February

As a ‘Small Fish,’ Diplomat’s PBM Is Likely Not Alone in Its Woes

February 28, 2019

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 struggles with its PBM business. Some of the issues Diplomat is facing, experts tell AIS Health, are indicative of how difficult it is for smaller players to compete in a landscape where large, integrated companies now dominate.

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CVS Blames Industrywide Challenges for LTC Pharmacy Issues

February 28, 2019

Almost four years after CVS Health Corp. spent nearly $13 billion to acquire Omnicare, the long-term-care (LTC) pharmacy business attracted negative attention as a major contributor to “headwinds” in the company’s Feb. 20 report on fourth quarter and full-year 2018 financial results. “We certainly expected Omnicare performance to stabilize and improve,” CVS Health President and CEO Larry Merlo conceded during the earnings call that day.

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Payers Strive to Manage Rising Costs of Medical-Benefit Drugs

Magellan Rx Report Shows Increases in Commercial, Medicare Drug Spending

February 28, 2019

Driven in no small part by costly cancer treatments, both commercial and Medicare spending on drugs paid for through the medical benefit saw sizeable increases in 2017, according to a new report from Magellan Rx Management. Payers, though, are fighting back with both tried-and-true cost-management strategies and “next-level programs” like site-of-service management.

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Insurance Industry Is ‘Unstated Participant’ in Drug-Price Hearing

February 28, 2019

While the Senate Finance Committee’s Feb. 26 hearing on rising drug prices almost certainly wasn’t the most watched congressional hearing of the week, it attracted responses from America’s Health Insurance Plans (see brief, p. 7) and other industry stakeholders. At the same time, some Wall Street analysts found nothing surprising in watching major pharmaceutical manufacturers try to deflect blame, describing the situation as “manageable” for managed care organizations and PBMs.

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News Briefs

February 28, 2019

✦ The U.S. Supreme Court on Feb. 19 declined to review a federal appeals court ruling that struck down as unconstitutional Maryland’s law aimed at preventing price gouging by pharmaceutical companies. The Baltimore Sun said the law (H.B. 631) was the first of its kind in the nation, although other states have considered similar measures. Maryland enacted the law in 2017 after a series of high-profile price hikes by drugmakers, prohibiting “unconscionable” price hikes for essential drugs no longer covered by patents or generic drugs sold in the state. The law was challenged by the Association for Accessible Medicines, a trade group representing generic drug firms, which described the Supreme Court action as “a victory for patients who depend on a strong national market for generic and biosimilar medicines.”

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L.A. Care, Other Insurers Win Lawsuits Over Unpaid CSRs

February 25, 2019

Amid health insurers’ ongoing legal fight to recover billions of dollars in Affordable Care Act risk corridor payments, things remain up in the air over a related matter: whether insurers will recover a substantial sum from the federal government for unpaid cost-sharing reduction (CSR) reimbursement under the ACA. Several more insurers, including L.A. Care Health Plan, recently won lawsuits in the U.S. Court of Federal Claims to recover CSR payments — which had been distributed for several years to help exchange plans subsidize coverage costs for low-income enrollees, until President Trump halted them in October 2017.

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