A Position Auction Demonstration Project to Lower Reference + Biosimilar Drug Prices In Medicare Part B

Summary We outline below a proposal for a Center for Medicare and Medicaid Services (CMS)  demonstration project involving a position auction overlay to the existing reimbursement system for Medicare Part B. What is being auctioned off is a yearly “fail first” position in Medicare Part B.  The auction is limited in scope to therapeutic classes […]

Off-Target: The Pelosi Proposal to Lower Medicare Part D Drug Prices  

Summary The purpose of paper is to show that the binding arbitration proposal championed by Speaker of the House Nancy Pelosi to lower Medicare Part D drug prices is off-target. We believe that there three broad categories of drugs where binding arbitration based on some neutral party’s estimate of value is more appropriate than mano-e-mano […]

Quantifying a Pharmacy Benefit Manager (PBM) Fee-For-Service Business Model

Downloadable .pdf version: Quantifying a PBM FFS Business Model Summary: Using CVS’s 2018 10-K reports to the SEC and its 2018 Drug Trend Report, we convert its PBM segment (a.k.a. Caremark) reseller gross profits business model to a single transparent fee-for-service expressed in terms of dollars per member per year (PMPY).   The following table […]

PBM Startup Papers

PBM STARTUP PAPERS Quantifying a Pharmacy Benefit Manager (PBM) Fee-For-Service Business Model (03/19) IFC Health : An Independent Formulary Company (01 /18) Will Amazon’s Online Pharmacy Display Therapeutic Interchange (12/17) Three Phases of the Pharmacy Benefit Manager Business Model (09/17) The Future of Consumer-Directed Pharmacy Benefits (08/07) Walgreen’s Transparency Issue (11/03)        

CVS’s 2019 Formulary Removals – Negligent Handling Diabetes Test Strip Change

Summary Around the first week in August for the past four years, CVS has made an official announcement of its next year’s formulary changes. It posts these changes on its own websites. But that changed in 2018. During an August 8th 3Q2018 Earning Conference Call,  CVS said that 2019 formulary details would be available around […]

The Problem with CVS’s “Guaranteed Net Cost” PBM Business Model

Summary: Consider this meta:  CVS opaquely is substituting one opaque source of gross profits — guaranteed net cost markup — for another opaque source — retained rebates. The pharmacy benefit manager (PBM) CVS Caremark has offered its self-insured corporate clients an alternative business model called “Guaranteed Net Cost”.  The pricing scheme features 100% pass-through of […]

Will PBMs Behave Differently? CVS – Aetna Merger, Express Scripts – Cigna Merger

The Effect of Corporate Structure on Formulary Design: The Case of Large Insurance Companies Poster Presentation, ISPOR 10th Annual Meeting, Washington DC, May 2005 The Role of Pharmacy Benefit Managers in Formulary Design: Service Providers or Fiduciaries? Journal of Managed Care Pharmacy Vol. 10 No. 4 July/August 2004 pp 359-60 The Formulary Game (07/03) Hepatitis C […]

Insulin Drug Price Inflation: Racketeering or Perverse Competition?

    Summary We contend that recent insulin drug price inflation is a case of perverse competition rather than a case of illegal racketeering in violation of the RICO Act.   We will present the case that a now consolidated racketeering RICO lawsuit initiated by the law firm Hagens Berman has inverted the hierarchy of […]

IFC Health – “An Independent Formulary Company”

Opportunity: Misaligned Big 3 PBM (Express Scripts, CVS Caremark, OptumRx) business model dependent on retained rebates resulting in PBM national formularies that are far from cost-effective. (see founder’s 15-year analysis of PBM misalignment at nu-retail.com )   Value Proposition: Misaligned national formularies of the Big 3 PBMs which are uncritically adopted by plan sponsors Deliver […]