The Drug Channels blog delivers timely analysis and provocative opinions on pharmaceutical economics and the drug distribution system. It is written by Adam J. Fein, Ph.D., one of the country's foremost experts on pharmaceutical economics and channel strategy. Learn more...

Monday, July 28, 2014

Industry Keynote Speakers McClellan and Turner Announced for IIR’s MDRP 2014

IIR’s Medicaid Drug Rebate Program (MDRP) 2014  is back in Chicago September 15-17, 2014, just in time to provide you with essential regulatory updates surrounding the impact of the ACA, Medicare Part D, AMP Final Rule, and the 340B Program's Proposed “Mega Rule.”

This year, the MDRP event team brought together not one, but TWO keynote speakers:
  • Mark McClellan, MD, PhD, Senior Fellow, Brookings Institution; Former Commissioner, FDA; Former Administration, CMS
  • Grace-Marie Turner, President, Galen Institute
Hear from them as they share their first-hand experience in managing the true impact of the ACA and Medicaid reform. They will also provide big-picture insights into the politics and policies of Medicaid expansion and discuss the future of Medicaid.

Click here to register with code XP1958DRUG to SAVE $100 off the Current Rate!

Download the Brochure Here for Full Agenda and Speaker Details

More details below.

Friday, July 25, 2014

MAC Transparency Legislation Gains Momentum

Today’s guest post comes from Todd Grover, President & CEO of and Co-Founder of Glass Box Analytics.

Todd reviews the new Center for Medicare & Medicaid Services (CMS) final rule regarding the disclosure and updating of Maximum Allowable Cost (MAC) reimbursement limits. As Drug Channels readers know, a MAC establishes the reimbursement limit for a multiple-source drug.

He then describes Predictive Acquisition Cost (PAC), an alternative benchmark that aims to get closer to a pharmacy's true acquisition cost. Drug Channels readers can analyze MAC pricing by downloading the PAC – MAC Optimization Calculator, an Excel workbook with data on five key generic drugs.

Please contact Todd ( with any questions about the article.

Tuesday, July 22, 2014

Who Pays Less for Drugs: Medicaid, DOD, or Medicare Part D? The Answer May Surprise You

Hey there, pharmacy reimbursement nerds! The Government Accountability Office (GAO) has a fun new report for you: Comparison of DOD, Medicaid, and Medicare Part D Retail Reimbursement Prices.

The report documents the interplay between a retail pharmacy’s prescription revenues, the consumer’s out-of-pocket expenses, and the net (post-rebate) drug price paid by each program. It also has a good background on how each federal payer operates.

Bottom line: While Medicaid had the biggest rebates, Medicare Part D had the lowest average prescription costs. Although the GAO doesn’t explain this discrepancy, my computations below show that Part D had higher generic dispensing rates than the other government payers. An argument for the triumph of formulary management over federal price controls?

Monday, July 21, 2014

Hub Models and Program Design

3rd Hub Models and Program Design
September 10-11, 2014
San Diego, CA

Leaders in brand management and commercial operations across the industry are actively reassessing their Hub strategy – are you?

This September, CBI’s Hub Models and Program Design conference is heading out west to explore pressing questions about Hub strategy. Join your peers at this timely meeting on Hub models and program design as you prepare to launch, transition or reboot your corporate or product approach to hub services.

Speakers come from such companies as Boston Biomedical Pharma, CareMetx, inVentiv Health, Ipsen Biopharmaceuticals, Lash Group, Novartis, Occam Health, Omnicare, Sonexus Health, and UBC.

Drug Channels subscribers can save $400 off of the standard registration rate when they use code QUJ684.Register today!

*Cannot be combined with other offers or used towards a current registration. Other restrictions may apply.

Wednesday, July 16, 2014

One Percenters: The Real Facts Behind Hospitals' 340B Contract Pharmacy Mega-Networks

As a follow-up to yesterday's article on the explosion in 340B contract pharmacies, let's look at the covered entities that build 340B networks.

As the table below shows, just 290 healthcare providers—only 1.2% of all 340B covered entities—account for nearly half of the program's 35,000 contract pharmacy agreements. These providers (mostly hospitals) have built mega-networks seemingly designed not to help needy and uninsured patients, but to enrich hospitals and pharmacies.

Simple math suggests that any contract pharmacy abuses are concentrated with the top 1% of 340B providers. How long will the program’s defenders (and the other 99%) ignore the facts? My questions below highlight the challenges facing manufacturers, managed care, and policy makers.

Tuesday, July 15, 2014

One in Four U.S. Pharmacies is Now a 340B Contract Pharmacy

As part of Drug Channels’ ongoing coverage of the 340B drug pricing program, I want to highlight our new analysis showing that the 340B drug pricing program continues to expand at a breakneck pace.

More than 15,300 pharmacy locations now have 35,000 contract pharmacy agreements with 340B covered entities. That accounts for nearly a quarter of total U.S. retail, mail, and specialty pharmacy locations. Walgreens still dominates, but its share is shrinking as CVS, Rite Aid, and Walmart pile into the market.

This dramatic growth, combined with pharmacies' 340B profit opportunities, makes me wonder how 340B networks could be undermining payers' network pharmacy models.

Tomorrow, I'll explain how a very small minority of hospitals may be disrupting traditional managed care contracting strategies with large 340B mega-networks.

Monday, July 14, 2014

IIR’s All-New Specialty Pharmacy Collaboration Summit

IIR is proud to introduce the all-new Specialty Pharmacy Collaboration Summit taking place September 15-17, 2014 in Boston, MA.

This collaborative summit is designed to facilitate networking and integration between all key stakeholders in the evolving specialty pharmacy value chain, including the leading pharmaceutical manufacturers, health plans, and specialty pharmacies.

As a partner for the event, Drug Channels' readers receive a 15% discount off the standard rates! Register Now to SAVE 15% off standard rates with code XP1968DRUG.

Thursday, July 10, 2014

Future Vision: The Top 10 Drugs of 2020

Professional prognosticator EvaluatePharma recently released World Preview 2014, Outlook to 2020. (The report is free with site registration.) This report projects for prescription drug sales and R&D activity in the U.S. and abroad.

Below is my handy summary table comparing 2020’s best-selling U.S. drug products with the top sellers of 2013. The number of specialty drugs in the top 10 keeps rising. In 2020, 9 of the 10 best-selling drugs by revenue are projected to be specialty drugs, compared with 3 drugs in 2010 and 6 in 2013. EvaluatePharma predicts that AbbVie’s Humira will stay on top. You might be surprised at the Solvadi forecast.

One oddity: EvaluatePharma doesn’t expect biosimilars to do much harm to 2020’s top drugs. See if you agree.

Tuesday, July 08, 2014

10 Fun Financial Facts from Diplomat Pharmacy’s IPO Filing

Last week, Diplomat Pharmacy filed a Form S-1, the Securities and Exchange Commission (SEC) document that companies use for an initial public offering (IPO) of common stock.

Everyone interested in specialty pharmacy economics should study Diplomat’s filing. To help you get started, I’ve highlighted 10 fun financial disclosures about Diplomat’s business. They include unprecedented details on revenues, profit margins, business mix, executive salaries, and other intriguing items.

Congratulations to Phil Hagerman and his team for bringing Diplomat to this point! Read on for a peek behind the counter at the country’s largest independent specialty pharmacy.