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...

Tuesday, October 25, 2016

Walgreens Plays to Win: Our Exclusive Analysis of 2017's Part D Preferred Pharmacy Networks

In a previous exclusive analysis (Preferred Pharmacy Networks Are Back in 85% of the 2017 Medicare Part D Plans), I highlighted how preferred pharmacy networks will dominate next year’s Medicare Part D prescription drug plans (PDP).

Today, I examine pharmacy participation in the 2017 Part D preferred networks. Our analysis shows some pharmacies getting more selective about plan participation.
  • For the first time, Walgreens is the most active participant in the major preferred networks. Walmart has pulled back, and CVS and Rite Aid are barely participating as preferred pharmacies.
  • The pharmacy services administration organizations (PSAOs), which represent independent pharmacies, appear to be engaged selectively with some plans. Independents are completely absent from almost half of the major plans.
I knocked on more than a few doors to collect this bagful of sweet data. Read on as we empty it to see which plans look sweet—and which might be tricks.

Monday, October 24, 2016

Real World Data for Competitive Advantage Summit

Real World Data for Competitive Advantage Summit
December 13-14, 2016 • Philadelphia, PA
Visit Website | Request Brochure

As advanced analytical methods and large data sets of treatment effectiveness become more readily available, the life science industry is primed to fine-tune its portfolio. Whether it’s acquiring post-launch data for safety and adherence results, or utilizing evidence to navigate the regulatory and pricing landscape, real world data is a vital tool.

World Congress’ Real World Data for Competitive Advantage Summit highlights specific application of use cases for commercial optimization in the life sciences. This two-day educational event features an expert speaking faculty delivering information through in-depth presentations, interactive panel discussions, and intensive case studies, maximizing takeaways for those in attendance. In addition, ample networking time allows for the forging of mutually beneficial relationships to enhance patient outcomes and technology advancement.

Top Reasons to Attend:
  • Learn from specific, innovative real world data use cases and apply insights to help you expand your commercial efforts
  • Assess the value of an analytical Center of Excellence and its benefit for internal teams
  • Network with senior data professionals on how to collaborate on common challenges such as interoperability of electronic health records
  • Gain perspective from alternative sources, such as health systems and regulatory authorities in order to understand partnership potential and expanded acceptance criteria, respectively
  • Discuss how real world data fits into value chain development
  • Hear a case study from IBM Watson on their revolutionary health IT

Please visit to register or for more information.

Drug Channels readers who register will receive a $300 savings when they use promo code DC300.

The content of Sponsored Posts does not necessarily reflect the views of Pembroke Consulting, Inc., Drug Channels, or any of its employees.

Thursday, October 20, 2016

The Top Specialty Drug Distributors in 2015

The Big Three wholesalers—AmerisourceBergen, Cardinal Health, and McKesson—will soon report their latest quarterly earnings. Expect specialty drugs to be a hot topic.

About $134 billion in specialty drugs was sold via wholesale distribution in 2015. The chart below presents our estimates of market share by parent company and, where relevant, the division of that company. I also explain wholesalers’ three major customer groups for specialty drugs.

Like specialty dispensing, the distribution market is highly concentrated. But wholesalers face significant challenges in capturing the value and profits from the booming specialty drug market, particularly for patient-administered, pharmacy-dispensed specialty drugs. Specialty’s rapid growth will prevent the market from going to the dogs, but it’s certainly getting ruff.

Tuesday, October 18, 2016

Employer Pharmacy Benefits in 2016: More Specialty Drug Cost-Shifting Means More Problems for Patients

It’s time for our annual analysis of the Kaiser/HRET 2016 Employer Health Benefits Survey, which you can read online for free. The survey delves into employer-sponsored health coverage at 2,000 companies. In the charts below, I summarize employers’ 2016 pharmacy benefits by examining (1) cost-sharing tier structures, (2), average copayments, by formulary tier, and (3) type of cost-sharing (coinsurance and copayment).

This year’s results highlight the growing discrepancy between diseases that can be treated with traditional drugs and those that require specialty drugs. Traditional therapy classes that treat larger patient populations have multiple generic drug options and fixed dollar copayments.

By contrast, employers continue shifting the cost of specialty prescriptions to their beneficiaries. Patients taking specialty drugs face economically-debilitating coinsurance—in some cases with no limit on out-of-pocket expenses. These benefit designs essentially discriminate against the very few patients undergoing intensive therapies for such chronic, complex illnesses as cancer, rheumatoid arthritis, multiple sclerosis, and HIV. But isn’t insurance supposed to help when things go really wrong?

Read on for full details along with some lovely tiers/tears puns.

Monday, October 17, 2016

ACO Population Health Congress

ACO Population Health Congress
December 8-9, 2016 | Tampa, FL

CBI’s ACO Population Health Congress conference offers payers and providers the opportunity to discover solutions for day-to-day challenges, improve the health of members and enhance models to quantify improvement and outcomes. As the ACO model shifts from fee-for-service to value-based care models, it is critical for ACOs to understand population health management and value-based networks in order to improve coordination of care and health outcomes. Discover tactical strategies, gain policy insights and benchmark with industry experts to develop solutions to improve population health and achieve operational excellence.

