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Health plan costs - prescription drugs

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Drug Pricing Crisis and the Role of the Intermediary: How Did We End Up Here? (PPT)
14 PowerPoint slides. Topics include: [1] Contributing factors; [2] Independent pharmacy marketplace realities; [3] PBM influence in U.S. supply chain; [4] PBMs, plan benefit design and lack of fiduciary responsibility; [5] PBM revenue streams; [6] Maximum Allowable Cost (MAC) pricing: PBM proprietary drug pricing standard. (National Community Pharmacists Association [NCPA])
Employer Premiums Rise Nearly 7% in 2017 as Employees Absorb More of Health Insurance Cost
"Almost three-quarters (72.6%) of prescription drug plans have four or more tiers, while 27.4% have three or fewer tiers. Even more surprising is that the number of six-tier plans has surged, accounting for 32% of all plans, when only 2% of plans were using this design only a year ago." (Wolters Kluwer Law & Business)
[Opinion] How Ethics and Transparency Can Solve the PBM Crisis
"The pharmacist should be at the center of care coordination to ensure that each prescription is the right medication ... Under a pay-for-performance model, the PBM's goals align with those of the plan sponsor.... The PBM should then facilitate any needed changes to the prescription through the prescriber.... Medications selected for the formulary must be the most effective, regardless of cost or rebate.... PBMs must proactively focus on clinical efficiency and accuracy." (Employee Benefit News)
[Opinion] Start with Pharmacy to Reduce Healthcare Costs
"It's not health insurance that's expensive; it's the cost of healthcare. And the more expensive the drugs, the greater the profits throughout the whole supply chain. While innovation should surely be rewarded, perhaps the prices of drugs should be policed like monopolistic public utilities." (Frenkel Benefits)
Anthem's In-House Drug Plan: What Should Employers Expect?
"Anthem's move shows a trend of larger insurers taking the PBM capabilities in house, instead of contracting with PBMs separately, something that can help when it comes to managing costs.... It could make it easier to have specialty care managed under one umbrella.... There's potential for more transparency over pricing[.]" (Bloomberg BNA)
Lower Rx Cost Trend Increases Projected for 2018
"The rising criticism over soaring drug prices may have caught the attention of some drug manufacturers, as the increase in prescription drug benefit cost trends will be lower in 2018 than in 2017 ... Medical plan cost trend increases are projected to be slightly higher than 2017 projections, a change in direction that may concern plan sponsors given that medical coverage represents the lion's share of their health care costs. Price inflation -- not utilization -- is the leading driver of trend. Rx cost-management strategies and improved vendor contracting are plan sponsors' top priorities." (Segal Consulting)
A Path Toward Understanding and Lowering U.S. Prescription Drug Spending
"Prescription drugs accounted for 17 percent of total U.S. health care spending -- or about $457 billion -- in 2015. And that share is expected to rise over the next decade as drug costs outpace those of all other health care services.... For individuals who purchase health insurance, or who have group coverage from their employer, prescription drugs account for the largest share of their total premium expense -- 22.1 percent on average[.]" (The Commonwealth Fund)
Health Insurer Anthem Brings Pharmacy Business In-House, Taps CVS to Help
"Health insurer Anthem Inc will start managing its billions of dollars of patient prescriptions itself in 2020 ... ending a deal with Express Scripts Holding that had deteriorated into lawsuits over terms. Anthem, which sued the pharmacy benefit manager last year over claims of being overcharged by $3 billion annually, said it would use drug retailer CVS Health Corp to handle prescription fulfillment and claims processing for five years for the new company, called IngenioRX." (Reuters)
[Opinion] NCPA Statement for House HELP Committee Hearing on the Cost of Prescription Drugs: How the Drug Delivery System Affects What Patients Pay (PDF)
"PBMs serve as the 'middlemen' in most prescription drug transactions in the United States. First, they leverage the number of beneficiaries in a plan to negotiate lucrative rebates from pharmaceutical manufacturers. Second, they formulate limited pharmacy provider networks that will supply or dispense these drugs to plans' beneficiaries and in turn, charge plan sponsors for these products.... PBMs extract 'spread' profits from both activities. Unless a plan has negotiated a true 'pass through' contract with its PBM -- and typically only the largest and most sophisticated plans are able to do so -- the PBM will keep a significant percentage of the rebate dollars that they have obtained only by virtue of the number of the plans' beneficiaries for themselves." (National Community Pharmacists Association [NCPA])
