Where’s my money?

In an attempt to “take one for the team,” Express Scripts announced “it is introducing a novel formulary (aka Flex Formulary) to provide employers and health plans an opportunity to leverage changing dynamics to help lower their members’ out-of-pocket costs.” Groovy, but wait. According to Drug Channels, there are two possible roadblocks – Problem 1: Many plan sponsors are addicted to rebates and Problem 2: PBMs have rebate guarantees with their plan sponsor clients. “The economics of PBMs and plan sponsors can encourage the use of high-list/high-rebate drugs” and Express Scripts told Drug Channels that some of its clients are “addicted to rebate checks.” Give a hand to Express Scripts for trying something new. For one of the better Family Guy scenes go here and always remember to pay Stewie back (low volume recommended). Enjoy.

Summary of Trump’s Drug Pricing Plan

American Patients First. Catchy title. Unless you’ve been under a rock, you’ve likely heard of President Trump’s “sweeping” drug pricing proposals. While it’s way too complicated a topic to cover in our typical article length, we’re going to provide some of the better summaries. First is a nice summary about how this could impact the drug distribution system. Second is about how PhRMA increased its lobbying by 30% in 2017. Third is how Wall St. reacted in a positive manner on Friday, signaling Wall St. isn’t scared of the Trump plan for drug makers. Our last point is how Health & Human Services (HHS) Secretary Alex Azar said pharmacy benefit managers (PBMs) are a prime target in the effort. There will be lots more to digest in the future as the plan is unraveled. As the Brits say, keep calm and carry on.

Why you gotta be so mean?

Yes, that’s a TSwift “Mean” reference. Not saying we’re proud of it and not saying we’re not. Speaking of mean, FDA Commissioner Scott Gottlieb was mean this week. Using phrases like “rigged payment scheme” and “team up with payors” and “insidious barrier” Gottlieb took aim at PBMs, distributors, drug stores and pharmaceutical companies talking about how these entities “effectively split monopoly rents” instead of passing on savings to consumers. These comments came during a speech where he pointed out that 9 biosimilars have been approved by the FDA and only 3 are for sale. (see InsightCity’s Biosimilar HealthyDose) You’ll be shocked to know that the insurance companies blame the pharma companies and the PBMs blamed the insurance companies. Perfect. BTW, Europe has seen drug prices fall as much as 60% with the introduction of biosimilars. Not too shabby.

2. The war on drug stores heats up

Recent power plays in the prescription drug industry make J.R. Ewing’s actions seem like child’s play. If you don’t track the specialty pharmacy market, you should. This is a $100B industry that is growing rapidly. Think high-priced drugs used to treat Hep C and Cystic Fibrosis. According to the New York Times, large PBMs might be trying to force out independent specialty pharmacies. In Alabama, BCBS recently told patients that they cannot have their prescriptions filled at CVS. This is a big deal. It means patients have to sever long-standing relationships with pharmacists, especially difficult with specialty indications. This is all part of an emerging trend to narrow networks. Look it up. You will be glad you did and you’ll be smarter.

3. Drugs aggressively axed from CVS Health’s fomulary

In creating its 2017 formulary, the pharmacy benefits manager CVS Health, said “Hit the road, Jack,” to a number of drugs.  Some products like Sanofi’s insulin blockbuster Lantus and Amgen’s Neupogen were given the boot in favor of biosimilar counterparts. Ten other drugs were left high and dry for being “hyperinflationary,” including several drugs made by Valeant, Concordia, and Novum Pharma. Some rare disease and cancer drugs were also nixed. These formulary cuts should translate to cost savings for CVS Health but are worrisome for patients who may no longer have access to needed products.  This is also concerning for drug makers, particularly if other PBMs follow suit.