SEOTEMBER 10, 2024
What’s Happening in Healthcare: Q1 2025
Drug Pricing Special Edition
In this edition of VistaRx’s quarterly newsletter, we kick off a busy year with a drug pricing deep dive.
Insights for 2025:
The ongoing IRA saga and a very important month
The ongoing IRA saga and a very important month
Our favorite annual drug pricing analysis
Our favorite annual drug pricing analysis
Tariffs and their potential impact on generics
Tariffs and their potential impact on generics
A new term for specialty pharmacies to think about
A new term for specialty pharmacies to think about
The 11th-hour PBM reform you may have missed
The 11th-hour PBM reform you may have missed
The Inflation Reduction Act: The Saga Continues
Insulins were the top of the ticket for Medicare’s drug price negotiations, causing manufacturers to effectively eliminate rebates for many products. Healthcare organizations and providers have been engaging up-channel partners in the value chain to determine their best path forward following this shift.
More strategic reshuffling of the drug supply chain will happen in February when CMS announces the next set of drugs (as many as 15) covered under Part D that will be subject to price negotiations.
As of this moment, it remains unclear what other actions the Trump administration will take to bring drug costs down for consumers.
We expect drug manufacturers to continue to do some strategic reshaping of their offerings and operations as we get deeper into Medicare drug price negotiations and CMS, HHS, and other Hill agencies analyze the impact.
Insulins were the top of the ticket for Medicare’s drug price negotiations, causing manufacturers to effectively eliminate rebates for many products. Healthcare organizations and providers have been engaging up-channel partners in the value chain to determine their best path forward following this shift.
More strategic reshuffling of the drug supply chain will happen in February when CMS announces the next set of drugs (as many as 15) covered under Part D that will be subject to price negotiations.
As of this moment, it remains unclear what other actions the Trump administration will take to bring drug costs down for consumers.
We expect drug manufacturers to continue to do some strategic reshaping of their offerings and operations as we get deeper into Medicare drug price negotiations and CMS, HHS, and other Hill agencies analyze the impact.
A Gift for the New Year: Brand Name Drug Pricing Analysis
It’s our favorite time of year—Drug Channels’ inflation-adjusted analysis of brand name drugs was recently published. If you’re unfamiliar, it’s a no-holds-barred look at drug pricing with experts’ decades-long perspectives.
This year’s edition is particularly welcome as we see the response to the IRA has matured and become more measurable. If you have the stomach for it, we suggest you read the report in full. If not…
Our Most-Highlighted Notes:
It’s our favorite time of year—Drug Channels’ inflation-adjusted analysis of brand name drugs was recently published. If you’re unfamiliar, it’s a no-holds-barred look at drug pricing with experts’ decades-long perspectives.
This year’s edition is particularly welcome as we see the response to the IRA has matured and become more measurable. If you have the stomach for it, we suggest you read the report in full. If not…
Our Most-Highlighted Notes:
The gross-to-net price bubble is slowing compared to the last decade.
The gross-to-net price bubble is slowing compared to the last decade.
Why? List prices were higher, with substantial rebates and discounts offered to offset those high list prices. This potentially benefited providers and formulary placement.
Why? List prices were higher, with substantial rebates and discounts offered to offset those high list prices. This potentially benefited providers and formulary placement.
Today, list prices are lower. In part, this is helping manufacturers stay out of the crosshairs of future Medicare price negotiations (the IRA focuses on gross spending, thus the emphasis on the gross-to-net gap being closed by manufacturers)
Today, list prices are lower. In part, this is helping manufacturers stay out of the crosshairs of future Medicare price negotiations (the IRA focuses on gross spending, thus the emphasis on the gross-to-net gap being closed by manufacturers)
OWhat are we expecting?
What are we expecting?
Lower list prices – the IRA has completely reworked pricing strategies for manufacturers.
Lower list prices – the IRA has completely reworked pricing strategies for manufacturers.
Lower rebates for popular drugs — in February it’ll be clearer what’s up on the chopping block next.
Lower rebates for popular drugs — in February it’ll be clearer what’s up on the chopping block next.
Formulary adjustments and up-channel discussions to help organizations and providers prepare for significant disruption to reimbursement and their net costs.
Formulary adjustments and up-channel discussions to help organizations and providers prepare for significant disruption to reimbursement and their net costs.
