Drug price increases have slowed, but new analysis shows launch prices pushing costs into orbit

Drug price increases have slowed, but new analysis shows launch prices pushing costs into orbit

Recent reports have demonstrated that brand-name medication prices are not increasing at the same rate as prior years. We’ve highlighted similar trends in our digging as well. While slowing list price increases can be helpful, and certainly understandable given the amount of coverage drug prices have gotten over the previous year, it misses one of the key points within the brand drug marketplace. Brand-name drug cost pressures have less and less to do with year-over-year price increases and more to do with the launch prices of new brand name medications when they initially come to market.

So naturally, we saw an opportunity for a visualization to shed some light on launch prices. This report introduces the latest visualization added to the 46brooklyn toolkit - the 46brooklyn Drug Pricing Launchpad. Spoiler alert! Brand-name drug launch prices are rising aggressively. This is a problem for sure, but why its a problem may surprise you. This report will take you on a journey through the lifecycle of a drug, and illustrate how high pre-rebate list prices on brand-name drugs today become a profit opportunity for the supply chain off generic drugs in the future.

The hidden midyear 2019 price increases on brand name drugs

The hidden midyear 2019 price increases on brand name drugs

This summer, there was extensive media coverage on a large number of price increases on brand-name prescription drugs. However, when we examined CMS National Average Drug Acquisition Cost (NADAC) drug pricing data, we noticed that there were not many price increases at all. We had a hunch that the NADAC file must have been missing some of the price increases, so we dug into the data and discovered that it was missing prices on hundreds of drugs – many of which are specialty drugs. This report examines the limitations of our favorite publicly-available drug pricing benchmark, and how that benchmark can be improved to provide even better accountability to the drug supply chain.

New Medicare Part D 'Ski Slope' shows seniors' wild drug pricing ride

New Medicare Part D 'Ski Slope' shows seniors' wild drug pricing ride

It’s the middle of July. A time of year for pool parties, barbecues, campfires. and generally sweating your butt off. It’s a relaxing time of year for the majority of us. But what about the ski bums out there? It’s a long six months (five if you are lucky) until the first big dump of the year. At 46brooklyn, we sympathize with people who are impatiently waiting for things – except rather than waiting to shred the gnar, we’ve been anxiously waiting to shred through Medicare Part D drug pricing data. Good news, drug pricing enthusiasts; we have a big (data) dump for you! After months of work on our newest drug pricing tool, we are pleased to release the new Medicare Part D Drug Pricing Ski Slope dashboard. In this viz, we give you the ability to select one of many drugs (brand and generic, oral solid and non-oral solid), and view the price set by thousands of Part D plans for your selected drug. For good measure, we added a line to show you the true market-based cost of the drug (based on NADAC), so you can see how frustratingly random Part D pricing is by different plans for the same drug. So get your balaclava on and join us as we traverse the Part D drug pricing slopes.

New drug pricing analysis reveals where PBMs and pharmacies make their money

New drug pricing analysis reveals where PBMs and pharmacies make their money

For the first time in our existence, CMS has released drug pricing data that overlaps with the date of our launch. As we ripped open the data and examined CMS’ gift, we found some major changes in the way that the state of Ohio reported their data – and it has revealed some eye-opening information about PBM and pharmacy margins on prescription drugs. Given all the drug pricing noise out of Ohio, and the federal heat on PBM “spread pricing,” we decided to do a deep dive into what’s happening in Ohio, and how its new data provides incredible clues to determine where the money flows within the drug supply chain.

New CMS Medicaid drug pricing data released with stunning findings

New CMS Medicaid drug pricing data released with stunning findings

Recently, CMS updated their State Utilization databases, which provides quarterly drug pricing data that shows what state Medicaid programs are spending on prescription drugs. This most recent data update ended up filling in most of the Q2 2018 potholes and extended the 2018 data to include large portions of the third quarter. We have updated all of our dashboards that rely on this dataset, rolling all of them forward to Q3 2018, and there are some insightful takeaways. This update is a really big deal for us at 46brooklyn, because it is the first time that a dataset’s timing will overlap with our existence as an organization. With our launch in August 2018, this meant that CMS’ latest utilization data update for Q3 2018 would be the first real quarter of data that could have been theoretically impacted by our work and Ohio’s work to bring transparency to drug pricing in state Medicaid programs and beyond. After analyzing the data, the results are nothing short of amazing, and a clear indication that this system is in the midst of change. Here’s our insights.