Gain Comprehensive Insights on:
  • Implications of MACRA Proposed Rule on ACO Operations
  • Patient registry refinement and clinical integration hierarchies to successfully define populations and accurately report quality measures
  • Post-acute, coordinated care initiatives to reduce hospital admissions, readmission, ED utilization and variations in care
  • Proactive outreach to noncompliant patients and automated patient outreach programs to decrease cost of care downstream
  • New methods for reviewing contracts to assist in quantifying risk and determining potential benefits of switching ACO models
  • Best practices to enhance patient experience and improve outcomes through patient engagement and coordinated care
Case Study Spotlight:
  • Leaving the Next Generation ACO Model – Financial and Operational Implications
  • Remove Barriers and Reduce Unnecessary Hospital Utilization to Improve Beneficiary Health

Visit for more information. Drug Channels readers will save $200 off the standard registration rate when they use discount code QZM698.*

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

The content of Sponsored Posts does not necessarily reflect the views of Pembroke Consulting, Inc., Drug Channels, or any of its employees.

Friday, October 14, 2016

Follow the Vial: The Buy-and-Bill System for Distribution and Reimbursement of Provider-Administered Outpatient Drugs

By reader request, below is a channel flow chart illustrating the buy-and-bill process for provider-administered drugs. It complements Follow the Dollar: The U.S. Pharmacy Distribution and Reimbursement System, which focuses on patient-administered outpatient drugs.

This post is adapted from Section 3.1.2. of our The 2016–17 Economic Report on Pharmaceutical Wholesalers and Specialty Distributors. Friendly reminder: Discounted pricing for the report ends today!

Thursday, October 13, 2016

Follow the Dollar: Measuring Who Profits From a Brand-Name Prescription

Now, here’s something I hope you’ll really like!

I recently collaborated with Julie Appleby at Kaiser Health News (KHN) to explain the flow of funds between a pharmaceutical manufacturer and the patient.

The resulting graphic (below) uses a typical brand-name prescription to show the profits earned by key drug channel participants: manufacturers, pharmacy benefit managers (PBMs), wholesalers, and pharmacies. It also illustrates the payer’s net costs and manufacturer’s net price.

KHN’s well-produced design complements the less pretty Rube Goldberg diagram that I shared in Follow the Dollar: The U.S. Pharmacy Distribution and Reimbursement System. The KHN chart may look like a PTCTU*, but it will help you understand the method to the madness.

Tuesday, October 11, 2016

Specialty Product Data Strategies

CBI’s Specialty Product Data Strategies
December 14, 2016 | Philadelphia, PA

Have you seen the agenda for the Specialty Product Data Strategies meeting yet? Being held on December 14th in Philadelphia, this is the pharma/bio industry’s only data summit devoted to specialty product returns with cutting-edge case studies and forward thinking presentations.

Featuring trailblazing insights from executives representing AstraZeneca, Bayer Healthcare Pharma, Biogen, Blue Fin Group, Therigy and ValueCentric, this meeting is poised to showcase how to strategically contract, analyze and utilize specialty data to illustrate value.

Topics at a Glance:
  • Contracting Considerations – Acquisition and Collection of Specialty Product Data
  • Decision-Making Journey for Coverage of Specialty Products
  • Analyzing Specialty Pharmacy Data Sets
  • Understanding FMV – Industry’s Going Rate for Specialty Product Data
  • Integrated Delivery Network (IDN) – Specialty Pharmacy’s Role in the Delivery and Documentation of Improved Patient Outcomes
  • Emergence of Specialty Pharmacy Data within Integrated Healthcare Systems – A Patient-Centered Model
  • Tap Specialty Product Data to Propel Commercial Success and Enhance the Patient Experience
For more information, download the complete agenda. You can register online at Drug Channels readers will save $200 off of the standard registration rate when they use discount code JHQ838.*

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

The content of Sponsored Posts does not necessarily reflect the views of Pembroke Consulting, Inc., Drug Channels, or any of its employees.

Thursday, October 06, 2016

Walgreens’ TRICARE Win: Tracking WBA’s Aggressive Preferred Network Deal Strategy

ICYMI: Walgreens Boots Alliance (WBA) has been lining up a broad range of preferred network agreements. In its latest move, Walgreens will unexpectedly displace CVS this December in the retail network for TRICARE, the healthcare program for uniformed service members, retirees, and their families. Click here to read the announcement. I provide additional details below.

TRICARE is the latest in a string of deals engineered by Stefano Pessina, our global channels overlord and executive vice chairman and chief executive officer of WBA. In case you’ve lost track, I summarize Walgreens’ recent preferred pharmacy arrangements with Express Scripts, OptumRx, Prime Therapeutics, UnitedHealthcare, and Valeant.

WBA appears to be sacrificing profits for volume. The scope and diversity of the deals, however, clearly reflects WBA’s previously articulated industry-wide partnering strategy. It also provides an intriguing contrast with CVS Health’s closed system approach.

Read on and be impressed.