Illustration: Aïda Amer/Axios

Conventional wisdom says health insurers nudge patients toward generic drugs whenever they can, saving everyone money in the process. That's not always true.

How it works: Mylan recently launched a generic version of the popular Advair inhaler at a 70% discount. But Express Scripts, which manages pharmacy benefits for 100 million people, is telling pharmacies to dispense the more expensive Advair brand because it won't cover Mylan's generic.

What we found: Express Scripts currently requires pharmacies to dispense the brand-name versions of 9 medications instead of their generic equivalents, including Advair, according to a March memo obtained by Axios. If pharmacies try to fill those generic prescriptions, the claims are rejected.

  • Express Scripts only charges patients the copays and coinsurance they would face for the cheaper generic. But that likely doesn't help all people who are in high-deductible plans and are on the hook for all of their drug costs.
  • An Express Scripts spokesperson contended patients pay on the "generic price whether in or out of deductible."

The intrigue: This shows the power of rebates, and how both pharmacy benefit managers and branded drug manufacturers benefit from that system.

  • GlaxoSmithKline, which makes Advair, would have to be offering Express Scripts a rebate of at least 70% to end up as the cheapest option.
  • The other brand drugmakers on the list similarly would have to offer steep rebates to be preferred over generics.
  • Express Scripts passes 100% of those rebate dollars to some of its employer clients, but keeps some of that money in other employer contracts.

Why it matters: Express Scripts is getting the lowest price for these drugs and passing along savings. But patients with high out-of-pocket costs, as well as employers that don't keep all of the rebates, could be disadvantaged.

What they're saying: Steve Miller, chief medical officer of Express Scripts, defended the brand-over-generic program and said employers are getting the best deal.

  • "We are the lowest net cost for clinically equivalent products," Miller said. "This is not about chasing rebates. This is about getting lowest net cost."
  • GlaxoSmithKline said in a statement the Express Scripts program makes Advair "available to patients at copays competitive with generic versions" and that "it is up to payers to decide what products are reimbursed at which tiers."

The big picture: Generics still make up 90% of filled prescriptions.

  • And PBMs make sizable profits off generics through practices like "spread pricing" — in which they charge their clients more for drugs than what they pay pharmacies, and keep the difference.

Go deeper: Kaiser Health News has explored the "rebate trap" that blocks generic drugs.

Go deeper

Trump tightens screws on ByteDance to sell Tiktok

Illustration: Aïda Amer/Axios

President Trump added more pressure Friday night on China-based TikTok parent ByteDance to exit the U.S., ordering it to divest all assets related to the U.S. operation of TikTok within 90 days.

Between the lines: The order means ByteDance must be wholly disentangled from TikTok in the U.S. by November. Trump had previously ordered TikTok banned if ByteDance hadn't struck a deal within 45 days. The new order likely means ByteDance has just another 45 days after that to fully close the deal, one White House source told Axios.

Updated 7 hours ago - Politics & Policy

Coronavirus dashboard

Illustration: Aïda Amer/Axios

  1. Global: Total confirmed cases as of 9:30 p.m. ET: 21,056,850 — Total deaths: 762,293— Total recoveries: 13,100,902Map.
  2. U.S.: Total confirmed cases as of 9:30 p.m ET: 5,306,215 — Total deaths: 168,334 — Total recoveries: 1,796,309 — Total tests: 65,676,624Map.
  3. Health: CDC: Survivors of COVID-19 have up to three months of immunity Fauci believes normalcy will return by "the end of 2021" with vaccine — The pandemic's toll on mental health — FDA releases first-ever list of medical supplies in shortage.
  4. States: California passes 600,000 confirmed coronavirus cases.
  5. Cities: Coronavirus pandemic dims NYC's annual 9/11 Tribute in Light.
  6. Business: How small businesses got stiffed — Unemployment starts moving in the right direction.
  7. Politics: Biden signals fall strategy with new ads.

Harris: "Women are going to be a priority" in Biden administration

Sen. Kamala Harris at an event in Wilmington, Del. Photo: Drew Angerer/Getty Images

In her first sit-down interview since being named Joe Biden's running mate, Sen. Kamala Harris talked about what she'll do to fight for women if elected VP, and how the Democrats are thinking about voter turnout strategies ahead of November.

What they're saying: "In a Biden-Harris administration women are going to be a priority, understanding that women have many priorities and all of them must be acknowledged," Harris told The 19th*'s Errin Haines-Whack.