Combatting the Prescription Drug Abuse Crisis
"Despite the widespread nature of the problem, 'a lot of employers don't have the information they need to address this issue,' says Don Teater, medical advisor to the National Safety Council. For example, 80 percent of 200 Indiana employers surveyed in 2015 said they have been affected by prescription drug abuse in their workplaces, yet only 53 percent said they have a written policy on using these types of medications at work[.]" (Society for Human Resource Management [SHRM])
California Governor Signs Drug Pricing Transparency Law
"The law ... requires drug manufacturers to give a 60-day notice if prices are raised more than 16 percent over a two-year period. The law also requires health plans and insurers to file annual reports outlining how drug costs affect healthcare premiums in California." (Reuters)
[Opinion] Municipality Sues Over Drug Cost Increase: $40 Vial Now Costs $35,000
"The City of Rockford, IL ... [has] sued drug manufacturer Mallinckrodt Pharmaceuticals over the cost of its drug, H.P. Acthar.... The drug is recently reported to cost $35,000 per vial, but cost only $40 in 2001. Rockford, which spent almost $500,000 on the drug in 2015, is alleging that Mallinckrodt, which obtained Acthar through an acquisition, engaged in monopolistic sales practices by purchasing a competing manufacturer and then jacking costs up. And the suit may have some legs since this cost increase is simply unconscionable." (Frenkel Benefits)
Insurers Are Slow to Approve Pricey New Cholesterol Drugs
"During the first year an expensive class of new cholesterol-lowering drugs was on the market, only one in three patients with a prescription actually received the therapy due to lack of insurance approval and high copays ... The drugs, known as PCSK9 inhibitors, ... can cost up to $14,000 per year[.]" (Reuters)
Value-Based Contracting for Drugs and Medical Devices: An Innovative Solution Impaired by Outdated Regs
"Payors, government and industry have all endorsed the concept of applying value-based contracting to prescription drugs and devices. Significant regulatory obstacles, however, stand in the way of fully recognizing the potential for value-based contracting in the prescription drug and device arena. The current federal regulatory scheme for medicines and devices, which was designed around traditional fee-for-services models, is ill-suited to value-based models." (Pepper Hamilton LLP)
Super Spending: U.S. Trends in High-Cost Medication Use
"An estimated 576,000 Americans spent more than the median household income on prescription medications in 2014. This population of patients grew an astounding 63% from 2013. Further, the population of patients with costs of $100,000 or more nearly tripled during the same time period, to nearly 140,000 people. The total cost impact to payers from both patient populations is an unsustainable $52 billion a year." (Express Scripts)
Hospitals, Health Insurers Biggest Sources of Rising Health Costs
"Of the $240 billion increase in private health insurance spending between 2009 and 2015, hospitals accounted for 50 percent and health insurance administration and profit accounted for 12 percent (a 30 percent increase over that period) ... The U.S. is spending as much on insurance administration as on drugs[.]" (Bloomberg BNA)
High Prescription Drug Cost Trends Projected to Be Lower for 2018
"Drug trends for actives and early retirees are expected to remain in the double-digits, continuing to be much higher than medical trend. Price inflation -- not utilization -- is the leading driver of trend... [T]he cost increases of pharmacy benefits now exceed the cost increases of inpatient hospital claim expenses or physician claim expenses ... [O]nce specialty Rx paid through the medical plan is added to Rx paid through PBMs, the cost of Rx is larger than inpatient, outpatient and professional services for some plans." (Segal Consulting)
Pharmacy Benefit Management of Opioid Prescribing: The Role of Employers and Insurers
"[In] a given year, at a company with 100,000 employees, 61 employees would avoid addiction if prescriptions were reduced to align with the doses and duration of use consistent with the CDC Guideline. For employers, this translates into substantial health care cost savings, as a person struggling with addiction would have more than $15,000 in additional health care costs a year as compared to a person who is not dealing with substance abuse." (Health Affairs)
Amazon in Talks with PBMs Over Pharma Supply Chain
"Amazon has been hiring more healthcare leaders and expanding its drug and medical supply distribution in recent months, spurring rumors the online retailer is stepping into the pharmacy business.... [It] could take 18 months to 24 months before Amazon can achieve pharmacy licenses in all 50 states[.]" (Becker's Hospital Review)
Prescription Drug Spending in U.S. Among Highest Worldwide
