Invisible Economics

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Last week, Eric Bachman, founder of Invisible Economics, presented at the Pricing, Reimbursement, and Market Access conference in Philadelphia, where he delved into WAC-based marketing strategies. Many companies think that avoiding discussions about pricing shields them from backlash or negative publicity. However, sidestepping these conversations can be detrimental. Companies that neglect addressing pricing issues often find themselves unprepared to handle inquiries about their product's cost. This lack of transparency can undermine stakeholder trust and tarnish a brand's reputation. For a comprehensive analysis of these ideas, visit the Invisible Economics blog through the link. We invite you to share your thoughts in the comments section below! https://lnkd.in/gfT8idEi

How I saved a top pharma company $100M+ dollars... A few years ago, while analyzing the gross-to-net (GTN) data for a prominent pharmaceutical company, I encountered a concerning issue. The company, which operated in the buy-and-bill sector, was paying a prompt pay fee to its distribution partner. This striking observation lingered in my mind, particularly as practice managers and key opinion leader (KOL) physicians continued to request extended payment terms alongside increased discounts and rebates. We expected that the benefits offered to the distributor would largely be passed on to these practices. Despite the apparent disconnect between distributor interactions and practice leadership, objective data was notably lacking. However, two strategies provided the critical information needed to revive discussions with the distribution partner: conducting market research with practice-level purchasers and performing a comprehensive analysis of available pricing data. The market research indicated that practices were struggling to manage their revenue cycles, as payer reimbursements often took considerable time to process, while the distributor consistently pushed for prompt payments. Upon reviewing the pricing data, I found that some of the highest revenue-generating buy-and-bill products in the U.S. were offering total market discounts that barely exceeded our prompt pay terms. Essentially, the discounts provided to distribution partners, GPOs, PBMs, and others were only marginally higher than the prompt pay discount extended to the distributor. Despite the team's initial hesitance to reopen discussions with the distributor due to concerns about potential increases in DPA or other fees, it became clear that the current program was failing to provide the expected benefits to purchasing customers and was, in fact, above industry standards. Additionally, appropriately compensating distributors for their services through DPA and other fees influenced the ASP differently than simply offering discounts. By reducing the discount to the distributor, there was more flexibility to provide additional discounts to customers. It’s also worth noting that inflation was low at the time, which meant that the value of prompt payment did not match the current short-term capital carrying costs. These insights clearly signaled the need for change. While the journey was challenging, the company and its customers will benefit from the savings generated by these adjustments to their distribution agreements for decades to come. This remains one of my proudest contributions to reducing healthcare costs. A thorough understanding of US Market Access paves the way for the emergence of new business opportunities. Comment below with your stories about how you helped reduce the cost of healthcare in the US!

Who truly pays for pharmaceuticals in the US? The answers might surprise you. Traditionally, Pharmacy Benefit Managers (PBMs) and health insurance plans are identified as the "payers" in the US. However, a deeper analysis in the "Follow the Dollar" report unveils a different reality. For many branded drugs, health plans typically cover only about one-third of the total cost, with PBMs seldom shouldering the financial burden. This analysis deconstructs dozens of pharmacy transaction line items, eliminating the complexities of various fees imposed by the #PBM on different stakeholders. Note that PBMs do not directly contribute to the cost but negotiate rebates and retain a portion for their services. For instance, in this example transaction, the PBM retained $10.65 while passing most of the rebate to the health plan or plan sponsor. ?????? ???????????????????????? ???? ?????? ???????? ?????????????????????? ?????? ?????????? ???????? ???? ???????? ?????????????????????? ???????? ?????? ?????? (?????????? #???????????????? ?????? #???????????????????? ????????????????). Seeing through the opacity of US healthcare requires a deeper dive. Follow our page to learn more or explore our courses at invisibleeconomics.com #healthcare #pharmaceuticals #transparency #marketaccess #USmarketaccess #invisibleeconomics #pharma #pharmaceutical

Amid the intense focus on rising housing prices in the US, there's a valuable lesson for pharmaceutical pricing. In lesson 5.1 Pricing Theory, we explore the principles of value-based pricing through the lens of the real estate market. Follow our page to learn more or purchase the courses at www.invisibleeconomics.com! #marketacess #USmarketaccess #invisibleeconomics #pharma #pharmaceutical #healthcare

You'll need headphones for this one! In this video, "The Missing Rebates," we delve into how an insurance company addresses their medical loss ratio (MLR). One thing I enjoy about the healthcare industry is the level of obscurity. For instance, anyone can look at this report from Horizon Blue Cross and see a well-argued case against further MLR regulations. However, I enjoy seeing the part that is hidden in plain sight. Take a 2-minute journey to explore the invisible economics in the video below. Follow our page for more or check out Lesson 1.3 Stakeholder economics to learn about the financing of the US healthcare system. #marketacess #USmarketaccess #invisibleeconomics #pharma #pharmaceutical #healthcare

