Gross to Net, a Saga. As soon as I saw Adam Fein’s Drug Channels article on Gross to Net in Part D redesign, I knew it would throw off my day. It was just catchy enough to cause a buzz and get the attention of Heads of Market Access at pharmaceutical companies and start the cascade of emails.
As a catch-up, gross to net refers to the difference between the list price of a product and then the price after discounts/rebates. Most entities in the pharmaceutical supply chain make money based on the price of the drug so the higher the price, the higher the value of their percentage (whether it is a discount, rebate, or service fee.) It’s part of the reason that brand drug prices look outrageous in the United States compared to other countries. A company might price a drug at $1000 for a 30-day supply and then must give discounts and rebates equal to $300+ throughout the supply chain.
Recent history has offered examples of biosimilars or unbranded insulins which have a lower list price, lower rebates but the plans have often preferred the branded product that was more expensive but with higher rebates. The thought was that with the Part D redesign, plans might prefer lower list prices to keep beneficiaries out of the catastrophic phase thus reducing plan spending overall.
I did work last year that showed that not to be the case and the article this week confirmed the hypothesis we’d been working under – plans will continue to like higher prices, higher rebates. Why? Because plans now have more of a reinsurance responsibility so they’d prefer to KEEP the rebate they can collect.
Affordability conundrum. Colorado’s prescription drug affordability board determined that Enbrel was unaffordable to patients (despite huge rebates back to plans.) The drug could now face an upper payment limit. These prices would apply to commercial plans regulated by the Colorado, fully insured large groups (over 100 employees), uninsured individuals, the state employee plan and Colorado Medicaid. The upper payment limit would not apply to Medicare and ERISA plans can opt in.
RSV. A lot of babies got the vaccine, a lot more parents wanted it.
State of Affairs. Pharmacy Benefit Manager (PBM) reform has been front and center for the last year and now the State Attorney Generals are asking Congress to just get it done. Makes sense – it should be easier to get something done once rather than 39 times (number of AGs that signed the letter.
Too soon? Quick take on what Trump might pursue for healthcare with another term. Note this does not tackle the potential getting rid of federal agencies’ angle. More on election stuff later in the year
Cell and Gene Therapy: A personal story on the miracle of Cell and Gene therapy from the New York Times.