"Generic drugs make up 84 percent of the total U.S. pharmaceutical market, which is a larger share than in all other countries, excluding the U.K., which is tied with the U.S. with 84 percent. Followed by the U.S. are Germany with 81 percent, Netherlands with 71 percent and Canada with 70 percent of the share of generic prescription drugs. Lower prescription drug prices in the other countries reflect more centralized processes for obtaining pharmaceuticals and setting coverage." (Wolters Kluwer Law & Business)
[Official Guidance] Text of CMS Memo: Creation of the 2018 Benefit Year HHS-Operated Risk Adjustment Adult Models -- Draft Prescription Drug (RXCUIs) to HHS Drug Classes (RXCs) Crosswalk (PDF)
11 pages. "The 2018 benefit year HHS-operated risk adjustment adult models include twelve drug classes, or RXCs, in addition to age-sex, enrollment duration, and diagnostic categories or hierarchical condition categories (HCCs). This memo describes the criteria used to create the RXCs finalized in the 2018 benefit year Payment Notice final rule, including how CMS determined the inclusion criteria for the underlying drugs. This memo accompanies a draft crosswalk for classifying drugs into RXCs for 2018 benefit year risk adjustment for which the underlying drugs will be updated for 2018 benefit year risk adjustment operations based on more current data." (Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS])
Cost Is Top Reason for Not Filling a Medication Prescription
"Although 97% of Americans who received a prescription for medication in the last 90 days filled it, the most-cited reason among respondents who did not fill their prescription was cost (67%) ... 12% of all respondents said that cost drove them to purchase prescription medication outside the United States." (HealthLeaders Media)
[Opinion] Drawing a Line in the Sand: Employers Must Rethink Pharmacy Benefit Strategies (PDF)
"This report offers a call to action on the key issues and important steps public and private employers can take to: [1] Understand how today's pharmacy benefits model, with multiple parties in the middle, contributes to higher costs in the supply chain; [2] Identify ways to work with intermediaries to reduce unnecessary costs and drive efficiency." (Midwest Business Group on Health [MBGH])
The Price Isn't Right: States' Drug Pricing Transparency Laws
"[S]tates such as Ohio and California have put drug pricing transparency initiatives on their ballots to force the issue.... Vermont was the first state to require greater transparency from drug manufacturers regarding price increases, passing legislation in 2016. But other states' attempts to pass transparency initiatives, including ones this summer in Massachusetts and California, have failed in the face of fierce opposition from the pharmaceutical industry." (Bloomberg BNA)
How Price Transparency Can Lower Healthcare Costs
"Drug prices are expected to increase by 9.9 percent this year ... One of the main causes of frustration among consumers is in their inability to see a clear rationale for why prices are rising and what exactly they are paying for.... With the changing climate in healthcare policy, price transparency has come to the forefront as people consider how to manage their medical spending. Price transparency can help drive down healthcare costs in by increasing pressure on providers to control costs and ensure that patients receive the highest quality of care possible for the price they pay." (Jeffrey Sanginiti, for HFMA)
Health Insurers Enter Fray in Drug Price Fight
"Health insurers are pushing back against a recent report that accuses them of denying some patients coverage for medical products and procedures, alleging it is part of a campaign by the pharmaceutical industry to distract the public from rising drug prices.... [One] study does suggest insurers have some blame regarding patients' rising drug prices, [finding] that 34 percent of patients who were denied coverage for a medication or procedure were forced to forgo the recommended treatment because the insurer would not cover the cost." (Morning Consult)
[Opinion] Curbing Prescription Drug Prices Through the PBM Model
"PBMs can play a critical role in keeping costs in check and ensuring affordable access for all beneficiaries.... [W]ithout PBMs, [Medicare] premiums would be 66 percent higher. Because of PBMs, the Part D program will save more than $1,800 per year per beneficiary ... The savings that PBMs generate for Part D are also highly encouraging for the employers, unions, health plans and others in the private sector working to keep prescription drug costs in check for their employees and members." (Meghan Scott, via Morning Consult)
CMS Issues Part D Premiums for 2018
"The average premium for a basic Medicare Part D prescription drug plan in 2018 will be $33.50 per month, which is a decrease from $34.70 in 2017 ... The decline in the average premium comes despite the fact that spending for the Part D program continues to increase faster than spending for other parts of Medicare, largely driven by spending on high-cost specialty drugs." (Wolters Kluwer Law & Business)
Generic Drug Prices Are Falling, But Are Consumers Benefiting?