As the language of our industry continues to evolve, we want to take a moment to define what we mean by market access. In our latest blog, we break down the 7 knowledge domains of US pharmaceutical market access. Dive in here: https://lnkd.in/gXGbuCSc #marketacess #USmarketaccess #invisibleeconomics #pharma #pharmaceutical #healthcare

As Pride Month draws to a close, there is an important opportunity for advocacy: the impending CMS NCD on PrEP. If your organization has sported a rainbow logo for the past 30 days and/or champions a DE&I initiative, this is a vital moment to translate your words into meaningful action. To start, please repost this message from Invisible Economics. ???????? ???? ????????? Pre-Exposure Prophylaxis (PrEP) involves using antiretroviral drugs regularly to prevent HIV transmission and it is highly effective, reducing new cases by 92%; an amazing development from the pharmaceutical industry. The WHO now classifies HIV as chronic rather than a terminal illness—a major milestone. However, PrEP is critical because about 1 in 8 of the 1.2 million people living with HIV in the US are unaware. ?????? ???? ???????? ?????????????????? ?????? ?????????? ??????????? HIV disproportionately affects the LGBTQ+ community, with a significant impact on gay and bisexual men. In 2019, men who have sex with men represented 65% of all new HIV infections in the US. Additionally, HIV's impact is uneven across racial and ethnic groups, hitting African Americans the hardest, followed by Hispanics. ???????? ???? ?? ?????? ??????? The US Centers for Medicare and Medicaid Services (CMS) oversees state Medicaid programs and creates all Medicare policies. A National Coverage Determination (NCD) is a decision by CMS on whether and how Medicare will cover specific medical services or products. Please see our comment for a full timeline of this NCD process and a link to the CMS website. From '15 to '19, the largest rise in HIV cases was Medicare-aged patients. ???????? ???? ?????????????????? ?????????? ?????? ?????? ?????? ????????? If the NCD moves forward as is, injectable and oral medications will be covered without any cost-sharing through Medicare Part B—the medical benefit—instead of Medicare Part D—the prescription drug plan. Part B will also offer counseling sessions, HIV screening, and hep B screening, all at no cost to the patient. Commercial insurance companies sometimes follow CMS on significant policies. ?????? ???????????????????????????? ???? ???????? ?????? ?????????????????? ?? ?????????????? ???????????????????? ???????????? ?????? ?????? ???????????? ???????????????????? ????????????????. ???????? ?????? ?? ????? 1) ??????????????: Review the final NCD to ensure it supports patients, especially in underrepresented communities. 2) ????????????????: Employers should urge their health plan to follow CMS in providing PrEP access and supporting medical care with no out-of-pocket cost. 3) ??????????????: Raise awareness among HCPs, patients, pharmacies, and others about the new benefits and billing procedures. 4) ??????????????????????: Medicare PrEP patients need to identify a Part B certified dispensing pharmacy for their medications (most pharmacies only work with Part D) and medical coders need to know the new diagnosis code for PrEP, Z29.81.

We'd like to thank journalists Rebecca Robbins and Reed Abelson at The New York Times for highlighting "The Opaque Industry Secretly Inflating Prices for Prescription Drugs" Our favorite part was when you said: "There is another collection of powerful forces that often escape attention, because they operate in the bowels of the health care system and cloak themselves in such ?????????????? and complexity that many people don’t even realize they exist." ???????????? ???? ?????? ?????????????? ???? ???????????? ???????? ??????????????, ???? ?????????? ?????????????????? ??????????????????. Please read the NYT article at the link below and follow our page on LinkedIn. https://lnkd.in/em6mVRXn

We are thrilled to announce the launch of two courses at Invisible Economics: the Executive course and the Market Access Partner course. These programs delve into the complex realm of US market access, specifically tailored for professionals in the pharmaceutical and biotech industries. Invisible Economics seamlessly integrates theory and practice across seven critical domains of US market access. Our curriculum, designed to adapt to the ever-changing landscape, uncovers the hidden intricacies of healthcare and highlights the significant influence of market access on decision-making. Through these courses, industry professionals can acquire essential knowledge and skills in US market access, traditionally available only through lengthy apprenticeships. Geared towards marketers, consultants, executives, and field leaders, our initial offerings include over four hours of video content covering crucial topics such as pricing, contracting, marketing, and strategies for engaging with population-based decision-makers. Seize this opportunity to expand your knowledge, refine your skills, and make a meaningful impact in the healthcare sector. Enroll now and embark on your journey to mastering the ?????????????????? ?????????????????? of US market access. Learn more at www.invisibleeconomics.com Please share our announcement and follow our page!