Are Insurers Prevailing Over Drug Makers?
Less than a year ago, it looked like health insurers were sending up trial balloons to see if they could get the federal government to regulate the research-based pharmaceutical industry as a utility. This was a reaction to high prices for new drugs like Sovaldi®. Today, the issue is being dialed back: Express Scripts, the largest pharmacy benefits manager in the U.S. initially refused to put Sovaldi® on its formulary. Now, it looks like both sides might have come to a businesslike accommodation: That taught Amgen and other drugmakers a lesson. Avoiding hostility with insurers and PBMs is now a paramount industry goal. “Every company is saying, ‘We don’t want to replicate what happened with Sovaldi. So let’s sit down and talk,’ ” says
Less than a year ago, it looked like health insurers were sending up trial balloons to see if they could get the federal government to regulate the research-based pharmaceutical industry as a utility. This was a reaction to high prices for new drugs like Sovaldi®. Today, the issue is being dialed back:
Express Scripts, the largest pharmacy benefits manager in the U.S. initially refused to put Sovaldi® on its formulary. Now, it looks like both sides might have come to a businesslike accommodation:
That taught Amgen and other drugmakers a lesson. Avoiding hostility with insurers and PBMs is now a paramount industry goal. “Every company is saying, ‘We don’t want to replicate what happened with Sovaldi. So let’s sit down and talk,’ ” says Steve Miller, chief medical officer of Express Scripts. “It’s very clear that it has changed the dynamic in the marketplace.” (Arlene Weintraub, “Big Pharma and Insurers Play Nice,” BloombergBusiness, May 28, 2015)
Insurers’ newfound power is extending beyond drugs for Hepatitis C and cancer:
With the aggressive pharmaceutical benefits manager Express Scripts lying in wait for two new cholesterol blockbuster contenders expected to debut this summer, the highly anticipated price war appears to already be well underway
The price war can be attributed to the Gilead effect. After Gilead released its revolutionary hep C drugs at jaw-dropping prices, Express Scripts and other payers have made it clear that they intend to press hard for lower prices, pitting drug manufacturers against each other whenever possible. (John Carroll, “The Gilead effect,” FierceBiotech, May 26, 2015)
The challenge is that these manufacturers are not making exactly the same drugs, so personalized medicine suffers if insurers and PBS just pit them against each other.
SOURCE: Health Policy Blog – Read entire story here.
