Pharmacy-benefit managers, drug stores and wholesalers stand to benefit from the upholding of the Obama administration’s health-care law for a simple reason: More insured Americans mean more prescription-drug sales.
For industries that rely on selling, filling or processing prescription drugs, the potential for tens of millions of Americans now having medical coverage could mean a bump in business.
“You’re opening up a vista to a new population: the near-poor,” says Dan Mendelson, CEO of Avalere Health, a consulting firm for health-care companies.
Express Scripts, a third-party administrator of prescription-drug plans for insurers and employers, sees potential savings, clarity and fewer regulatory hurdles around “biosimilar” drugs, or cheaper versions of expensive and complex medicines made from biological matter. Express Scripts has been working with manufacturers of biosimilars for years, Express Script’s chief medical officer, Steve Miller, tells the Health Blog.
“Our planning can now move forward, with a greater acuity, because of the certainty of the decision,” Miller says. “We can start accelerating those efforts.”
Express Scripts helps elderly patients avoid the so-called doughnut hole of prescription-drug spending in Medicare by finding cheaper alternatives. The company wouldn’t comment on strategies they plan to implement as the law closes the doughnut hole — the gap in Medicare prescription drug coverage for seniors where spending exceeds $2,930 but is less than $4,700 — but “you’re going to see us continue to double down on our efforts to move them to the cost effective option,” Miller says.
The Supreme Court also said the federal government can’t penalize states for not expanding Medicaid services, creating an opportunity for drug wholesalers.
Pharmaceutical companies typically outsource the job of finding patients for their particular drugs to wholesalers like AmerisourceBergen. If the differences between populations served varies widely between the states, drug makers may have to lean more heavily on the services of wholesalers, says Peyton Howell, Amerisource Bergen’s senior vice president of business development.
“For manufacturers that have different strategies, for both uninsured and underinsured, how will they move forward?” Ms. Howell said.
Some PBMs might be at risk long-term over companies foregoing employer-based coverage, opting to move workers into health exchanges, writes Lisa Gill, a J.P. Morgan analyst, in a note to investors.
Express Scripts Miller says he doesn’t expect employers to make any “dramatic shifts” in the short-term. “The vast majority of our employers continue to believe they’ll be offering health benefits, but they’re taking a wait-and-see attitude about what transpires over the next several years.”