Express Scripts Holding, a pharmacy benefit manager and specialty pharmacy, is quietly building a side business aimed at helping drugmakers dispense a new generation of high-priced drugs, according to Reuters.
Here are eight things to know:
1. Although Express Scripts built its multibillion enterprise by pressuring drugmakers to drop prices for U.S. patients through its PBM arm, the company is establishing a side business through its specialty pharmacy: getting paid to help pharmaceutical companies sell their latest pricy drugs.
2. Express Scripts is in talks with Biomarin Pharmaceutical, Spark Therapeutics and Bluebird Bio to have its specialty pharmacy exclusively distribute their new hemophilia treatments once they are FDA approved, according to Express Scripts CMO Steve Miller, MD. Analysts estimate these hemophilia treatments could cost $1 million to $1.5 million.
3. Instead of pushing back against the costly price of the drugs, Dr. Miller says the benefits of these therapies could be worth the high cost — an opinion that echoes the common pharmaceutical company argument.
"Even if they charge $1 million, that’s a great deal," Dr. Miller told Reuters. "So there are going to be some gene therapies where it is very clear that everyone who has that disease should get it."
4. The goal of working with pharmaceutical companies directly through its specialty pharmacy business, Dr. Miller says, is to help these expensive therapies succeed commercially.
5. To manage conflicts of interest, Express Scripts separates its PBM and specialty pharmacy business — which dispenses drugs that usually aren't sold through drugstores because they require special handling. By using its own pharmacy, Express Scripts can hold onto more of the profit along the supply chain. Its specialty pharmacy business has been growing in recent years, and accounts for about a third of its sales and profits.
"Our PBM treats our specialty pharmacy as they treat any other pharmacy in our pharmacy network,” Dr. Miller said. "So they are not privy to their acquisition prices or anything else, and the specialty pharmacy is not privy to the contracts that the PBM has with their payer clients or anything else."
6. Express Scripts already has exclusive rights to distribute several other expensive gene treatments, including Spark Therapeutics' Luxturna, which treats a rare genetic disorder that can cause children to go blind. Its price tag is $850,000. Express Scripts also has a similar deal with Biogen on its $750,000 spinal muscular atrophy drug Spinraza. Further, it helps manage Novartis' $475,000 gene-based cancer therapy Kymriah.
7. The deals to exclusively sell these pricy drugs put Express Scripts in a significantly different role than its well-known business managing prescription drug claims through its PBM.
8. Reuters notes that Express Scripts may be focusing its efforts on growing its low-profile specialty pharmacy business, as PBMs face growing criticism from U.S. regulators, drugmakers and President Donald Trump, who claim they act as middlemen that drive up prices for payers.
Read the full report here.