ESRX’s New INSIDERX Strategy – PART II: Sure Savings or Just a Show?

NOTE: this post is the second of three assessing $ESRX’s new INSIDERX programme. Be sure to read the first posting in this series. 

$ESRX’s INSIDERX programme made waves when it was announced as a means for the uninsured to gain similar levels of discounting to those achieved by the PBM during negotiations with the manufacturer.  The programme is especially relevant given extensive discussion around the potential repeal of the ACA into House and Senate ‘replace’ legislation that would lead to at least 22m Americans losing coverage based on CBO estimates.  Also driving interest is the ongoing spotlight on pricing in the USA – with notable progress being made by state legislatures across the country. This is also underscored by the public’s growing awareness about the PBM industry’s role in the enduringly controversial pricing debate.

Indeed, pricing and health insurance coverage are major issues in the USA right now, which helps to explain why it is that the New York Times published an article on $ESRX’s INSIDERX programme.  As discussed in earlier postings, pricing and health insurance coverage issues are now mainstream – and PBMs are gradually waking up to the realisation that they, too, maybe called to the court of public opinion.

As such, $ESRX’s INSIDERX seemed like a great PR decision – it enabled them to hook themselves to the right side of the debate over the uninsured, specifically allowing them to endorse the concept that they have a social obligation to help the uninsured afford their medications.  On the surface, there is no denying that this is the case – the programme does indeed provide medications at a significantly lower price than would be available if an uninsured patient were to pay the ‘cash price’, also known as the ‘U&C price’. Deeper exploration of the programme allows for a few important realities to be revealed.

FIGURE 1.  INSIDERX Discounted Price Distribution

SOURCE: CBPartners Analysis, www.insiderx.com

First, the good news: the formulary is indeed focussed on the right therapeutic areas.  With the exception of the somewhat protrusively placed gout therapies, the focus is very clearly on high-prevalence, chronic diseases: diabetes, asthma / COPD / allergy, and GI (which includes the prescription-only constipation therapy, AMITIZA™, but is otherwise focussed on heartburn). Diabetes is the most widely addressed therapeutic area, and some treatments do get the monthly cost to the patient down to approximate copay levels of USD 24– more on the relevance of these particular therapies in a moment.

Almost half the products are discounted to below USD 200 per month.  Yes, the discounting to achieve that level is at times aggressive, but unfortunately USD 200 is still a large share of disposable income for the socioeconomic strata that typically represent the uninsured.

FIGURE 2. INSIDERX Discounting Magnitude Relative to Actual Patient Savings

SOURCE: CBPartners Analysis, www.insiderx.com

About two-thirds (54 of 83) of the products available through INSIDERX fall into the category of ‘low discount, low savings’.  It may be argued that the use of ‘low’ to characterise these amounts from FIGURE 1 are unfair – indeed, saving USD 175 and a 45% discount to the U&C price are significant from a pure numerical perspective.  A patient saving USD 175 per month on their prescription is nothing meagre.  These definitions of ‘high’ and ‘low’ are based on midpoints within the ranges of discounts and savings across all INSIDERX products.

With those caveats noted, the individual brands within this segment are telling – as FIGURE 2 illustrates, these are the ‘figurehead’ brands.  These are the brands that cause notice and headlines – they generally all have market exclusivity (especially those with less than 30% discounts; their time on the market indicate that biannual contracting has not been in effect long enough to lead to the deep discounts that are typically observed in older products.  In some ways, they are there to ‘look pretty’ – their presence helps the INSIDERX formulary appear to be meaningful, broad, and inclusive, but their real cost savings to the patient are on the lower end of the spectrum.

Those brands with the highest discounts and savings to the patient are somewhat unimpressive.  Among the seven products available, four are insulins from $LLY – something that may lead the general public to believe the programme is ‘as advertised’: providing substantial savings for critical health issues.  However, as most endocrinologists would agree, three of these brands (HUMULIN N™, HUMULIN 70/30™, and the HUMALOG MIX 50/50™) are not among the more popularly used insulin products.  To $ESRX’s credit, the addition of HUMALOG-100™ is a significant difference-maker – it is a commonly used form of insulin and the saving to the patient is 50%, or USD 323 per month.  Among all 83 products on INSIDERX’s formulary, this one is likely the most meaningful for diabetic patients requiring insulin therapy.

Over a fifth of the products have generic options for the same or similar products. In other words, the brand in question is no longer exclusive, and generic options offer a much more economically sound argument for patient-use over the brand.  This is obviously the case for NEXIUM™ and CRESTOR™, which gained generic competition in 2015 and 2016, respectively.  As FIGURE 3 clearly illustrates, generic versions of these products provide more significant savings for cash-pay patients.  A similar view applies to paying a branded, albeit discounted, price for the sixth-to-market PPI, or the latest atypical antidepressant.  If any doubt exists, a simple scan of health plan formularies and coverage policies supports this sentiment given their decision to enforce triple or even quadruple step requirements.

FIGURE 3. INSIDERX Savings Relative to Generic and Clinically Substitutable Generics

 

SOURCE: CBPartners Analysis, www.insiderx.com; MEDISPAN PriceRx

While not necessarily a negative, it is also worth noting that INSIDERX is not the first, and most likely will not be the last initiative that promises access to lower-priced medicines for the uninsured and underinsured. Programmes like GOODRX, BLINK HEALTH, and LOWEST MED were in effect long before INSIDERX, and often provide similar and sometimes superior savings to patients through a combination of coupons and real-time price comparison. These discounts are usually negotiated directly with pharmacy chains (unlike INSIDERX, where $ESRX continues to negotiate directly with manufacturers), and typically have fewer eligibility requirements. Further, patients are not required to sign up for these programmes as they can simply print the coupons, thereby saving time and creating flexibility. Hence, it can be argued that INSIDERX is simply an undifferentiated addition to the growing number of medicine discounting options. Their collective long-term impact on the healthcare landscape, and drug pricing in general remains to be seen.

It would be unfair to say that the INSIDERX programme is not a step in the right direction.  Even if the main thrust of $ESRX’s INSIDERX programme is to generate positive PR, the fact is that some uninsured patients can benefit from the programme.  Further, there are some real winners – particularly HUMALOG U100™ users.  As the programme picks up some traction around what is possibly going to be an expanding uninsured base in the USA, the additional utilisation through an incrementally larger customer base that $ESRX can boast could lead to more potent discounts in the future. INSIDERX may end up being more of a lifeline for the uninsured than one may believe when critiquing the current formulary.

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