"Dozens of old generic drugs have risen in price in recent years, for reasons that include supply disruptions and competitors' leaving the market....Despite these cases, the trend toward deflating generic prices appears to have accelerated as companies have more aggressively undercut each other's prices.... [M]ost of those with health insurance pay a fixed co-payment -- $10, for example -- for each generic prescription, and therefore don't pay more or less, regardless of any fluctuation in the actual price. And even those who pay cash for generics may not notice a drop in price because many are already cheap." (The New York Times; subscription may be required)
Take the Generic Drug -- Unless Insurer Says No
"Consumers have grown accustomed to being told by insurers -- and middlemen known as pharmacy benefit managers -- that they must give up their brand-name drugs in favor of cheaper generics. But some are finding the opposite is true, as pharmaceutical companies squeeze the last profits from products that are facing cheaper generic competition. Out of public view, corporations are cutting deals that give consumers little choice but to buy brand-name drugs -- and sometimes pay more at the pharmacy counter than they would for generics." (HealthLeaders Media)
[Official Guidance] Medicare Projects Decrease in Drug Premiums for 2018
"[CMS has] announced that the average basic premium for a Medicare Part D prescription drug plan in 2018 is projected to decline to an estimated $33.50 per month. This represents a decrease of approximately $1.20 below the actual average premium of $34.70 in 2017.... The decline in the average premium comes despite the fact that spending for the Part D program continues to increase faster than spending for other parts of Medicare, largely driven by spending on high-cost specialty drugs." (Centers for Medicare & Medicaid Services [CMS], U.S. Department of Health and Human Services [HHS])
PBMs Are Targets in Nevada's Diabetes Drug-Pricing Transparency Bill
"Nevada's Senate Bill 539 places new reporting requirements on pharmaceutical manufacturers and PBMs for drugs that are determined to be essential for treating diabetes. Pharmaceutical sales representatives and some non-profit organizations are also faced with new reporting requirements under the law.... The new law also creates a fiduciary relationship between PBMs and third parties that contract with the PBM for pharmacy benefit management services." (FisherBroyles, via Lexology)
Will Point-of-Sale Rebates Disrupt the PBM Business?
"Since 2011, the difference between pre-rebate costs (known as gross costs) and post-rebate costs (known as net costs) has grown so that the 'gross-to-net bubble' is worth approximately 10% of all Pharmacy spend -- or about $37 billion.... PBM financial improvements are overwhelmingly -- usually 70% or more -- due to higher rebates instead of better discounts or lower fees.... [S]ince rebates are paid to the plan sponsor, members on High Deductible plans still see higher costs ... [S]ome PBMs are offering 'Point of Sale' rebates, where the member on a High Deductible plan sees their cost immediately reduced by the rebate. This approach benefits the member, yet the plan sponsor needs to approve this approach as it affects net plan costs." (Mercer)
[Opinion] Myth vs. Fact: What's Behind Drug Prices
"Drugmakers say they set high prices that reflect the cost of researching and developing medicines. Fact: High prices have little or nothing to do with drugs' innovation or efficacy for patients.... [Further, pricing] is based on what already exists, and competitors use shadow pricing to drive each other's prices higher.... Drug companies argue high prices are needed to fuel innovation. Fact: Instead of promoting true medical advances, a common business strategy in the pharmaceutical sector is to buy the rights to older drugs and then immediately jack up the prices.... [Further, the] numbers keep telling a different story." (America's Health Insurance Plans [AHIP])
Link Between Rising Generic Drug Prices and Market Competition Levels
"Of the 1120 generic drugs included in the study period, there was an average price increase of 30%, while the weighted price (baseline market size was used at continuous variable) decreased by 14.2%. However, drugs in the group categorized as low-competition demonstrated a 63.8% increase in average price; there was a 43.8% increase for those in medium competition, and 9.7% increase among those in high competition." (American Journal of Managed Care)
Ohio Takes Drug Price Measure to Voting Booth
"More than $109 million was spent last year to defeat California's Proposition 61, which would have prohibited the state from purchasing prescription drugs at a higher price than what the Veterans Affairs Department pays. Ohio voters will take up a similar proposal in November amid growing public outcry over the climbing cost of prescription drugs." (Bloomberg BNA)
