Drug Rebates

Health policy experts appear to largely agree that regardless of the partisan makeup of Congress and the White House next year, PBM reform will continue to be a key priority. Opinions are mixed, however, as to whether Democrats or Republicans would be more likely to take the hardest line against a highly scrutinized industry.

During a recent webinar hosted by Faegre Drinker Consulting, Nick Manetto, a principal at the firm, said Democrats are “maybe a hair” more likely to embrace PBM reforms that go beyond enacting new transparency requirements. PBM critics have said that while they support transparency, more data-reporting requirements aren’t enough to drive meaningful change in the industry.

When the Federal Trade Commission (FTC) officially accused the three largest PBMs of artificially inflating insulin prices, it marked the latest move in what has become a protracted effort by federal regulators to rein in the industry’s business practices.

However, experts who spoke to AIS Health say it’s unclear how much of an impact the FTC-driven litigation will have on the market — or whether the complaint itself will survive once the White House gains a new occupant.

Even if the FTC’s lawsuit is “robustly successful,” says Joe Shields, managing director of Transparency-Rx, it is focused on only one drug category. “That’s not meant as a criticism, but the reality is, what that means to the broader aspects of formulary or pharmacy benefit management, it’s an open-ended question,” adds Shields, whose organization of smaller PBMs is pushing for industry reform.

Employers and health plans are less satisfied with the “Big Three” PBMs — CVS Health Corp.’s Caremark, UnitedHealth Group’s Optum Rx and The Cigna Group’s Express Scripts — compared with their smaller peers in the pharmacy benefits industry, according to a Pharmaceutical Strategies Group (PSG) survey published this month. While the Big Three have taken steps in recent months to offer more transparent models, Michael Lonergan, PSG’s president, tells AIS Health those companies have faced numerous challenges to their businesses that have made them more unpopular among clients.

For instance, he mentions the Federal Trade Commission (FTC) lawsuit filed on Sept. 20 against the Big Three PBMs and their affiliated group purchasing organizations (GPOs), accusing them of inflating the list price of insulin medications and restricting access to those drugs. The FTC also issued an interim report in July that was highly critical of the Big Three, which together account for about 80% of the U.S. prescription drug claim processing market.

While plenty of telehealth and online drug dispensing companies have rolled out direct-to-consumer (DTC) offerings, two pharma manufacturers have unveiled their own digital platforms this year in a bid to streamline and simplify consumers’ experience with the U.S. health care system. Other drugmakers are likely to launch similar offerings, say industry experts, as they offer benefits to various stakeholders. Still, certain challenges exist for those stakeholders, and manufacturers will need to ensure that they take certain steps — both pre- and post-launch — to set themselves up for success while remaining compliant with various regulations.

On Aug. 27, Pfizer Inc. launched PfizerForAll, a “user-friendly digital platform designed to make access to healthcare and managing health and wellness more seamless for people across the U.S.” It is aimed at Americans with migraine, COVID-19 or flu and offers adult vaccinations for conditions such as COVID-19, flu, respiratory syncytial virus (RSV) and pneumococcal pneumonia.

Now that CMS has revealed the prices of the first 10 drugs subject to Medicare price negotiation, all eyes are on how Part D plans will cover those drugs on their formularies in 2026, when the new prices go into effect.

To that end, a recent poll from Zitter Insights offers some clues about how payers and PBMs are thinking about this thorny question.

Now that CMS has revealed the prices of the first 10 drugs subject to Medicare price negotiation, all eyes are on how Part D plans will cover those drugs on their formularies in 2026, when the new prices go into effect.

To that end, a recent poll from Zitter Insights offers some clues about how payers and PBMs are thinking about this thorny question.

The flash poll was conducted after CMS revealed the results of the first round of the Medicare Drug Price Negotiation Program, which was authorized by the Inflation Reduction Act. Through that process, Medicare for the first time set a Maximum Fair Price (MFP) for 10 branded drugs selected due to their high cost and lack of generic or biosimilar competition.

The Congressional Budget Office raised concerns about the potential harms of joint ownership of pharmacy benefits managers, health insurance companies and pharmacies in new responses to U.S. lawmaker questions, adding to the chorus of scrutiny that may be building toward 2025 congressional action against vertical integration in the health sector.

Insurance company and PBM mergers “tends to lower the prices paid for drugs” and “reduce spending on drugs for patients in vertically integrated health insurance plans,” the CBO found, but any reductions in spending by the plan may not be passed on to enrollees in the form of lower premiums.

Some findings from the new report by Pharmaceutical Strategies Group (PSG), an EPIC company, may have seemed like old news: AbbVie Inc.’s Humira (adalimumab) was the top specialty drug in terms of spend. Inflammatory treatments dominated the top 10 of those agents. But the 2024 Artemetrx State of Specialty Spend and Trend Report, released July 25, also revealed some new findings, including that rebates had a smaller impact in 2023 than they did the previous year and that cost per claim played a bigger role in the 2023 specialty drug trend than it did in the prior time frame.

PSG based the report — which is sponsored by Walmart Specialty Pharmacy — on integrated pharmacy and medical claims data from the book of business for its proprietary SaaS platform Artemetrx. In its eighth year, the newest report is based on 138 million medical claims and 136 million pharmacy claims. The findings are based mainly on commercial health plans.

Some findings from the new report by Pharmaceutical Strategies Group (PSG), an EPIC company, may have seemed like old news: AbbVie Inc.’s Humira (adalimumab) was the top specialty drug in terms of spend. Inflammatory treatments dominated the top 10 of those agents. But the 2024 Artemetrx State of Specialty Spend and Trend Report, released July 25, also revealed some new findings, including that rebates had a smaller impact in 2023 than they did the previous year and that cost per claim played a bigger role in the 2023 specialty drug trend than it did in the prior time frame.

PSG based the report — which is sponsored by Walmart Specialty Pharmacy — on integrated pharmacy and medical claims data from the book of business for its proprietary SaaS platform Artemetrx. In its eighth year, the newest report is based on 138 million medical claims and 136 million pharmacy claims. The findings are based mainly on commercial health plans.

The Federal Trade Commission (FTC) on July 9 released a new report stemming from its investigation into the business practices of PBMs — and on the next day, the Wall Street Journal and other news outlets reported the antitrust agency is on the verge of filing a lawsuit against the country’s largest PBMs over how they negotiate rebates with drug manufacturers for products including insulin. The FTC reportedly is concerned that the lure of high rebates is causing PBMs to steer patients toward higher-cost drugs.

The FTC has not yet confirmed the WSJ report, which cited people familiar with the matter. But one expert says the FTC needs to be careful about the way it treats rebates.