Will Amazon’s Online Pharmacy Display Therapeutic Equivalents?

Postscript (12/2/2017)   Amazon is now the best hope for a consumer-directed pharmacy benefits website that “crosses the chasm” by suggesting lower cost therapeutic equivalents. It has been ten years since we wrote a paper on The Future of Consumer-Directed Pharmacy Benefits .  The possibility of consumer-directed health care got a new life in the mid-2000s […]

Was CVS’s Formulary Exclusion of Mavyret a Violation of Antitrust Laws?

Summary In October 2017, CVS Caremark (CVS) finally decided to exclude from its 2018 drug formulary the new-to-market Hepatitis C Virus (HCV) drug Mavyret despite it being list priced aggressively by its manufacturer AbbVie at an estimated 72% below the list price of Gilead Sciences’ incumbent HCV drug Harvoni. We estimate that Gilead Sciences had […]

Hepatitis C Formulary Choices for 2018: Will CVS Risk Looking Bad?

Summary: AbbVie’s aggressive list pricing for its new Hepatitis C Virus (HCV) drug Mavyret is disruptive to the current PBM business model.  It essentially asks PBMs to align with client interests by adding a cost-effective drug to their national formularies despite little to no possibility for retained rebates. On September 15, 2017 Express Scripts (ESRX) […]

Blame Pharmacy Benefit Managers (Not Pharma) For Driving Drug Price Inflation

Summary: We start with a review of the history of the opaque pharmacy benefit manager (PBM) reseller business model. We present our prior estimates of the distribution of PBM gross profits over the past decade showing that they have become dependent today on retained rebates from specialty drugs. Next, we present numbers showing how PBMs […]

Three Phases of the Pharmacy Benefit Manager Business Model

We present the case that there has been three distinct phases of the pharmacy benefit manager (PBM) business model over the past 15 years. Each phase has been demarcated by a major shift in the dominant source of gross profits. These radical shifts in the primary source of gross profits in such a short period […]

Pharmacy Benefit Managers

CURRENT PAPERS ON PBMs A Position Auction Demonstration Project for Lowering Reference + Biosimilar Rx Drug Prices in Medicare Part B  (8/19) Off-Target: Pelosi’s Binding Arbitration Proposal to Reduce Medicare Part D Drug Prices (04/19) Quantifying a Pharmacy Benefit Manager (PBM) Fee-For-Service Business Model   (03/19) CVS’s Negligent Handling of Its 2019 Formulary Change In Coverage […]

The Pharmacy Benefit Manager (PBM) Business Model

CURRENT PAPERS: Quantifying a Pharmacy Benefit Manager (PBM) Fee-For-Service Business Model (03/19) The Problem with CVS’s “Guarantee Net Cost” PBM Business Model (12/18) Three Phases of the Pharmacy Benefit Manager Business Model (09/17) Will Amazon’s Online Pharmacy Display Therapeutic Equivalents (12/17) Blame PBMs (Not Pharma) For Driving Drug Price Inflation (09/17) Merck Data Discredits PBM-Sponsored Study of […]

Preferred Provider Pharmacy Networks

PREFERRED PROVIDER PHARMACY NETWORKS The CVS-Caremark Merger and the Coming Preferred Provider War (12/06) Medicare Part D and Preferred Provider Pharmacy (04/05) The CVS-Caremark Merger: The Creation of an Elasticity of Demand for Retail Rx (11/06) Contrary to What Wall Street and the FTC Say, The PBM Business Model is Misaligned (11/05) Sins of Omission’: […]