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1rem

Trump raises the import tax to 25% on the former—while restoring the latter to 25%—in a move that could potentially take effect on March 4. 

United States Elevates Tariffs on Steel and Aluminum

Finding the optimal balance in pharmacy benefit manager reform.


Rebates or Patients?

A look at the actionable steps needed to elicit change.


Popping the Gross-to-Net Bubble, Part II: What Manufacturers Can Do About It

These medications are used to treat a multitude of conditions including type 2 diabetes, cancer and asthma.

Headlined by Ozempic, Medicare Reveals Second Round of Drugs Selected for Price Negotiations

CVS Caremark, Express Scripts, OptumRx made more than $7.3 billion in revenue, with markups as high as thousands of percent. 

FTC Report Finds Big Three PBM Mark Ups for Specialty Generics Generated Billions

The Rundown on Rebates

, Ed Schoonveld, value & access advisor for Schoonveld Advisory and author of 

, points out that the latest 15 drugs chosen for price negotiations under Medicare Part Dare not "negotiations" but rather government-mandated price reductions, based on a percentage discount determined by how far a drug is beyond its patent expiration. While the government has shown restraint in previous rounds, it’s expected that as more drugs are added to the list, Medicare pricing will experience a significant impact.

In this round, weight loss drugs like Ozempic, which have proven effective in managing diabetes, controlling HbA1c, and providing cardiovascular benefits, are included. However, these drugs are not yet approved for weight loss in Medicare patients, so their future role remains uncertain. While this could significantly affect Medicare pricing, Schoonveld notes that the private market is unlikely to be directly impacted by these changes in the short term. The government, however, influences physician fees for Medicare patients, which tend to be lower than those charged for privately-insured patients. This dynamic has led to the private sector subsidizing Medicare patients through premiums.

This trend may extend to drug pricing, where companies might raise prices in the private market to compensate for the government-mandated discounts in Medicare. Such changes could further strain the private sector, especially as employers and insurers are already expressing concerns about rising premiums and drug costs. Additionally, there is ongoing debate around potential restrictions on drug rebates, further complicating the financial landscape for both private insurers and consumers.

Schoonveld also offers a teaser on what to expect in his upcoming February “Value and Access” column.

What can readers expect from you February column?

 So my next column is going to talk about rebates. It's going to talk a little bit about, why are rebates bad? Why else would drug price controlling by the government be better? What are some of the drawbacks? What have we learned from some of the systems around the world? What are some of the drawbacks of that, and what are the points that we need to keep an eye on? What should be the focus of those programs, to make sure that we are keeping the patient in mind?

In the final part of his video interview with Pharma Commerce Editor Nicholas Saraceno, Ed Schoonveld value & access advisor for Schoonveld Advisory and author of The Price of Global Health, previews his upcoming February column.

What Round II of Medicare Part D Drug Prices Signify for the Pharma Industry

With the Centers for Medicare & Medicaid Services (CMS) recently revealing its choices for the 15 latest drugs to be covered under Medicare Part D for the second cycle of price negotiations, what does this mean for future drug prices? What implications does this have for the private market?

 Well, they're not negotiations. That's the first part. Let's be very clear. This is a law that allows the government to basically dictate a percentage discount off the drug price, depending on how far this beyond patent expiration. Now the government has shown some restraint in the last round. I think we wanted to be careful not to maybe rock the boat too much. I expect over time—as more drugs are entering—this can have a substantial impact on the Medicare pricing. That's the goal, of course, as well. 

Now, in the current round, we're going to add 15 drugs. The next couple of rounds are going to be 15 drugs added. Of course, what you see here is that the weight loss drugs are added to the game. Ozempic is one of them. These drugs have clearly shown to be very good in helping diabetes patients with insulin, HbA1c control, and cardiovascular benefits as well, along with weight loss. Now, it's not approved for weight loss for Medicare patients, so that's something that we need to keep an eye on. We don't know where that's going to go. This is obviously a very big drug for Medicare, but also beyond Medicare.

It not going to influence the private market for now, because the private market is not at least directly influenced by this. So the question is, what's going to happen there? And interestingly, actually, if you do take a step back, Medicare fees for physicians are also dictated by the government—and they tend to be quite a bit lower than the commercial fees that are being charged for privately-insured patients—so the private industry is subsidizing Medicare patients beyond the normal Medicare premiums that everybody is paying. I expected something like that will happen here as well. 

It’s got to come from somewhere, so it will be required for companies if they want to market the drug successfully, to charge a little bit more in the private market to be able to afford these discounts in the in the Medicare market. That's a very sensitive topic, because nobody wants to pay more. The question is, what does it mean for the private market? If the budget or the willingness to pay is going to be even more difficult because insurance companies and employers are already complaining about the amount of money that you spend on premiums, the price of drugs, etc. We saw actually that at the end of last year, as part of a potential bipartisan government funding bill, the rebates were going to be handled. I don’t know exactly what the content was, but there were going to be some limitations on that.

In the first part of his video interview with Pharma Commerce Editor Nicholas Saraceno, Ed Schoonveld, value & access advisor for Schoonveld Advisory and author of The Price of Global Health, comments on the future implications of the latest CMS drug price negotiations.

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