D is for Distortion: Medicare Part D's $2 Billion Problem

D is for Distortion: Medicare Part D's $2 Billion Problem

Over the last nine months we have sliced and diced generic drug pricing within Medicaid managed care to arrive at the conclusion that generic prices in Medicaid are subject to wild and seemingly arbitrary distortions. But the million dollar (or should we say $2 billion dollar) question is whether this problem is isolated to Medicaid, or if it is a broader issue plaguing Medicare Part D and Commercial plans as well? We now attempt to bring data into the fold to help answer this question. In this report, we embark on an in depth investigation into the pricing of the top 15 generic drugs in Medicare Part D - drugs that represented roughly a third of overall Part D generic spending in 2017. It turns out that the same arbitrary generic pricing behavior we have observed in Medicaid is alive and well within Part D. If you make it all the way to this report, you will be rewarded with all the math that estimates this problem to be worth over $2 billion in 2017. 

The Medicaid Markup Galaxies: Discover which drug markups are out of this world

The Medicaid Markup Galaxies: Discover which drug markups are out of this world

A few months ago, we released our Medicaid Markup Universe that collects all generic drugs dispensed within different state Medicaid programs and displays each as a bubble. The larger the bubble, the greater the cost the state is paying for that drug relative to its acquisition cost (i.e. “markup”). While that dashboard provides a good qualitative feel for individual drug pricing distortions, it doesn’t help quantify the distortions. To better identify those distortions in each Medicaid program, we designed a new visualization that drills down to three different groups (or celestially-speaking, “galaxies”) within the universe. We call them the High-Cost, In-Range, and Low-Cost galaxies. Our newest dashboard, the Medicaid Markup Galaxies, shows which drugs state Medicaid programs may be underpaying for, and perhaps more importantly, which drugs they may be overpaying for.

A new (free) tool to help track drug price changes

A new (free) tool to help track drug price changes

The start of each new year brings a lot of “new-ness,” including a new round of price increases on brand-name drugs. This year has been no exception, and the media has been all over the subject. Unfortunately, we’ve found it difficult to figure out the “so what?” behind all of these price increases. On one hand, we are being told that the pharmaceutical manufacturers are back to “business as usual,” while on the other we are being told that the number of price increases are down meaningfully from last year. Which one is it? This felt like an opportunity to inject a healthy dose of facts into this discussion. So we set out to build a dashboard, 46brooklyn’s Brand Drug Price Change Box Score, that lets you visualize all brand-name manufacturer list price changes that are publicly-reported each week, drill down to the manufacturer and drug level, strength level, and compare and contrast different periods.

Inside AWP: The arbitrary pricing benchmark used to pay for prescription drugs

Inside AWP: The arbitrary pricing benchmark used to pay for prescription drugs

Average Wholesale Price (AWP) is a meaningless benchmark price for generic drugs.  This has been known for at least a decade, if not longer.  But despite its lack of substance, AWP-based payment models just won't go away.  Unfortunately the contractual reliance on a benchmark that has no relevance to actual price makes it very difficult for the payer to know if they are getting a good deal or not.  They are left to pay a fixed discount off of an unknown combination of meaningless, non-market-based, numbers. Seems like that would be tough sell, but this is drug pricing we are talking about, so of course, it's the norm. For the past couple months, we compiled data to create a visualization to help illustrate the problem that arises by anchoring generic drug costs to AWP.  The finished product is embedded in this latest report "Inside AWP: The Arbitrary Pricing Benchmark Used to Pay for Prescription Drugs," along with our observations and analysis.

Examining high drug markups: Introducing the Top 20 over $20

Examining high drug markups: Introducing the Top 20 over $20

We’re told that drug prices are too high, but who actually is setting the price and where does the money end up going? CMS recently updated their State Utilization databases, which track what state Medicaid programs are being charged for prescription drugs. Most notably, they extended the 2018 data to include the second quarter. We have updated our datasets and visualizations to track the changes in drug markups relative to their actual costs. We’ve studied up and have come up with our “Top 20 over $20” list. In other words, the top 20 drugs dispensed through Medicaid managed care organizations (MCOs) with a markup in of over $20 per prescription. Think of it as a “top 40 under 40” list for generic drugs, with the main difference being that no self-respecting generic drug wants to be on this list. Check out our new visualization that highlights the drugs that are busting the budgets of state Medicaid programs.