House Committee Grills Big 3 PBM Executives On Practices
Executives from the Big 3 pharmacy benefits managers (PBMs) got grilled today before the House Oversight Committee. The committee just released a report on its over year-long investigation of the Big 3 that found that they are anticompetitive, imperil independent pharmacies, overcharge payers and patients using spread pricing, and enter into brand drug rebate deals that tie to the drugs’ preferential placement on formularies. The report concluded the Big 3 not only don’t save on or control costs but steer patients toward higher-priced drugs and their own pharmacies.
The committee argued that the PBMs have created multiple ways to advantage themselves in the vertically integrated world the Big 3 live, including the use of group purchasing organization (GPOs). The executives tried to refute the findings and often were silent in response to questioning. The committee also criticized prior authorization and step therapy use.
In other news, CVS Health agreed to pay at least $45 million to the state of Illinois to settle allegations that rebates were not passed through during a recent four-year period.
I have been a defender of PBMs over the years because they do bring value. But more and more, evidence is coming out regarding some unseemly activities, including rebate deals, spread pricing, and related-party transactions that do disadvantage government programs, companies, and the public at large. These practices need to change.
But I am amazed at how little focus is on the biggest problem in drug pricing – brand drug makers. Yes, we have Medicare drug price negotiations, but only Democrats have challenged the brand drug makers on high prices and bad practices. The attack on PBMs is bipartisan, but the GOP has refused to challenge brand drug makers.
Additional articles: https://www.fiercehealthcare.com/payers/pbms-defend-its-business-practices-lawmakers-arent-convinced and https://www.modernhealthcare.com/politics-policy/pbm-hearing-cvs-caremark-express-scripts-optum-rx and https://www.modernhealthcare.com/politics-policy/pbm-congressional-hearing-house-oversight-committee-cvs-cigna-unitehealth and https://www.wsj.com/health/pharma/drug-middlemen-push-patients-to-pricier-medicines-house-probe-finds-80c20fda and https://www.statnews.com/pharmalot/2024/07/23/cvs-caremark-pbm-illinois-medicines-rebates-ftc/
(Some articles may require a subscription.)
#drugpricing #pbms #branddrugmakers
https://thehill.com/policy/healthcare/4788713-pbms-prescription-drug-costs-medication
Drug Shortages Linked To Low Prices
A new white paper from German market analytics firm QYOBO concludes that disproportionately low prices for generic medicines are linked to drug shortages. It found that net sales prices for drugs in shortage have plummeted in many cases. About 83% saw their net sales prices slip between 2020 and 2022. Another analysis found that the U.S. is in its sixth straight quarter of drug shortages, with 300 in shortage in Q2 2024, compared to an all-time high recently of 323.
Additional article: https://www.axios.com/2024/07/22/six-straight-quarters-of-drug-shortages
#drugpricing #generics #drugshortages
Blockbuster Rare Heart Disease Drug Needs 96% Discount To Be Cost-Effective
Showing what is so wrong with American drug pricing, a new report from the Institute for Clinical and Economic Review (ICER), an influential organization focused on evidence-based drug-cost analysis, finds that Pfizer’s blockbuster drug Tafamidis needs to be discounted by 96% to be considered cost-effective.
The drug was developed for the treatment of the rare heart disease transthyretin amyloid cardiomyopathy (ATTR-CM). ICER suggests that Tafamidis (which are the brands Vyndaqel and Vyndamax) should cost $5,200 and $10,400 per year under a quality-adjusted life year (QALY) formula. Tafamidis’ current price is around $194,000 after discounts. Pfizer has seen success with the drug even at the excessively high price, with sales up 36% last year to reach $3.3 billion.
#drugpricing #branddrugmakers
Molina To Buy ConnectiCare
Molina Healthcare is buying Emblem subsidiary ConnectiCare for $350 million. The CT insurer has approximately 140,000 members in Medicare, the Exchanges, and other commercial plans. Emblem has had years of financial struggles.
Additional article: https://www.modernhealthcare.com/insurance/molina-healthcare-acquire-connecticare-holding-company
(Some articles may require a subscription.)
#molina #manda #acquisitions
https://www.beckerspayer.com/m-and-a/molina-to-acquire-emblemhealth-subsidiary-for-350m.html
Humana Backs Prior Authorization Reform Bill
In a surprise move, Humana CEO Jim Rechtin says he backs the Improving Seniors’ Timely Access to Care Act that is being reintroduced in Congress. The bill has died several times due to a high price tag. But the Congressional Budget Office (CBO) recently scored the bill at zero because most of the provisions have already been put in regulation by the Centers for Medicare and Medicaid Services (CMS). Rechtin wrote on LinkedIn that reducing prior authorizations is part of “access to quality, affordable healthcare.”
While much of it will be reality anyway, I still oppose the bill as a major over-reach on prior authorization policy. It will lead to higher costs for Medicare Advantage (MA) plans.
#humana #medicareadvantage #priorauthorizations
— Marc S. Ryan
