As Charles Dickens once wrote, “Change begets change. Nothing propagates so fast.”
Truer words have probably never been written.
It doesn’t take much to see that, over the past year, there has been nothing but change – both big and small, in the healthcare space – particularly in pharmacy and benefits. And when it comes to drug channels and how some key players are poised to disrupt the market in a big way, there is no shortage of change-making-deals. The question is: How will these changes affect insurers, pharmacies, and health plans?
Reinventing the Market through Contract Language
We’ve written other blogs about contracts and how the language used is often chosen to specifically create favorable conditions for one sector over another. This isn’t a surprise, it’s the first rule of contract writing. That’s why there are experts who review and negotiate contracts – so that people can be sure their best interests are also being taken into account.
However, when companies “collaborate” to deliver more affordable care to consumers, and structure the details of that collaboration in a way that leverages the enormous volume of consumers they serve to create an environment that gives them maximum negotiating power, someone is going to have to carry the burden of higher pricing. And that will fall squarely on the shoulders of pharmacies and health plans on the receiving end of the new market scale that is created.
Some key implications of these types of contracts include:
- Manufacturers and pharmacies can face increased PBMs and those increases can be significant
- There could be a further muddying of transparency in underlying economics
- Collaborations are harder for the Federal Trade Commission (FTC) to challenge creating a
situation ripe for manipulation by key players
What These Changes Mean for the Market
Healthcare is notoriously slow to change – but change is inevitable. And some deals could very well be seen as pro-competitive by the FTC because of its potential to lower healthcare costs and be beneficial to consumers.
But at what cost?
When the checks and balances we normally see at work are stilled, the pendulum can swing wildly. Staying on top of how the rebate and healthcare market changes will give you a head’s up on what changes might be on the horizon and how collaborative ventures can propel those changes.
It’s a slippery slope, and one that needs to be navigated with great care and expertise.
Here at Health Delegates one of our main goals is to keep our customers informed. Subscribe to our blog today and stay up-to-date on market changes, deals, and ventures that have the potential to impact your bottom line.