Getting to the Root of High Prescription Drug Prices: Drivers and Potential Solutions
"This report documents 10 major problems that play a role in high U.S. prescription drug prices.... This report also discusses a broad range of feasible policy actions that have been proposed by various stakeholders, experts, and researchers and could be further developed by policymakers to address high drug prices. Some of the actions identified will have a direct impact on pricing, while others may have an indirect impact but could lead to other favorable outcomes." (The Commonwealth Fund)
[Opinion] Unaccountable Benefit Managers: How PBMs Put Profits Over Over Patients
"PBMs use their outsized power to reap tremendous profits, particularly through a variety of different fees with different names known broadly in the industry as 'Direct and Indirect Remuneration' or 'DIR' fees. DIR fees are charged to pharmacies months after a patient buys a prescription. Ostensibly in place to incentivize pharmacy performance, DIR fees only serve to increase PBM profits. In fact, they have no basis in regulation or law and are just part of an already convoluted system that PBMs have rigged to boost their bottom line at the expense of patients." (Jeff Vacirca in Morning Consult)
[Opinion] NCPA Statement to the Senate HELP Committee on the Cost of Prescription Drugs: How the Delivery System Affects What Patients Pay (PDF)
"Since their inception, PBMs have morphed from claims adjudicators into little known and largely unregulated corporate giants that exploit their strategic position at the 'middle' of nearly all drug transactions in the U.S. to extract profits from the upstream and downstream participants in the drug supply chain while providing questionable value to the ultimate consumer. PBMs are also heavily involved in and reap enormous profits from their involvement in federally supported or subsidized health care programs, like Medicare and Medicaid." (National Community Pharmacists Association [NCPA])
[Opinion] Manhattan Institute Testimony to the Senate HELP Committee on the Cost of Prescription Drugs: How the Delivery System Affects What Patients Pay (PDF)
"Broadly speaking, robust generic competition, along with the advent of large and sophisticated payers, has kept the relative share of health care costs attributable to medicines broadly stable, even as new medicines have become a cornerstone of treatment for acute and chronic illness. However, there are real challenges facing the health care system today, specifically for patients with serious chronic illnesses who are facing high coinsurance or deductibles largely for what are called 'specialty' medicines, and that challenge needs to be addressed." (Manhattan Institute for Policy Research)
Capitol Hill Debate Over Drug Prices Shifts to PBMs
"While lawmakers continue to disagree about the pharmaceutical industry's role in soaring prices for medicines, there are bipartisan calls on Capitol Hill to probe the middlemen in the distribution chain: pharmacy benefit managers. The new focus comes amid an effort by the drug industry to shift the blame from drugmakers, which have faced the brunt of the public backlash for exorbitant pricing, by exposing what it considers opaque business practices by PBMs." (Morning Consult)
Medicaid Prior Authorization and Opioid Medication Abuse and Overdose
"Health insurance payers can implement policies to help curb the opioid epidemic.... Enrollees within plans that subjected opioid medications to [Prior Authorization] policies had lower rates of opioid medication abuse and overdose after initiating opioid medication treatment." (American Journal of Managed Care)
Express Scripts Sues Maker of Overdose Drug, Intensifying PBM Feud
"Drug makers and some members of Congress have accused Express Scripts and other benefit managers of operating in the shadows, pocketing an undisclosed share of the payments they exact from drug makers even as consumers are asked to pay inflated prices for the medicines they need.... The lawsuit ... provides some tantalizing details about the company's dealings." (The New York Times; subscription may be required)
Prescription Drug Price Rebates May Raise Out-of-Pocket and Federal Spending
"Proponents argue that rebates result from vigorous negotiations that help lower overall drug costs. Critics argue that rebates have perversely increased the costs patients pay out of pocket, as well as the costs for Medicare as a whole. This [article] discusses how the availability of rebates for drugs covered by the Medicare Part D program may raise costs for patients and Medicare while increasing the profits of Part D plan sponsors and pharmaceutical manufacturers. Two policy alternatives are herein proposed that would reconfigure cost sharing to lower patient out-of-pocket costs and reduce cost shifting to Medicare." (The JAMA Network)
