Radar on Drug Benefits

Mark Cuban Cost Plus Drug Company (MCCPDC) launched its online, generic-dispensing pharmacy on Jan. 19, becoming the latest entrant into a burgeoning market of prescription drug retailers that operate independent of traditional pharmacy benefits. Health care insiders say that the amount of activity in the emerging segment is encouraging, but they add that no one player is likely to become dominant in the space.

MCCPDC, a discount prescription drug startup launched by venture capitalist and Dallas Mavericks owner Mark Cuban, now operates an online pharmacy that sells directly to consumers and does not accept insurance. MCCPDC CEO Alex Oshmyansky, M.D., Ph.D., told AIS Health, a division of MMIT, in October that the firm is registered as a pharmaceutical wholesaler with the FDA.

In January 2021, the outgoing Trump administration approved a Medicaid waiver that would have allowed Tennessee to do something novel: implement a “commercial-style” closed drug formulary while still receiving statutory Medicaid rebates for covered drugs. In the year that’s followed, however, it has become clear that the demonstration program faces long odds regarding whether it will ever actually be implemented.

First, the waiver program — known as TennCare III — is the subject of a lawsuit filed in April 2021 by the National Health Law Program, the Tennessee Justice Center and King & Spalding LLP on behalf of Tennessee Medicaid enrollees. The lawsuit challenges the demonstration program on procedural grounds, arguing that the Trump administration did not provide the required public comment period when it approved Tennessee’s waiver, and on substantive grounds, saying CMS exceeded its authority under Section 1115 of the Medicaid statute in approving the waiver.

Under the Biden administration, federal drug regulators have homed in on misleading or imbalanced claims on social media, and early evidence shows those efforts will be a key focus in 2022. According to legal experts, pharmaceutical companies and medical device manufacturers that turn to influencers, celebrities and popular social media channels to promote their products should heed compliance warnings.

The FDA, through its Office of Prescription Drug Promotion (OPDP), issued six enforcement letters — two warning letters and four untitled letters — to pharmaceutical companies in 2021. While drugmakers continue to operate in an era of relatively low-volume enforcement (the FDA also issued six enforcement letters in 2020, down from more than 50 warnings a decade before) the areas of focus are evolving, according to a Jan. 25 webinar hosted by law firm King & Spalding LLP.

While the average price that pharmacies pay for a common hepatitis B treatment has seen a steep drop as more generics entered the market, the list price for the drug — which helps determine patient cost sharing — has stayed stubbornly high, according to new research published in JAMA. The study’s authors say their findings “highlight the need for policies that improve transparency around generic drug financing and pharmaceutical benefit manager practices,” but one industry expert points out that there are also private-sector solutions to the problem arising.

“In my view, the high out of pocket costs for entecavir and other generics is something that, given Good­Rx and companies like it…patients can do something about themselves directly, bypassing their PBM and pharmacy benefits altogether,” says Elan Rubinstein, Pharm.D., principal of EB Rubinstein Associates. GoodRx, which went public in 2020, offers an app-based drug price comparison tool, aggregates drug coupons and contracts with several PBMs, which allows the firm to offer patients the cheapest price for a drug among its partners’ negotiated network rates.