How To Lose $90 Billion in Ten Years, Medicare Part D’s Increased Out Of Pocket Expense

Hey all,

Happy Hump Day! It’s amazing to think that even as a $100 billion company, Walgreens was unable to negotiate with PBMs on reimbursement rates. Scale in healthcare is difficult to attain. Enjoy the rundown!

Jacob Brody (Co-Founder & CEO, ZorroRX)

(Modern Healthcare) Walgreens Nears $10 Billion Sale to Sycamore Partners, 

 Walgreens Boots Alliance was once a $100 billion company, positioned as a global pharmacy powerhouse after the 2014 merger of Walgreens and Alliance Boots. But over the years it’s lack of a PBM and other factors led to declining prescription reimbursement rates. Combined with competition from Amazon and other online retailers, and some questionable strategic moves—like its expensive push into primary care with VillageMD—Walgreens is a shadow of its former self. Now, with a potential $10 billion buyout from Sycamore Partners, Walgreens is set to be dismantled and sold for parts before their inventory is shoplifted and sold at a discount on Amazon. Full Article

(Health Affairs) Inflation Penalties in the Private Market

A new Health Affairs analysis suggests that applying the IRA’s inflation penalties to the commercial drug market could have saved $8.1 billion in 2021, with various scenarios estimating at least $4 billion in annual savings. However, recent trends show that inflation has outpaced drug list price increases, potentially making this policy solution less relevant. Additionally, list prices matter less than net prices, which are influenced by complex rebate structures that often harm patients but may not generate systemwide savings. Full Article

(Council For Affordable Health Coverage) Medicare Part D and Rising Out-of-Pocket Costs 

A new report from the Council for Affordable Health Coverage, using Magnolia Market Access data, finds that Medicare Part D plans are shifting patients from fixed copays to coinsurance for drugs subject to future price controls, potentially increasing out-of-pocket costs by as much as 76%. This shift could undercut the intended financial relief of the Inflation Reduction Act’s price negotiation efforts. Full Article