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www.fdanews.com/articles/196841-pharmacy-reimbursements-trail-behind-generic-price-hikes-analysis-finds

Pharmacy Reimbursements Trail Behind Generic Price Hikes, Analysis Finds

April 27, 2020

Pharmacy benefit manager (PBM) reimbursements to pharmacies have failed to keep up with price increases for generic drugs, according to an analysis by 3 Axis Advisors, a consulting group that tracks drug supply-chain inefficiencies and pricing.

The group looked at the prescription claims of nearly 1,400 pharmacies for 1,627 generic drugs from Jan. 1, 2018, to March 26, 2020, to assess the responsiveness of PBM reimbursements to price hikes.

3 Axis found that the top 50 prescription drug plans and their PBMs increased their reimbursement rates less than one-fifth of the time (16 percent) in response to generics that saw  price hikes of more than 50 percent.

Generic drug prices are at risk for rapid price increases during the COVID-19 pandemic because of reliance on Chinese and Indian manufacturing, stockpiling of generics that could potentially treat coronavirus, and temporary inventory depletions caused by a large shift from 30-day to 90-day prescriptions, the group said.

If any generic is proven viable as a COVID-19 treatment, there will be a surge in demand and price until more of the drug becomes available. Supply issues could persist if the price set by PBMs don’t keep pace with cost increases as retail pharmacies may have to dispense the drug at a loss or opt out of stocking it entirely, the group said.

“This is an unnecessary and avoidable economic problem that could inhibit necessary widespread access to potentially lifesaving COVID-19 treatments for patients across this country,” the group said.

Read the analysis here: www.fdanews.com/04-24-20-MAC.pdf. — James Miessler