List price increases account for 48% of real US pharma sales growth since 1980, and roughly ½ of global returns to R&D spending since 1990. More recently eroding mix has compounded reliance on real pricing, which drove 145% of real
On Thursday, the European Union cut its 2012 real GDP growth forecast to just 0.5% – down nearly 70 percent from its 1.9% projection just six months ago. Ominously, the EU added that “the probability of a more protracted period
Using Medco (MHS) as a proxy for large PBMs, we show that generic buying margins dominate PBM gross profits; PBMs appear to have sacrificed most (or even all) alternative sources of gross margin, levering the industry’s pricing structure almost completely
This note compares the two drug acquisition cost benchmarks (Average Manufacturer Price or AMP, and National Average Drug Acquisition Cost or NADAC) that CMS intends to make public. NADAC values have not been calculated or published; however because Alabama’s Average
Generic dispensing (i.e. gross) margins are far higher than branded dispensing margins throughout the drug trades (wholesalers, retailers, and PBMs). In our view this is primarily due to the traditional use of average wholesale price (AWP) as a benchmark for
On August 4, 2011 CMS hosted a meeting to update external stakeholders on the status of the implementation and roll-out of the national actual acquisition cost (AAC) survey, the existence of which Secretary Sebelius first revealed in a letter to
We update and summarize our PBM bear case in light of ESRX’ bid for MHS Generic dispensing margins (est. $9.01 / Rx) should fall toward brand levels (est. $5.77 / Rx) if average wholesale price (AWP) is replaced by a
Plan sponsors’ (e.g. employers’) contracts with PBMs specify how much the sponsor pays for each prescription handled; plan sponsors’ payments to PBMs typically are determined as a function of the average wholesale price (AWP) of each prescription For brand drugs,
CMS confirmed to us their intention to publish average manufacturer price (AMP) data to the general public; this is in addition to Secretary Sebelius’ February 2011 commitment to provide average acquisition cost (AAC) survey data to the states We analyze
For the first time, because of growth in both rebate percentages and brand drug prices, rebates paid for preferred formulary status now appear to roughly equal the spread in non-preferred (e.g. tier 3) and preferred (e.g. tier 2) co-pays Co-pay
