Reprinted from DRUG BENEFIT NEWS, biweekly news and proven
cost management strategies for health plans, PBMs, pharma companies and
employers.
By Judy
Packer Tursman, Senior Reporter
May 5, 2017 Volume 18 Issue 9
While the ongoing public spat between giants Anthem Inc. and
Express Scripts Holding Co. has drawn attention (see story, p. 1), various
managed care companies have stressed the importance of evolving pharmacy
management practices — and pricing transparency — during first-quarter 2017
earnings calls.
Moreover, recent comments by some company executives on both the
pharmacy and health plan side raised the possibility of new arrangements and
deals. Aetna Inc. is in the midst of a long-term PBM services contract with CVS
Health Corp., for example, and both companies, which separately reported
earnings May 2, implied broad openness to new, unspecified transactions.
During Aetna’s first-quarter earnings call, Chairman and CEO Mark
Bertolini was asked to discuss how he would like to see his company’s
relationship with CVS evolve and the potential impact of any shuffling of PBM
alignments among Aetna’s competitors.
Bertolini replied that as Aetna approaches Jan. 1, 2020, its first
opportunity to consider renewing the CVS agreement, the Hartford, Conn.-based
insurer continues to explore what it can do within the contract and has “some
developments and conversations underway” concerning its Medicare and commercial
products.
Going forward, “the PBM relationship as a stand-alone model is a
troubled relationship,” Bertolini told investors, adding that, “As we look at
all the noise around drug pricing and [discounts], it is still our view that
drug pricing transparency’s incredibly important for all consumers.”
Aetna ‘Rethinks’ CVS Relationship
As Aetna continues talking to CVS about the direction of their
relationship, “we’re trying to fundamentally rethink how we could work closer
together” on the pharmacy side and “also on the local care delivery that could
go on in the community, given that CVS has 9,000 stores within 3 miles of 80%
of the American public,” Bertolini said.
“It has been our view that we need to get closer to home and
closer to community to help people with social determinants and other costs
that are based near their home, versus waiting for them to show up maybe once a
year at the doctor to get information about how they’re doing,” he said.
A Wall Street analyst asked what’s on the table now — and whether
Bertolini sees building out more retail provider capabilities in terms of CVS
acquiring those capabilities or having Aetna work with CVS through some type of
joint venture or partnership. “Still too early to tell. We’re in the midst of
those conversations with multiple players,” Bertolini replied.
Moments later in Aetna’s first-quarter earnings call, Shawn
Guertin, the insurer’s executive vice president and chief financial officer,
said, “the pharmacy story really continues to be one that’s all about specialty
pharma.” Specialty pharmacy is the primary cost-trend driver, now comprising
roughly 40% of costs despite comprising “a very low percentage” of scripts, he
said.
Plans Eye OOP Costs, Rebates, Pricing
Broadly speaking, analyst Ross Muken, senior managing director and
partner at Evercore ISI, tells AIS Health that he sees several themes emerging
from recent corporate earnings calls.
Aside from insurers’ significant focus on managing specialty
pharmacy costs, Muken says, the number of clients mulling early renewals is
increasing and PBMs including Express Scripts and CVS are becoming more
aggressive with early contract renewals, sometimes offering new financial terms
effective this year versus 2018.
Rebates also have notably increased for the 2018 selling season,
he says.
Adds Muken: “I think [there is] certainly a lot of focus on
out-of-pocket [OOP] costs, a lot of focus on net rebate trends and net pricing
overall.”
As for industry realignments, Muken speculates that CVS may be the
most viable player to capture Anthem’s pharmacy management business, with
Express Scripts possibly looking at mergers and acquisitions to regain members
post-Anthem.
View Aetna’s earnings at http://tinyurl.com/k5o5b2s.
https://aishealth.com/archive/ndbn050117-03?utm_source=Real%20Magnet&utm_medium=email&utm_campaign=112365254
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