Insurers Digging Through the Numbers on Oncology Treatments
"Based on a Cigna study, less than 1/2 of the oncology drugs approved from 2009-2014 have a known survival benefit. There are numerous examples. One is a regime of 5-FU + Leucovorin at a cost of $5,000 per treatment with an estimated survival outcome of 12 months versus the drug Xeloda which costs $30,000 and estimates survival at 13.2 months." (Frenkel Benefits)
Best Practices for Managing Costs of Orphan Drugs (PDF)
"The overarching 'best practice' management approach for specialty drugs in the medical benefit is to: [1] pay only reasonable costs for drugs, administration, and related fees; and [2] pay only for drugs that are clinically appropriate for the patient.... [T]hese 'simple' objectives aren't easy to carry out for specialty drugs administered in medical sites of care for two reasons.... First, medical claims may be billed with limited information.... Second, drug pricing in the medical benefit is highly, and inappropriately, variable." (Archimedes, via Chelko Center for Benefits Management)
[Opinion] NCPA Offers House Committee Suggestions to Enhance Medicare, Increase Access to Prescription Drugs
"NCPA recommended the following: [1] Enact H.R. 1038 (the Improving Transparency and Accuracy in Medicare Part D Drug Spending Act). The legislation would ban retroactive direct and indirect remuneration (DIR) fees on community pharmacies. [2] Strengthen and finalize proposed CMS guidance on DIR and pharmacy price concessions. [3] Review and standardize how Part D plans measure pharmacy quality and performance in community pharmacies. [4] Enact H.R. 1316 (the Prescription Drug Price Transparency Act) to increase transparency into how generic drugs are priced by PBMs and paid for in Medicare." (National Community Pharmacists Association [NCPA])
2017 Milliman Medical Index
"In 2017, the cost of healthcare for a typical American family of four covered by an average employer-sponsored preferred provider organization (PPO) plan is $26,944, according to the Milliman Medical Index (MMI).... The MMI's annual rate of increase is 4.3%.... Prescription drug trends are lower, but still high.... Employees pay a bigger piece of the healthcare cost pie." (Milliman)
Prescription Drug Costs Break Through the Partisan Logjam
"Republicans are almost as likely as Democrats, and more likely than independents, to pick lowering the costs of prescription drugs as a priority for President Trump and the Congress. It's the number two priority in health for all Americans, just behind reducing out of pocket costs in general." (Drew Altman of the Kaiser Family Foundation, via Axios)
No Standing for Union Health Plan Claims Against Sanofi for Free Drug Sample Scheme
"A union health plan lacked standing to bring state unfair trade practices claims against a pharmaceutical company it charged caused monetary damage through a free samples scheme involving the osteoarthritis medication Hyalgan, and a diabetes drug switching scheme, because they failed to specifically allege that the plan or any of its beneficiaries paid, let alone overpaid, for the drug in the relevant states during the relevant time period[.]" [Plumbers' Local Union No. 690 Health Plan v. Sanofi, S.A., No. 15-956 (D.N.J. May 4, 2017)] (Wolters Kluwer)
[Opinion] NCPA Urges Senate to Retain Key Prescription Drug Benefit Provisions of ACA
"[P]harmacist-provided prescription drug therapy is 'incredibly cost effective' in helping improve medication adherence by patients, which in turn 'improves health outcomes and reduces much more expensive interventions, such as emergency room treatment.' ... [Up] to $290 billion in annual health care expenses result from the lack of medication adherence ... [A] leading predictor of adherence is a patient's proximity to and relationship with a pharmacist." (National Community Pharmacists Association [NCPA])
Three Approaches to Controlling Rx Costs
"Analyze the data on prescription drug spend in your plan ... Educate employees on what they can do to lower their Rx costs ... [C]onsider working with an expert to conduct a specialty diagnostic of medical and pharmacy plans to assess the current state and identify areas for improved management." (Mercer)
Drug Maker Sanofi Says It Will Tie Price Increases to Health Spending
"The company says it's adopting a three-pronged approach that includes setting launch prices for its new drugs worldwide by measuring 'value' -- meaning, among other things, how well they work for patients. In the United States, Sanofi will also disclose annual increases in its list prices, before and after the discounts given to health insurers." (The Boston Globe)
Did Medicare Part D Reduce Mortality?
