Direct-to-consumer: New avenue for PBMs could provide political shelter

Departing from their traditional role working for payers as third-party administrators of prescription drug coverage, two of the largest pharmacy benefit managers are taking a direct-to-consumer approach through drug discount programs.

The discount cards (also known as consumer cards, point-of-sales cards, or 100 percent copay cards) bypass the payers that PBMs typically serve, disrupting the usual drug supply chain. The departure from business as usual also indicates that PBMs aim to do whatever it takes to keep from being the poster child for escalating drug prices.

The programs target the underinsured, uninsured, and those with high cost-sharing prescription drug coverage. They encourage insured patients to compare prices using their insurance cards with prices using discount cards.

CVS Health and Express Scripts have initiated new discount programs, ReduceRx and InsideRx respectively. Notably, both are targeting consumers of insulin products, which seem a likely audience given the furor over the pricing of EpiPen in 2016. During Congressional hearings in the fall of last year, Mylan Pharmaceuticals officials, facing sharp criticism, pointed to PBM rebates as one of the factors contributing to the sharply increased price of EpiPen, echoing the critics who maintain that rebates inflate drug prices artificially.

CVS/caremark’s ReduceRx, launched in May 2017, is designed for consumers who are uninsured or facing high out-of-pocket costs. Only Novo Nordisk is currently collaborating in ReduceRx. Through ReduceRx, Novo’s insulin brands Novolin R, Novolin N, and Novolin 70/30 will be available at a cost of $25 per 10ml vial, reflecting a potential savings of around $100 each for cash-paying patients. The median retail price of these vials is around $165, according to the American Diabetes Association.

ReduceRx cards are network-specific and can be used to purchase drugs from more than 67,000 pharmacies in the CVS/caremark retail network, including 9,700 CVS/pharmacy locations. Consumers will need to pay for out-of-pocket costs for the drug and this program cannot be paired with any prescription drug insurance coverage. CVS Health plans to extend this program to other drugs. CVS Health has also announced that generic version of Adrenaclick, an alternative to EpiPen, will be available at $109.99 regardless of insurance and before a possible $100-off manufacturer coupon.

Express Scripts launched an insulin discount program in partnership with Eli Lilly and New York-based tech startup Blink Health in December 2016. Patients can order diabetes drugs such as Humalog, Humulin, and Basaglar at discounted price through Blink’s online platform and pick the same from any participating pharmacy, including Walgreens, CVS/pharmacy, or Rite Aid using a Blink card. The partnership offers a potential 40 percent discount off the retail price of most insulin products made by Lilly. Blink Health has also collaborated with Arbor Pharmaceuticals on Blink Health Arbor Patient Access Program to offer up to a 50 percent discount on multiple Arbor-branded hypertension drugs effective January 2017 at more than 67,000 local pharmacies nationwide.

More recently, Express Scripts partnered with the online discount card company GoodRx to launch InsideRx. The program aims to reduce the cost of more than 40 popular branded drugs by an average of 34 percent off the retail price, including prescribed drugs for diabetes, heart disease, depression, and asthma. This partnership uses coupons accessible from a mobile app at 40,000 participating retail pharmacies such as CVS/pharmacy, Kroger, and Walgreens. Under InsideRx programs, Nexium is available at a 52 percent discount. Both Humalog and Humulin are available at a more than 40 percent discount. The cross-industry collaboration includes Boehringer Ingelheim, Eli Lilly and Co., Lundbeck, Novo Nordisk, Sanofi, Takeda Pharmaceuticals, and Teva Pharmaceuticals. InsideRx is not applicable for Medicare and Medicaid.

The timing of these programs makes sense for PBMs. As the debate over the ACA and AHCA rages, it’s likely that the cost of prescription drugs is going to rise and the role of PBMs in the market stream will continue to draw criticism. Given the focus on making drugs more accessible for those who can afford them the least, PBMs and their pharma partners can point to these programs as their effort to do their part for the common good. On a practical level, regulatory and legislative change is coming and now is a good time to be seen as part of the solution.

Even more pragmatically, it’s likely that changes to the ACA or the passage of the AHCA will mean uninsured rates will climb and creating a channel to connect with those consumers also makes sense. Such programs also could serve as a model for programs offered by PBMs to employers. Regardless of the legislative outcome, these programs are a trend worth watching.

About Health Plan Analysis

DRG’s Health Plan Analysis explores pharmacy benefit, provider contracting, and product trends through actionable industry insight and key enrollment data across the United States, including Commercial, Exchanges, Medicare, and Medicaid markets. Find out more: Health Plan Analysis.

About Managed Markets Surveyor

DRG’s Managed Market Surveyor delivers benefit enrollment data by managed care organization and at multiple geographic levels to better inform strategic planning and resource allocation. Find out more: MMS and MMS-Rx.

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DRG’s Market Overview reports provide expert analysis of key healthcare players and market drivers in the 87 most dynamic US metro areas. Find out more: Market Overviews.

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Author: wmcerda

I am the founder and medical director of Drug Test Exit since 2003. A former physician in drug test, I am known as the "Pioneer of Drug Test Care" with expertise in travel medicine, sports medicine, and diving medicine. I have provided drug test services in many sports events, competitions, and championships and have handled large corporate events throughout the United States, United Kingdom, South Africa and around the world. Served as an Olympic drug text specialist for 8 years, I am also the medical doctor for many leading sports channel and takes care of many high profile athletes. getpocket

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