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Follow the 340B Prescription Dollar: How PBMs Profit from 340B Contract Pharmacies (Video): In my recent The 340B Drug Pricing Program: Trends, Controversies, and Outlook video webinar, I provided an update on the economics of the 340B program, reviewed the multiple controversies surrounding the program’s operations, discussed state and federal legislation, and analyzed how the Inflation Reduction Act of 2022 (IRA) will alter the 340B market. In the video excerpt below, I walk through a brief history of 340B contract pharmacies. I then document how five multi-billion-dollar, for-profit, publicly traded pharmacy chains and pharmacy benefit managers (PBMs)—Cigna (via Express Scripts), CVS Health, UnitedHealth Group (via OptumRx), and Walgreens, Walmart—continue to dominate the 340B contract pharmacy market. I conclude with a “follow the dollar” example of 340B prescription economics with contract pharmacies. If this clip whets your appetite for more, register to watch a replay of the full 90-minute video webinar from June. You can also check out our recent data deep dive: Hospitals Are Relying More on PBMs to Manage Manufacturers' 340B Contract Pharmacy Restrictions: DCI's 2024 Market Analysis. Click here if you can’t see the video below. © 2006-2024 HMP Omnimedia, LLC d/b/a Drug Channels Institute, an HMP Global Company. All rights reserved. This Feed is for personal non-commercial use only. #pbm #lifesciences #financial

Follow the 340B Prescription Dollar: How PBMs Profit from 340B Contract Pharmacies (Video): In my recent The 340B Drug Pricing Program: Trends, Controversies, and Outlook video webinar, I provided an update on the economics of the 340B program, reviewed the multiple controversies surrounding the program’s operations, discussed state and federal legislation, and analyzed how the Inflation Reduction Act of 2022 (IRA) will alter the 340B market. In the video excerpt below, I walk through a brief history of 340B contract pharmacies. I then document how five multi-billion-dollar, for-profit, publicly traded pharmacy chains and pharmacy benefit managers (PBMs)—Cigna (via Express Scripts), CVS Health, UnitedHealth Group (via OptumRx), and Walgreens, Walmart—continue to dominate the 340B contract pharmacy market. I conclude with a “follow the dollar” example of 340B prescription economics with contract pharmacies. If this clip whets your appetite for more, register to watch a replay of the full 90-minute video webinar from June. You can also check out our recent data deep dive: Hospitals Are Relying More on PBMs to Manage Manufacturers' 340B Contract Pharmacy Restrictions: DCI's 2024 Market Analysis. Click here if you can’t see the video below. © 2006-2024 HMP Omnimedia, LLC d/b/a Drug Channels Institute, an HMP Global Company. All rights reserved. This Feed is for personal non-commercial use only. #pbm #lifesciences #financial

A new pharmacy model from Optum Rx called Clear Trend Guarantee is seeking to increase transparency around drug costs for members. The pharmacy services arm of UnitedHealth Group's Optum, Optum Rx is promising that its price-centered offering will offer drug benefit plan sponsors greater predictability of pharmacy spend to help manage the total lowest net cost. Another model, Cost Made Clear, includes pass-through models that offer cost-plus pricing with lower ingredient costs. Clear Trend Guarantee is an alternative, guarantee-based pricing model that combines retail, home delivery, specialty drug and rebate components into one per-member guarantee.

UnitedHealth’s Optum Rx announced its new Clear Trend Guarantee pricing model, which builds upon its Cost Made Clear payment solutions announced last year. This model combines previously separated costs, including retail pharmacy, home delivery, specialty drugs, and rebates, into a single per-member price. This move represents greater transparency and cost-effectiveness in the pharmaceutical industry. It is part of a broader trend where major players like CVS Caremark and Express Scripts are also rolling out their own transparent reimbursement models. The drive for transparency is gaining momentum due to moves like this, messaging from Congress regarding a desire for greater transparency in pricing, and the rise of startups like Mark Cuban’s Cost Plus Drug Company, which are also pushing for lower costs and more clarity in drug pricing. This should all be extremely interesting to monitor moving forward – I’m curious to hear others’ throughs on the matter. Read further here: https://lnkd.in/g98wRA8B #HealthcareInnovation #Pharmacy #DrugPricing #PBMs #PricingTransparency

CVS Caremark, one of the largest pharmacy benefit managers (PBMs) in the U.S., is expected to pay at least $45 million to the state of Illinois to settle allegations that the PBM failed to pass on to the state rebates paid by drug manufacturers over a four-year period. “The settlement marks the latest in a series of regulatory setbacks that PBMs, also known as pharma middlemen, have faced in recent weeks,” writes Seeking Alpha. “A recent investigation by the House Committee on Oversight and Accountability found that PBMs drive patients towards costlier medicines and their affiliated pharmacies, reducing patient choices and leading to higher spending.” Under terms of a contract signed in 2015, CVS had agreed to send rebates negotiated with drug manufacturers to the state of Illinois. Read more: https://lnkd.in/ggejXC3s | #PBMs #DrugRebates #DrugDiscounts #CVS

