CVS To Shift To Simpler Model For Pricing Prescription Drugs
The Wall Street Journal reports that CVS will move away from complex formulas and instead set prices based on the amount it pays for drugs, plus a small markup and flat fee. A change by the nation's largest drugstore chain to a "cost-plus" pricing model would likely shake up the pharmacy industry.
The Wall Street Journal:
Exclusive: CVS Plans To Overhaul How Much Drugs Cost
CVS Health, the nation’s largest drugstore chain, will move away from the complex formulas used to set the prices of the prescription drugs it sells, shifting to a simpler model that could upend how American pharmacies are paid. Under the plan, CVS’s roughly 9,500 retail pharmacies will get reimbursed by pharmacy-benefit managers and other payers based on the amount that CVS paid for the drugs, in addition to a limited markup and a flat fee to cover the services involved in handling and dispensing the prescriptions. Today, pharmacies are generally paid using complex measures that aren’t directly based on what they spent to purchase specific drugs. (Mathews, 12/5)
In other news about pharmaceutical prices and development —
Axios:
Study Finds Sharp Drop In FDA Inspections Since Pandemic Began
Food and Drug Administration inspections of drug manufacturing facilities in the U.S. and abroad dropped well below pre-pandemic levels between 2020 and 2022, according to a new study in Health Affairs. The findings are further evidence of a fragile global drug supply chain at a time when some critical medicines are in short supply. Some of the squeeze was due to inspections that took overseas facilities offline because of safety concerns. (Reed, 12/5)
Axios:
House Oversight Committee Investigating FDA's Handling Of Phenylephrine
Republicans on a House oversight panel will investigate the Food and Drug Administration's handling of a common decongestant ingredient that the agency recently concluded was ineffective, the committee told Axios first. The inquiry, the latest in an aggressive investigative agenda by House Republicans, seeks to understand why the FDA didn't take earlier action against a wide range of over-the-counter cough and cold drugs that accounted for nearly $1.8 billion in sales last year. (Reed, 12/4)
Stat:
Chemotherapy Shortages Won’t Get Better Under Biden’s Latest Plan
President Biden’s new plan to curb drug shortages by boosting domestic drug production won’t expand the supply of the chemotherapies that are currently in shortage, an administration official confirmed. The limited scope surprised experts, who told STAT Biden could have included those drugs in the effort. (Wilkerson, 12/5)
Bloomberg:
The Pentagon Wants to Root Out Shoddy Drugs. The FDA Is In Its Way.
One morning in October, US Army Colonel Victor Suarez finished his usual morning workout — a 32-mile bike ride — and then sat down in his home office in Frederick, Maryland. When he opened his email, his stomach dropped. Suarez spent his career getting medicines to military hospitals and combat troops, including those in Iraq and Afghanistan. He had recently sought out an independent lab to assess the quality of those drugs, in large part because he doubted the US Food and Drug Administration’s ability to police a supply chain now dominated by low-cost manufacturers in India and China. His inbox offered a glimpse of the first batch of test results. (Edney and Griffin, 12/5)
Stat:
FDA Needs Staff Influx To Meet Gene Therapy Needs, Marks Says
The Food and Drug Administration needs dozens more reviewers if it wants its so-called Operation Warp Speed for rare disease therapies to take off, the agency’s biologics chief said Monday. (Owermohle, 12/4)
