first round of negotiations under the Inflation Reduction Act (IRA) is an important change for drug pricing in the US. This visualization compares the 2023 list prices with the negotiated prices for 2026. For instance, the negotiated price of a popular blood thinner in Eliquis represents a 56% reduction (from $521 per month to $231 per month). The crude estimate in the cost savings for Medicare will undoubtedly be substantial. The Congressional Budget Office estimates that Medicare could save $98.5 billion over ten years from these negotiations, potentially reducing financial strain on the program and increasing access for currently excluded underserved populations. However, as we look ahead, the broader impact on the U.S. healthcare system remains uncertain. Several persisting questions include but not limited to: - How will this impact drug pricing for private and non-Medicare insurance programs?  - Will these negotiated prices result in reduced out-of-pocket expenses for patients?  - What effects could these lower negotiated prices have on the overall drug supply?  - What are the potential long-term implications for research and development?  - How will this shift in the U.S. market influence global markets? For the first time, CMS had the opportunity to analyze clinical evidence and other evidence related to costs of R&D, production, and distributions. We look forward to learning more about the CMS’s evidence synthesis and evaluation methods and how those methods inform negotiations. If conducted with rigorous methods, such value-based assessment can have a positive impact. We believe this development underscores the increasing importance of generating robust evidence to support informed decision-making. #Medicare #HealthcareReform #DrugPricing #Pharma #InflationReductionAct #HealthEconomics #ValueBasedCare #CMS

Read the Certara announcement of our latest report into how the IRA is affecting biosimular uptake: https://ow.ly/I5I150SYw3O History was made today as HHS announced lower, negotiated drug prices for Medicare Drugs that go into effect in 2026. The Inflation Reduction Act (IRA), signed into law almost exactly 2 years ago today, gave Medicare the power to negotiate drug prices. The IRA's impact extends beyond negotiated prices as new research by Certara's Caitlin Verrilli, Matias Junghahn and Maximilian Vargas, PhD, MBA shows. Our industry report, "Boost or Bust? Evaluating the Impact of the IRA's Enhanced Reimbursement on the Uptake of Biosimilars,'' examines the legislation's measurable impact on increasing biosimilar market share and savings for the U.S. healthcare system. #Medicare #inflationReductionAct #IRA #biosimilars #marketaccess https://ow.ly/8fKY50SYw07.

💊 The White House has revealed the reduced prices for 10 prescription drugs impacted by the first wave of Medicare negotiations mantadted by the Inflation Reduction Act (IRA). 💉Diabetes treatments were hit with the biggest pricing reductions: Merck's Januvia was reduced by 79%, and Novo Nordisk's Fiasp was reduced by 76%. The smallest price cut was for Johnson & Johnson's cancer treatment, Imbruvica, reduced by 38%. 🗨️ Although the benefits of these price reductions will be felt by millions of patients, the pharma companies affected warn of the long-term impact of the IRA: 👉 J&J said that although the cost caps will benefit some people, price reductions will cause other patients to have reduced access to provider-prescribed treatments. 👉 Bristol Myers Squibb argued that by focusing on government price setting, IRA overlooks a central problem for patient affordability: how insurance plans determine out-of-pocket costs. 👉 Novartis stated that the price-setting provisions in IRA are unconstitutional and said that it will limit access to medicines "now and in the future" See the full list of medicines and read more about the IRA's process from Fierce Pharma below ⬇️ #BigPharma #InflationReductionAct #PharmaNews