Albert Thigpen, co-founder, Talentwise Consulting, discusses the valuable buckets pertaining to the PBM space.
In a video interview with Pharma Commerce, Albert Thigpen, co-founder, Talentwise Consulting, discussed how the panel on “Playing the Chess Endgame–Healthcare Policies Targeting Drug Commercialization” underscored the complexities of implementing the Inflation Reduction Act (IRA), predicting significant challenges for stakeholders like retail pharmacies, payers, and pharmacy benefit managers. They highlighted concerns about the unintended consequences of negotiated maximum fair prices (MFPs), particularly on the generics industry and oncology drug distribution, which could complicate decisions for companies and affect in-office dispensing practices. Overall, the panelists noted that the IRA's intricate framework might lead to unforeseen difficulties in the healthcare landscape.
Thigpen also emphasized the importance of taking a long-term and measured perspective for manufacturers when it comes to strategic approaches to pricing and commercialization in light of future US. healthcare policies. He noted that, similar to the evolving landscape of Medicare Part D over the past 20 years, the Inflation Reduction Act (IRA) will also undergo significant changes. Manufacturers should prepare for initial challenges and be ready to reassess their strategies annually, adapting to new rules and market dynamics as they emerge. This approach may involve delaying product launches or adjusting commercialization tactics based on negotiated MFPs and market conditions, akin to the strategies seen with AbbVie and Humira. Beyond that, Thigpen dove into key trends impacting the pharmacy benefit management and specialty pharmacy spaces, while providing a crash course on retail consumerism.
A transcript of Thigpen’s conversation with PC can be found below.
PC: Could you describe some of the key trends that are impacting the pharmacy benefit management space?
Thigpen: I think there are a couple of things. I think regarding the PBM benefit by itself, you have split it into two buckets. I view the PBM benefit of the vertically integrated companies very differently than the PBM benefit of a non-vertically integrated company. Just to be clear on what those are, the vertically integrated companies are those that are also tied to a rather large insurance carrier: UnitedHealthcare and OptumRx has integrated; Cigna and Express Scripts have integrated; Aetna and CVS are integrated; the true vertically integrated companies that do that, they view that very differently.
The pharmacy benefit continues to be our first line of defense for treating disease states across the board. I'm a pharmacist by training, and I love the pharmacy benefit, but it has become incredibly commoditized over the course of the years, but it's also a very valuable piece of the healthcare benefit architecture. Those vertically integrated companies, specifically in the government space, have figured out a way where they can lose money in the pharmacy benefit, but also be much more profitable in the medical space. A company like United, for example, can say, “hey Nico, I'm going to cover you as your medical carrier and also provide your prescription drug coverage through OptumRx. The premiums I'm charging you, in total, I could actually do quite well onm even though I may not be doing quite well on the pharmacy side.” Those vertically integrated companies have the ability to manage to spend very differently than a standalone PBM that is just out there, only surviving and trying to operate their business on prescription benefit drugs alone.
I think that on the surface, those two business models had very different mechanics in their trends by themselves. I think overall, cost continues to decline in general. There are still a ton of generics that continue to be very important to the pharmacy benefit. Specialty continues to be a large driver of the spend. More drugs are in the FDA pipeline that are specialty and/or rare orphan, ultra-orphan drugs that are incredibly expensive across the board. How we figure out the best coverage mechanisms for specialty, biosimilars, rare orphan, ultra orphan—these are key issues and trends that everyone is focused on. Then I would say, just as another benefit design trend, is that the cash markets continue to thrive here. Bill Roth alluded to it in his opening comments that companies like GoodRx or Mark Cuban’s Cost Plus Drugs and the like, are there for a reason. The cost or the cash pay marketplace is important because you can get drugs pretty affordable through a cash benefit, much cheaper than sometimes your drug benefit that is covered, which is something that is going to continue to rise. It plays into the knowledge and the power of the consumer, and ultimately what’s best for them.
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