"[The authors] investigate the implementation of Medicare Part D and estimate that this prescription drug benefit program reduced elderly mortality by 2.2% annually. This was driven primarily by a reduction in cardiovascular mortality, the leading cause of death for the elderly. There was no effect on deaths due to cancer, a condition whose drug treatments are covered under Medicare Part B.... [T]he value of the mortality reduction is equal to $5 billion per year." (Journal of Health Economics; purchase required)
Frequently Asked Questions About Prescription Drug Pricing and Policy (PDF)
37 pages. "This report will address frequently asked questions about government and private-sector policies that affect drug prices and availability. Among the prescription drug topics covered are federally funded research and development, regulation of direct-to-consumer advertising, legal restrictions on reimportation, and federal price negotiation. The report provides a broad overview of the issues as well as references to more in-depth CRS products. The appendixes provide references to relevant congressional hearings and documents ... and a directory of CRS prescription drug experts[.]" [Report R44832, May 2, 2017] (Congressional Research Service [CRS])
Rising Costs for Patented Drugs Drives Growth of Pharmaceutical Spending in the U.S.
"Analysis of a seven-year trend ... shows that prescription drug spending has increased 10 percent annually for Blue Cross and Blue Shield (BCBS) members since 2010, an overall rise of 73 percent. This upward trend is due to a small fraction of emerging, patented drugs with rapid uptake and large year-over-year price increases that are more than offsetting the continued growth in utilization of lower-cost generic drugs.... [W]hile consumer out-of-pocket costs have risen just three percent annually for prescription drugs in total, they have risen 18 percent annually for patented drugs. Current trends suggest that this rapid rise in drug trend costs is likely to continue in future years." (Blue Cross and Blue Shield Association)
Attention Turns to Specialty Pharmacy (PDF)
"Specialty biotech drugs represent 1 to 2% of prescriptions yet 35% or more of overall pharmacy costs -- and are projected to reach 50% of costs over the next three years. In the United States, the cost of these drugs is multiples more than in other countries, and their use presents global competitiveness and philosophical challenges for plan sponsors. This article examines specialty drug trends, discusses balancing access to them versus their impact and reviews the current state of specialty drug management." (Benefits Quarterly, published by the International Society of Certified Employee Benefit Specialists [ISCEBS])
The PBM Story: What They Say, What They Do, and What Can Be Done About It
"Pharmacy benefit managers (PBMs) say they reduce drug prices and increase patient access, but the facts just don't bear that out.... PBMs got their start as useful claims processors but then morphed into large corporations more interested in extracting profits from the prescription drug supply chain than in ensuring medication affordability and access. And that's the real story: PBMs have done more to enrich themselves over the past 25 years than they have done to bring down drug costs." (National Community Pharmacists Association [NCPA])
Health Insurance Companies Respond to Opioid Epidemic
"According to a September 2016 study ... the total annual cost of the U.S. opioid epidemic is $78.5 billion, most of which is attributed to insurance coverage. The impact of this crisis is having a significant effect on benefit claim costs and more so on overall productivity of the private employer workplace. With this in mind, this document outlines the posture and reformative contractual changes being taken by insurers in the health insurance industry." (EBCG)
Employers Need New Evaluation Process of PBMs to Control Drug Costs
"For the first time this year, large employers noted a surge in spending on pharmaceuticals as a top cost driver of health costs ... Many companies follow a traditional RFP approach when selecting a PBM. Prescription drugs are listed and the costs associated with each drug are tallied in a spreadsheet. Benefit specialists need to try and understand the way a PBM manages prescription drug spending to get a clearer picture of costs for their organization." (Healthcare Trends Institute)

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