New report reveals how PBMs distort and undermine specialty drug pricing guarantees
It's no secret. Prescription drug affordability is a serious challenge in the U.S.
And within that challenge is a small sliver of drugs that make up a disproportionate share of overall spending. That small sliver is typically referred to as "specialty drugs."
We are told that specialty drug prices are skyrocketing. We are counseled that, "Even though less than 2% of the population uses specialty drugs, those prescriptions account for a staggering 51% of total pharmacy spending." And we are charged with doing something about, “excessively high prices and price increases we see each year for specialty drugs."
Everywhere we look in the drug pricing world, everyone is talking about specialty drugs. Heck, many of the people reading this are probably still finishing unpacking from their trip to a big specialty drug conference last week.
So with specialty drugs being all the rage, it begs the question: What is a specialty drug?
In our latest drug pricing report, we investigate how the largest pharmacy benefit managers (PBMs) – the self-anointed saviors of high drug prices – categorize which drugs are "specialty," and then we analyzed how those definitions impact their typical pricing guarantees to plan sponsors.
In short, here's what we found:
Despite so much focus on "specialty drugs," the Big 3 PBMs only agree on which prescription NDCs are specialty about half the time.
Surprisingly, nearly 20% of the drugs designated by the Big 3 PBMS as specialty are generic drugs.
Within these PBM-designated specialty generics, the relatively recent market entrant Mark Cuban Cost Plus Drug Company already offers as much as 81% of those drugs.
With so many cheap generic drugs being thrown into the specialty bucket, it provides PBMs extensive latitude and flexibility to undermine their pricing guarantees on all medicines, as well as significant real estate to mark up select prescriptions.
Of course, there's a lot more to it than that, which is why we have a full report that digs into the weeds, as well as a new drug pricing visualization that we're dubbing The Super Special Drug Pricing Dashboard, where you can choose your own drug pricing reality based on the subjective calibration of that reality by the Big 3 PBMs.
We are still in the process up updating and refreshing a number of our dashboards at 46brooklyn over the next few weeks, and we're even going to be integrating even drug pricing data into our tools. But we're a small team, with an ocean to boil. If you're interested in supporting our work to bridge the gap between misunderstanding and understanding of prescription drug pricing, you can join our movement here.