Tag: PBM

Recon takes an analytical look behind select developments in healthcare

Two steps forward, one step back: an opinionated take on NEJM highlights for January 2018

Playing chess against cancer Tumors are not intelligent, but, because they have escaped mutational control, they constantly probe for mutations that will allow them to escape chemotherapeutic suppression. The epidermal growth factor receptor (EGFR) is a frequent driver of malignancy in the lung and as such, a target for EGFR inhibitors such as erlotinib (Tarceva, Roche) or gefitinib (Iressa, Astra Zeneca); unfortunately, tumors initially responsive to these agents quickly develop mutations which make them resistant. Osimertinib (Tagrisso, Astra Zeneca) was designed to overcome the most common resistance mutations and has

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A population health approach to value-based drug pricing

Working Paper   Summary Drug companies are naturally incentivized to price their drugs under assumptions of optimal clinical value, i.e. as high as possible.  Payers react to this by setting stringent conditions for patient eligibility for coverage of those therapies. As a consequence, patients who do not meet these conditions do not receive those drugs even though they could derive benefit, albeit not of a magnitude that would justify the cost.  Here we lay out a population health based scheme by which payers and drug companies can design a system

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Can drug companies make drugs, AND money?

In this morning’s New York Times (June 3,2014), Andrew Ross Sorkin asks,“DO drug companies make drugs, OR money”? That’s a fair question in the context of what I’ll call a “fee-for-product” reimbursement regime. Another way to look at this question is, “CAN drug companies make drugs, AND money”? Value has not been an easy sell As the U.S. healthcare services system moves from fee-for-service to a value-based system, the biotech and pharmaceutical (biopharma) industry should have an opportunity to capture more of the value it creates. But with drug costs only ~10%

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ESRX-MHS Part 2: mail facility speculations (…or: Indulging my Inner SWAGer)

Summary ESRX was running at close to maximum capacity at its mail facilities while MHS has room to spare. ESRX is facing a scenario of significantly increased demand as greater mail penetration is achieved in the Wellpoint book and lacked the capacity to meet this demand. Similarly, ESRX would not be able to meet increased demand from reform coverage expansion. By combining, ESRX avoided having to build a new facility and the combined entity appears to have enough capacity to close at least one older mail facility. Given that a

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ESRX-MHS Part 1: Last stand of the PBM pure play: observations on the Medco-Express combination

UNH’s decision to take the commercial PBM business in-house did not force MHS into ESRX’s arms: I would argue that it removed the major roadblock to what the companies wanted to do anyway. MHS and ESRX had been talking about a merger off and on for few years (per WSJ reporting) and the logic (laid out below) is compelling but FTC concerns must have kept getting in the way. UNH’s decision doubled the size of its PBM subsidiary in terms of lives (somewhat less in terms of scripts because the

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