Medicaid Drug Rebate Program Summit

I want to remind you about IIR's 17th Annual Medicaid Drug Rebate Program (MDRP) Summit, a Drug Channels sponsor. The event will be held from September 10 to 12 in Chicago, IL, at the Swissotel Chicago.

IIR is now projecting attendance by more than 500 public sector reimbursement professionals. The 2011 MDRP Summit sold out, so register soon. View a list of confirmed 2012 attendees, by company and job title.

IIR is offering a special 25% discount to Drug Channels readers—up to $850 in savings off the standard rate. Register with VIP code: XP1758DRUG. Thanks, IIR!

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Walgreens Rx for Growth: Beer! (rerun)

In advance of Memorial Day weekend, I'm rerunning one of my favorite posts, originally published in February 2011. Amid our festivities, let's all raise a glass for the brave men and women who died while serving in the United States Armed Forces.

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"Ah, beer. The cause of and the solution to all of life's problems."—Homer Simpson.

Walgreens (NYSE: WAG) has expanded the definition of "medicine" once again with the introduction of its own private label beer called Big Flats 1901. A six-pack sells for $2.99—less than the cost of a $4 prescription!

The beer's tagline: "It’s the water that makes it." (Legal disclaimer: It does not say "...makes it good.")

Dr. Stephen T. Colbert, DFA, provides his review of this important industry development in the video clip below.

Question: Could this be revenge for CVS Caremark's (NYSE:CVS) first-mover advantage in the drugstore industry's Chia Obama wars?

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Express Scripts' George Paz Opines on Medco, Pharmacists, and Walgreen

Today's Wall Street Journal has a provocative interview with George Paz, CEO of Express Scripts (NASDAQ: ESRX). See Express Scripts CEO's Take on the Drug Market.

In the interview, Mr. Paz weights in on Medco's cost structure, the value of pharmacist dispensing, and the Walgreen's (NYSE: WAG) dispute. Depending on your point of view, you will be either appalled or impressed by his viewpoints.

Read on for highlights along with commentary from your friendly neighborhood blogger.

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Oral Oncology Channel Battle: Payers vs. Providers

The Zitter Group recently released Managed Care Oncology Index: Winter 2012, a 331-page multi-client report.

The report is packed with useful data. Given the large pipeline of oral oncolytics, I want to highlight some intriguing stats on the channels for these products.

• Today, about half of all oral oncology volume goes through specialty pharmacy and almost one-third goes through traditional retail. The balance is split between other channels such as traditional mail-order and provider dispensing.
• Payers would prefer that a lot more volume goes through the specialty pharmacy channel. In contrast, oncology practice managers would prefer that more volume go through on-site provider dispensing.

The differences of opinion highlight another facet of the ongoing battle for control of specialty drugs. Meanwhile, as I outline below, manufacturers face difficult decisions in commercial and channel strategies.

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CLM Solutions: Innovation vs. the Status Quo (Guest Post)

Today’s guest post is from Craig Sharp, Editor at Eye for Pharma, a Drug Channels sponsor. Craig interviews David Kreutter, Vice President of Global Business Analytics and Insights at Pfizer, about the company’s Closed Loop Marketing (CLM) solution

The 2012 Sales Force Effectiveness & Commercial Excellence conference will be held June 12-14, 2012, at the Renaissance Woodbridge Hotel in Iselin, NJ. Click here for registration and Early Bird Specials.

Please contact Theo Fellgett (theo@eyeforpharma.com or 800-814-3459 Ext. 7591) with any questions about the event or this article.

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Drug Channel Profits in the 2012 Fortune 500

Time once again for my annual review of the new Fortune 500 list. In this article, I explore the relative profitability of the largest drug wholesalers, chain pharmacies, pharmacy benefit managers (PBMs), and pharmaceutical manufacturers. I also compare these groups to independent pharmacies.

Key observations from the 2012 Fortune 500 list:

• Most drug channel companies rank more highly on the Fortune 500 because they are bigger (in revenues) than pharmaceutical manufacturers.
• Drug channels companies are pretty profitable. In 2011, median profitability of drug channels companies was up slightly vs. 2010. 
• Beware of the "pennies in profit" fallacy, which reflects revenue double-counting within the channel system. Channel companies' profitability is about half of the profitability of pharmaceutical manufacturers when using an appropriate metric such as Return on Assets.
• In 2011, investors earned higher returns from drug makers than from the drug channels group. This is a switch from previous years, although the drug channels group outperformed manufacturers over the past 10 years.
• The profitability of a typical independent pharmacy is well above the median profitability of the 10 largest drug channels companies, including PBMs.

The technical notes are at the bottom. Add a comment or opinion below. Enjoy!

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