Diplomat Pharmacy Inc.'s stock value plummeted recently after the company said it would delay the release of its fourth-quarter and full-year earnings results — primarily because of difficulties with its PBM business, AIS Health reported.

Diplomat entered the PBM space in 2017 when it acquired National Pharmaceutical Services and LDI Integrated Pharmacy Services. The company disclosed in a Feb. 22 press release that it anticipates writing down a "significant portion" of its PBM business' approximately $630 million in assets. It also said it is withdrawing its preliminary 2019 full-year earnings outlook, in part because it's seen "additional customer losses in its PBM business since early January," which combined with a "softer outlook for client wins and other factors" has led to a lower-than-expected outlook for its PBM business in 2019.

 

Topics: Industry Trends, Data & Analytics, Provider

After Highmark Health expanded from an insurer to an integrated delivery system, the organization decided it was uniquely positioned to launch a platform to test early-stage, FDA-approved medical innovations that were struggling to attain the evidence needed for widespread adoption — and, critically, insurance reimbursement, AIS Health reported.

Nearly four years later, Highmark Health Plan and its affiliate Allegheny Health Network have changed their policies and purchasing contracts to provide therapeutic innovations to members after gathering evidence on their effectiveness. Examples include HeartFlow, which can create a 3D model of coronary arteries and blockages, and FreeSpira, a digital therapeutic that reduces debilitating panic attacks.

 

Topics: Data & Analytics, Provider, Payer

Under the direction of its new governor, Democrat Gavin Newsom, California is planning to take control of the pharmacy benefit for all of the state's Medi-Cal beneficiaries — the vast majority of which currently have that part of their care administered by private insurers and their PBMs, AIS Health reported. What's more, the order directs state agencies to create bulk-purchasing arrangements for high-priority drugs and establish a framework for letting private businesses and insurers join the state’s buying pool.

The idea of the state's Medicaid program shifting to an entirely fee-for-service drug benefits system is already sparking worries about what it will do to PBMs' bottom lines.

 

Topics: Industry Trends, Provider, Payer

Nearly two weeks after the Trump administration issued a proposed rule that would effectively overhaul the prescription drug rebate system, the dust has still not settled in the PBM sector as firms brace for a seismic shift in how they do business, AIS Health reported.

The proposed rule would remove safe-harbor protections under the federal anti-kickback statute for rebates paid by drug manufacturers to PBMs, Part D plans and Medicaid managed care organizations. It would also create two new safe harbors: one for prescription drug discounts offered directly to patients, and one for fixed-fee service arrangements between drug manufacturers and PBMs.  

 

Topics: Industry Trends, Market Access, Provider, Payer

While a new federal proposal to overhaul the prescription drug rebate system may not be a significant threat to major managed care companies' bottom lines, it will likely be disruptive for insurers and PBMs alike, AIS Health reported.

The proposed rule would remove safe-harbor protections under the federal anti-kickback statute for rebates paid by drug manufacturers to PBMs, Part D plans and Medicaid managed care organizations. Instead, it would create two new safe harbors: one for prescription drug discounts offered directly to patients, and one for fixed-fee service arrangements between drug manufacturers and PBMs.

 

Topics: Industry Trends, Market Access, Provider, Payer

As states take a hard look at how they can reduce prescription drug spending in their Medicaid programs, they've put an already heavily scrutinized type of organization in their crosshairs: PBMs, AIS Health reported.

Ohio, for example, is forcing PBMs to abandon their current "spread pricing" models — in which PBMs pocket the difference between the amount they reimburse a pharmacy for a drug and the (usually higher) amount they charge a plan sponsor. Instead, they’ll move to a "pass-through" model, where PBMs will be paid an administrative fee by the Medicaid program and have to pay pharmacists the same amount that they bill the state for drugs, The Columbus Dispatch reported.

Topics: Industry Trends, Provider, Payer

Anthem, Inc. caused its stock to surge and Wall Street analysts to raise their 2019 and 2020 earnings estimates by revealing during its quarterly earnings call on Jan. 30 that it's planning to launch its in-house PBM three quarters earlier than it originally projected, AIS Health reported.

In its earnings release for the fourth quarter of 2018, the insurer said it will terminate its contract with Express Scripts Holding Co. on March 1, 2019, rather than the original expiration date of Dec. 31, 2019, because of Cigna Corp.'s acquisition of the PBM. Thus, Anthem expects to begin transitioning members to the new PBM platform, IngenioRx, in the second quarter of 2019.

 

Topics: Market Access, Provider, Payer

Under the direction of its new governor, Democrat Gavin Newsom, California is planning to take control of the pharmacy benefit for all of the state's Medi-Cal beneficiaries — the vast majority of which currently have that part of their care administered by private insurers and their PBMs, AIS Health reported. What's more, the order directs state agencies to create bulk-purchasing arrangements for high-priority drugs and establish a framework for letting private businesses and insurers join the state’s buying pool.

The idea of the state's Medicaid program shifting to an entirely fee-for-service drug benefits system is already sparking worries about what it will do to PBMs' bottom lines.

 

Topics: Industry Trends, Market Access, Provider, Payer

As they look to win over employer clients this year, PBMs should be prepared to face stiff competition and embrace emerging trends such as value-based formularies and rebate-free models, benefits consultants tell AIS Health.

"I've heard more interest about RFPs and going out, looking for or market-checking vendors than I have in a while — particularly on the PBM side," says Suzanne Taranto, a principal and consulting actuary for Milliman, Inc.

Topics: Industry Trends, Provider, Payer

As 2019 gets under way, public outrage over high prescription drug prices does not appear to have abated, especially in light of recent news reports indicating manufacturers are raising prices on hundreds of drugs this month, AIS Health reported.

Yet there are plenty of reasons why this concern over drug prices might not result in any significant legislative or regulatory action, experts tell AIS Health. And whatever does occur might benefit health plans and PBMs more than challenge them.

Topics: Specialty, Industry Trends, Provider, Payer