Takeaway from the morning of the Healthcare Innovation Congress in DC: The first question from a Pharmacy Benefit Manager RFP - Have you been investigated by the FTC within the last five years? A "yes" is an automatic disqualifier. Here is who would automatically be disqualified: In the past five years, the Federal Trade Commission (FTC) has investigated several major pharmacy benefit managers (PBMs) regarding their business practices. Specifically, in June 2022, the FTC launched a comprehensive probe targeting six of the largest PBMs: CVS Caremark, Express Scripts, OptumRx, Humana, Prime Therapeutics, and MedImpact Healthcare Systems . The investigation focuses on several key issues, including: 1. The role of vertical integration and its impact on drug access and pricing. 2. Practices that steer patients toward PBM-owned pharmacies. 3. Fees and clawbacks charged to unaffiliated pharmacies. 4. Opaque methods for determining pharmacy reimbursements. 5. The prevalence of prior authorizations and other administrative restrictions. 6. The impact of rebates and fees from drug manufacturers on formulary design and drug costs for payers and patients. Would your PBM be disqualified?

CVS Health is evolving the traditional pharmacy reimbursement model, bringing greater transparency and simplicity to the system with both CVS CostVantage™ and CVS Caremark TrueCost™. See how below. For retail pharmacy, CVS CostVantage™ will define the drug cost and related reimbursement with contracted pharmacy benefit managers (PBMs) and payors, using a transparent formula built on the cost of the drug, a set markup, and a fee that reflects the care and value of pharmacy services. These changes will also help ensure that CVS Pharmacy® locations will continue to be a critical touchpoint for consumers to access affordable health care in their communities. For clients, CVS Caremark TrueCost™, will be a model innovation that offers client pricing reflecting the true net cost of prescription drugs, with visibility into administrative fees. Through this approach, clients will have the flexibility to choose a pharmacy benefit model that works best for the unique needs of their members and plan.

Today, I had the privilege of witnessing a thought-provoking roundtable discussion at the White House focused on Pharmacy Benefit Managers (PBMs). All of the speakers and panelist did well. However, I have to give a shout out to Mark Cuban and Dr. Alex Oshmyansky for delivering an exceptional testimony, urging us all to reconsider our engagements with the three major PBMs. Bravo! In our ongoing commitment to transparency at Keystone, we want to shed light on common practices employed by PBMs that may not be immediately apparent. Understanding these tactics is crucial for making informed decisions about healthcare costs. Here are six ways in which PBMs often hide their fees: 1. Spread Pricing: PBMs may charge clients more for a claim than what the pharmacy charges them, pocketing the difference. 2. Rebate Capture: Large PBMs often secure kickbacks or "rebates" from pharmaceutical companies for certain drugs. In some cases, these rebates may not be fully passed on to clients and may even be kept offshore. 3. "Other" Manufacturer Revenue: Beyond rebates, PBMs create additional revenue streams from pharmaceutical companies, such as the "Manufacturer Access Fee," which PBMs may retain for their own benefit. 4. Fine Print Fees: PBMs may advertise a low "admin fee" while quietly charging for various other items, resulting in substantial additional costs for clients. 5. Owned Pharmacies: Some major PBMs own specialty and mail-order pharmacies, leading to potential conflicts of interest. They might overcompensate their own pharmacies, prioritizing profits over fair client costs. Or as Mark Cuban put it "Sh*tting on Independent Pharmacies". 6. Promotion of Expensive Drugs: PBMs may guide members toward higher-cost drugs to maximize their earnings through spread and rebates, resulting in increased expenses for the client. Last week I mentioned employers being held to higher fiduciary responsibility and the J&J case, this goes hand and hand with that post. Understanding these practices is vital for navigating the complex landscape of healthcare costs. At Keystone, we believe in fostering transparency and empowering our clients to make informed decisions. If you're an employer, and your current Agent or Broker has not discussed these critical matters with you, how can you measure their ROI? We can guarantee our ROI in matched savings by shopping your PBM. #KeystoneBenefitGroup;#PBManalysis;#Transparencyiskey;#ROI;#MarkCuban;#Costplusdrugs

Why do PBM rebates and spreads matter to the FTC? PBMs play a pivotal role in healthcare by leveraging rebates from drug manufacturers to influence drug formularies and pricing. This process involves negotiating rebates to secure preferred status on formularies, ultimately impacting patient access and pricing strategies. Additionally, the use of spread pricing by PBMs raises questions about transparency and the distribution of rebate savings. The debate surrounding rebate models sheds light on how drug prices can be influenced by market dynamics and rebate negotiations. This has sparked regulatory and policy concerns, as stakeholders question the impact of these practices on pricing transparency and patient affordability. Understanding the complexities of PBM rebate structures is crucial in assessing their implications on healthcare costs and patient access to medications. #PBM #Healthcare #DrugPricing #FTC #Rebates #Transparency #PatientAffordability

Thoughts on this? >> FTC report on PBMs >> Comment below! >>> lqventures.com #strategy #competitiveintelligence #marketing #pharma #healthcare #pharmaceutical #biotech #productmarketing