Vista Helps Pharmacies, LTC, and
Infusion Centers Control Drug Costs
Vista Helps Pharmacies, LTC, and Infusion Centers Control Drug Costs
Are Tariffs Coming to Raise the Price of Generics?
If Medicare negotiations weren’t enough to cause ripple effects in the market, tariffs have the potential to increase the cost of generics, since a number of ingredients used in these drugs originate overseas.
High volume providers will face the brunt of this far more than independents, but will the pace of tariffs out-maneuver reimbursement adjustments?
If history is any indicator, it almost certainly will. Remember, we have already imposed trade tariffs on Chinese medical equipment.
If Medicare negotiations weren’t enough to cause ripple effects in the market, tariffs have the potential to increase the cost of generics, since a number of ingredients used in these drugs originate overseas.
High volume providers will face the brunt of this far more than independents, but will the pace of tariffs out-maneuver reimbursement adjustments?
If history is any indicator, it almost certainly will. Remember, we have already imposed trade tariffs on Chinese medical equipment.
Integrated specialty pharmacies pushing ‘gold bagging’
In great news for the specialty pharmacy sector, the term “gold bagging” has entered the chat. This modest adjustment to familiar bagging terms comes from the Health Systems Operated Specialty Pharmacy Alliance and aims to elevate the method of administering specialty drugs from within a single health system.
Some independent pharmacies and infusion centers might disagree. Some payers might also, especially those who prefer the lower cost claims often submitted by infusion centers that buy-and-bill or white bag.
So, is gold always better?
In great news for the specialty pharmacy sector, the term “gold bagging” has entered the chat. This modest adjustment to familiar bagging terms comes from the Health Systems Operated Specialty Pharmacy Alliance and aims to elevate the method of administering specialty drugs from within a single health system.
Some independent pharmacies and infusion centers might disagree. Some payers might also, especially those who prefer the lower cost claims often submitted by infusion centers that buy-and-bill or white bag.
So, is gold always better?
PBM Reform Continues to Build Momentum
PBM reform has been a hot topic that’s only getting hotter. The House Oversight Committee has taken aim at harmful practices, but the real news came on the 11th hour in December.
Part of the stopgap spending bill passed last year included new requirements for PBMs:
PBM reform has been a hot topic that’s only getting hotter. The House Oversight Committee has taken aim at harmful practices, but the real news came on the 11th hour in December.
Part of the stopgap spending bill passed last year included new requirements for PBMs:
100% of rebates to be passed to sponsors of prescription drug plans in Medicare and group health markets.
100% of rebates to be passed to sponsors of prescription drug plans in Medicare and group health markets.
Prohibits PBMs from billing Medicaid agencies and plans for more than they reimburse pharmacies.
Prohibits PBMs from billing Medicaid agencies and plans for more than they reimburse pharmacies.
PBMs now required to provide detailed data on drug spending to regulators and clients.
PBMs now required to provide detailed data on drug spending to regulators and clients.
Most of these are common-sense reforms many competing PBMs can get behind.
We look ahead into a year with a new administration at the helm that has been outspoken before about the role of PBMs, albeit more targeted at their role in Medicare drug pricing.
Will the middleman be knocked out, after all?
Most of these are common-sense reforms many competing PBMs can get behind.
We look ahead into a year with a new administration at the helm that has been outspoken before about the role of PBMs, albeit more targeted at their role in Medicare drug pricing.
Will the middleman be knocked out, after all?
Founded in 2018, VistaRx (Vista) provides comprehensive pharmacy data capture and management solutions for a variety of entities in the pharmacy value chain. We utilize custom-coded technology, strategies, and partnerships to help our clients improve operations and reduce dependence on third-party vendors.
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HOLLADAY, UT 84117
COPYRIGHT VISTARX 2024
Sign Up for Vista Insights and Updates
SUPPORT@VISTARX.COM
(385) 355-4882
2290 E 4500 S, STE 130
HOLLADAY, UT 84117
COPYRIGHT VISTARX 2024
Sign Up for Vista Insights and Updates
SUPPORT@VISTARX.COM
(385) 355-4882
2290 E 4500 S, STE 130
HOLLADAY, UT 84117
COPYRIGHT VISTARX 2024
