Friday, November 06, 2009

CVS Caremark: Pharmacy Gain, PBM Pain

CVS Caremark disclosed unexpected problems in its PBM business yesterday, spooking investors and sending its stock down by 20%. See Dow Jones’ coverage: CVS' Pharmacy Benefit Struggles Renew Merger Benefits Debate

Judging by the financials, it sure looks like CVS Caremark has sacrificed its PBM business for the benefit of the retail pharmacy business. They are also having trouble explaining how a PBM customer gains when a brick-and-mortar pharmacy is paired with a benefit management business.

Adding insult to injury, CVS Caremark also disclosed that the Federal Trade Commission (FTC) has opened a formal inquiry into its business. Ouch.

Pembroke Consulting retainer clients and Gerson Lehrman Group customers should feel free to schedule phone calls with me for additional comments beyond what's in this post.

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Thursday, November 05, 2009

Dilbert on Drug Marketing

As a follow-up to Tuesday's post, management guru Scott Adams shows how promotion by a pharmaceutical manufacturer affects physicians' prescribing decisions.

Dilbert.com

Of course, this topic may not be funny for much longer given 40,000 recently announced job cuts by Johnson & Johnson, Pfizer, and Astra-Zeneca or the 16,000 cuts planned by Merck.

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Tuesday, November 03, 2009

How Generics Change the Market

I just came across an intriguing new study that examines how generic drug entry affects prescription volume and manufacturer revenues. See TIME RELEASE: The Effect of Patent Expiration on U.S. Drug Prices, Marketing, and Utilization by the Public

The paper poses an interesting question and contains some neat data on post-generic market evolution—brand market share, prices, promotional expenses. I’m a bit underwhelmed by the author’s conclusions. So, I suggest that you enjoy the pretty pictures and perhaps incorporate the conceptual ideas into your forecasting models.

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Friday, October 30, 2009

Noteworthy News Stories

Here are some worthwhile articles for your reading pleasure. As always, I welcome story links from Drug Channels readers.

As a special treat, I am including a picture of my Halloween costume at the bottom of the post. Happy Halloween!

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Thursday, October 29, 2009

Should pharmacies be liable for stupid patients?

Yesterday’s Wall Street Journal had a scary cover story titled Case Spurs Pharmacies' Fears of Lawsuits Over Drug Abuse. (Click here for a free summary if you can't access the article.)

The article describes a lawsuit against a group of pharmacies for dispensing prescription painkillers to a woman who killed someone while driving high on hydrocodone.

Just my $0.02, but I think it’s ludicrous to pin the blame on a pharmacy for the deranged behavior of one consumer. The pharmacy chains are being dragged into this case because they have deep pockets, not because they should be responsible for the tragedies described in this article.

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Wednesday, October 28, 2009

Best Of

There are almost 400 posts on Drug Channels. New readers often ask me for a list of the "best" ones.

Here is my periodically updated selections.
Unfortunately, some of my best posts were very timely and/or humorous analyses of news events, which means those posts now sound quite dated and sort of lame.

I am listing the best posts for answering the top questions that people ask me. As far as I know, these posts are still valid although some of the information may have been superseded by new developments.

I wrote the U.S. Pharmacy Industry: Economic Report and Outlook to provide an integrated analysis of these (and other) questions. You should check it out for more details.

Who are the biggest pharmacies?

How much money do pharmacies make?

Who does (and will) pay for prescription drugs in the U.S.?What are the economics of mail-order pharmacy?
What is Wal-Mart's strategy in the pharmacy industry?
What's going on with Average Wholesaler Price and First Databank?

What is the controversy about CVS Caremark's Maintenance Choice program?

Please let me know if I missed one your favorites.

Adam

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