Spotlight on Market Access

While many retail pharmacies are backing off from their provider group subsidiaries, private-equity groups continue to invest in the space, activity that is likely to continue under the new administration. Roll-up mergers have been of great interest to drug wholesalers, which have become almost as vertically integrated as the major PBM/insurer entities. As pressure grows on the buy-and-bill system, this integration will be a big story over the next couple of years, asserted longtime industry expert Adam J. Fein, Ph.D., president of Drug Channels Institute, an HMP Global Company, during a Dec. 13 webinar.

Taking a broad look at the drug channel, Fein observed that private-equity groups have become a “big part of health care markets.” Retail pharmacies had been acquiring primary care organizations that were started by venture capital and private-equity companies but “have now realized that’s not such a great business.” He pointed to Walgreens Boots Alliance, which has considered selling VillageMD and, more recently, is reportedly in talks to sell itself to private-equity group Sycamore Partners, according to The Wall Street Journal.

The beginning of the new year should see the start of the next wave of highly anticipated biosimilars: those of Stelara (ustekinumab) from Johnson & Johnson Innovative Medicine (formerly Janssen Biotech, Inc.). While payers are saying they plan to have some of the biosimilars on formulary, many also say they will keep the reference drug on a preferred tier, according to Zitter Insights.

Stelara is approved for the treatment of adults and pediatric patients at least 6 years old with moderate-to-severe plaque psoriasis who are candidates for phototherapy or systemic therapy, adults and pediatric patients at least 6 years old with active psoriatic arthritis, adults with moderately to severely active Crohn’s disease and adults with moderately to severely active ulcerative colitis.

While many upcoming health care policies remain unclear, potential changes brought about by the Trump administration will be a net negative credit-wise for the industry, according to an S&P Global Ratings analyst. 

In a Dec. 2 article, analyst Arthur Wong named the top five developments S&P Global is watching: the Affordable Care Act, Medicare drug pricing negotiations in the Inflation Reduction Act (IRA), the Federal Trade Commission’s (FTC) tone on mergers and acquisitions (M&A) and tariffs, and HHS priorities. “We do not envision any rating changes due to the change in administration until it becomes clear what policies will be implemented and their time frame,” Wong wrote. “However, we see more downside than upside risk to ratings over the near term.” 

Policy changes to the Medicare Part D benefit that were included in the Inflation Reduction Act, namely a $2,000 out-of-pocket drug costs cap, will lead to lower out-of-pocket spending for some Part D enrollees but higher costs for Part D plans overall in 2025, according to a KFF analysis.

Six in 10 enrollees in Medicare Advantage Prescription Drug (MA-PD) plans will be in a plan that charges a deductible for drug coverage if they stay in their current plan, compared with just 21% in 2024. The average drug deductible charged by MA-PD plans will increase four-fold from $59 in 2024 to $225 in 2025. In addition, a larger share of MA-PD enrollees will be in plans charging coinsurance rather than flat copayments for preferred brands and nonpreferred drugs: 28% will be required to pay coinsurance for preferred brands versus 2% in 2024, and 57% will face coinsurance for nonpreferred drugs versus 11% in 2024.