Express Scripts saw its value decline with increased scrutiny of its role in the drug pricing problem.<\/p>\n
One of the main services PBMs provide are so-called drug formularies, or tiered lists of medicines, where drugs deemed \u201cpreferred\u201d are much cheaper than those that are \u201cexcluded.\u201d<\/strong><\/p>\n Preferred status on a major formulary can add millions in sales volume, and drugmakers offer huge rebates in order to secure it.<\/p>\n The growing scale of PBMs – Express Scripts\u2019s annual revenue has increased by $80 billion in the past decade – has contributed to an explosion in the size of rebates and the so-called gross-to-net gap between list prices and the amount that\u2019s actually paid.<\/p>\n Critics contend that PBMs reap excessive profits from this arrangement, and that companies like Express Scripts have created an incentive for drugmakers to hike prices to offer higher rebates.<\/p>\n This, in turn, has prompted regulatory scrutiny, in the form of a planned Trump administration rule.<\/p>\n The firm\u2019s new formulary upends the status quo by creating a path to preferred status for drugs that have lower list prices.<\/strong><\/p>\n The strategy was enabled by drugmakers Gilead Sciences Inc. and Amgen Inc., which recently announced that they would make their pricey Hepatitis C and cholesterol medicines available at a substantially reduced list price as they try to boost sales volume in tough markets.<\/p>\n That new price is in line with what the drugs previously cost after rebates, so the overall cost to the system may not change much.<\/p>\n But this is big news for people on high deductible plans as well as Medicare beneficiaries, who often have out-of-pocket expenses that are based on the full list price.<\/p>\n This formulary option likely won\u2019t be broadly popular to start. List-price competition is very much still the exception, and the rebate system is firmly entrenched.<\/p>\n Many health-plan sponsors actually like the status quo, as the rebates result in a big pile of money that they can use flexibly. <\/strong><\/p>\n But it\u2019s still a smart move for Express Scripts.<\/p>\n Other drugmakers will likely follow Amgen and Gilead into a dual-class drug pricing structure if the two firms manage to boost sales volume 1 ; the new formulary from Express Scripts will make that shift easier.<\/p>\n And if the U.S. government follows through on its plans to regulate rebates, this sort of pricing structure will likely become even more appealing.<\/p>\n This isn\u2019t a panacea for high drug prices. But any step toward correcting a major health-care distortion that has a real human cost is a good one.<\/p>\n Source: Bloomberg<\/strong><\/em><\/p>\n","protected":false},"excerpt":{"rendered":" Express Scripts Holding Co. and other pharmacy-benefit managers make money by negotiating drug prices on behalf of health-plan providers. The list prices…<\/p>\n","protected":false},"author":3,"featured_media":11323,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_monsterinsights_skip_tracking":false,"_lmt_disableupdate":"","_lmt_disable":"","cybocfi_hide_featured_image":"","footnotes":"","_wpscppro_dont_share_socialmedia":false,"_wpscppro_custom_social_share_image":0,"_facebook_share_type":"","_twitter_share_type":"","_linkedin_share_type":"","_pinterest_share_type":"","_linkedin_share_type_page":"","_instagram_share_type":"","_medium_share_type":"","_threads_share_type":"","_google_business_share_type":"","_bluesky_share_type":"","_selected_social_profile":[],"_wpsp_enable_custom_social_template":false,"_wpsp_social_scheduling":{"enabled":false,"datetime":null,"platforms":[],"status":"template_only","dateOption":"today","timeOption":"now","customDays":"","customHours":"","customDate":"","customTime":"","schedulingType":"absolute"},"_wpsp_active_default_template":true},"categories":[378],"tags":[],"class_list":["post-11327","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-management-financing"],"acf":[],"yoast_head":"\n![\"Lower](\"https:\/\/www.pharmamanage.gr\/wp-content\/uploads\/2018\/11\/images_Lower_Drug_Prices_Get_an_Assist_From_a_Big_Player_P1.jpg\" "\\"Lower")
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