What does disruptive change to the existing pharma pricing model look like? Last week, we published a report outlining four potential scenarios for altering the existing rebate-based price system. This week Alex Azar’s interview with Bloomberg suggested that HHS may be setting its sights on option #3: Reforming (not replacing) the existing rebate system. We expect this would 1) require PBMs to pass all manufacturer discounts and fees to the payor and patient and 2) require that PBMs and distributors move from WAC-based compensation models to fixed-fee based models.
- Within our A World Without Rebates: Updated Analysis + Industry Response report we highlight four potential outcomes and calculate the financial implications on PBMs, distributors and pharmacies – we size the potential savings across the 7 largest participants at ~$2.5bn, or 62bp of gross expenditures (99bp of net expenditures).
- Within our Trump Pharma Pricing Blueprint: Actions, Comments & Expectations report, we provide a scorecard for tracking the Trump administration’s actions relative its stated goals – to date the administration has taken action on 14 of 32 opportunities included in the President’s Blueprint – we expect to see more action on this wish list in advance of the mid-terms.
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