On the pile. 46Brooklyn put out a piece demonstrating the difficulty of understanding drug prices. It is a doozy of a read. A set-aside-time-to-concentrate read. But if you are skeptical about drug pricing and want to lump it all on manufacturers, you should take the time to read it. Big picture, there is no single concept of drug price; there are so many different parties doing negotiation and contracting and each one skews the price a little different. One good reminder in there, if a pharmacy benefit manager (PBM) contract says $0 brand dispensing fee, know that the money is coming from somewhere if it costs $10 in pharmacy overhead costs.

We built this city. Drug pricing hits center stage in this Health Affairs paper with the conclusion that pharmaceutical list prices are increasing but rebates are increasing faster. This is very much a paper you will see quoted when the need to highlight prices/rebates comes up, save it for talking points. And net for pharma might not be going up but their reputation goes down. Patients often pay based on list price and can pay more than their plan does.

Not a straight line. Quick but juicy editorial in the Journal for Comparative Effectiveness Research on market strategy/pricing and innovative drugs. Bonus? A nice shout-out to the value of health economic outcomes research professionals who are having a rough year in pharma companies.

On deck. MedPAC, an advisory group to Congress on Medicare issues, is back in action and released their agenda for 2024-2025. If you’re trying to figure out what MedPAC does, this is a nice quick description of what they are responsible for and what they are going to be working on. Naturally I honed in on the Medicare prescription drug benefit (Part D) where they will be looking at the stability of standalone prescription drug plans and comparing drug coverage between Medicare Advantage and standalone prescription drug plans. Excellent topics. The long-term sustainability of the standalone plan market seems tenuous if it needed the last-minute demonstration boost. Yet it is critical for Medigap beneficiaries.  

One for me, one for you. The USC Schaeffer Center is out with research in JAMA on PBM market strategy. The research finds that, while all markets (Medicare, commercial, Medicaid managed care) were highly concentrated in terms of PBMs, Medicare Part D was the most concentrated. For example, the five largest PBMs control 93.6% of the Part D market but 79.6% in commercial and 71.5% in Medicaid managed care market. And different PBMs have different strengths with Express Scripts, for example, having a much stronger presence in commercial than Part D. With great power, comes great responsibility (and how much accountability?)

I said what I said. Pharmacy benefit manager (PBM) executives that testified during a House Oversight Committee meeting in July declined to revise their testimony despite the threat of fines or jail time. Chair James Comer (R-KY) said that testimony did not align with Committee or Federal Trade Commission findings. Committee staff is reviewing written and oral testimony.

H/T to Brian Reid who used the words goat rodeo this week and made me curious what a goat rodeo would look like.