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...

Thursday, March 05, 2015

CVS Health: Newest Data on Retail-PBM Revenue Synergies

Let’s follow up on last month’s review CVS Health’s Specialty Connect offering by examining the latest disclosures about revenue synergies from CVS Health’s Maintenance Choice program.

Below, I use an obscure footnote within CVS Health’s recently released 2014 10-K SEC filing to quantify these revenue synergies. As you can see in the chart below, CVS Health’s Caremark pharmacy benefit management (PBM) business accounted for a record 35% of CVS retail pharmacies’ prescription revenues. That’s much higher than Caremark’s overall market share.

The analysis provides another motivation for Rite Aid’s acquisition of EnvisionRx. Rite Aid, however, is a multi-regional chain with prescription revenues that are one-third of CVS retail's revenues. Question to ponder: can it create the same elixir with Envision, which has revenues that are only 6% as big as Caremark's?

Tuesday, March 03, 2015

With the Cordis Deal, Cardinal Goes Its Own Way With Med-Surg

Yesterday, Cardinal Health announced its purchase of Johnson & Johnson’s Cordis medical device business. Read the company’s informative fact sheet.

The deal supports Cardinal’s medical supply focus on Physician Preference Items (PPI)—products with limited clinical differentiation but high brand loyalty from doctors. These items drive hospitals bananas, so Cardinal sees an opportunity to help its customers standardize on the lowest-cost cardiovascular, wound management, and orthopedic products.

It’s a sensible transaction that continues Cardinal’s diversification from its core drug distribution business. For its overall business mix, Cardinal is following a different path than AmerisourceBergen and McKesson. Cordis also provides Cardinal with some intriguing international expansion opportunities. See my analysis below.

Monday, March 02, 2015

IIR's 7th Annual Government Programs Summit

This is the Only Government Programs Event You Need to Attend

How many Government Programs events do you attend a year? IT ONLY HAS TO BE THIS ONE! IIR's 7th Annual Government Programs Summit on March 23-25, 2015 in Arlington is the one-stop-shop for all things government programs, merging regulatory compliance and financial calculations to maximize revenue potential. IIR is delivering the greatest number of government officials AND experts from pharma and biotechs — all under one roof! They'll provide policy answers to strategic, compliance, operational, technical and tactical issues on all things government programs.

IIR’s got you covered on:
  • 340B Program—HRSA, SNHPA, Pfizer, Vertex, Jansen, Hospira, Eli Lilly, Bristol-Myers Squibb
  • Medicare Part B & D—Sunovion, Daiichi, Actavis, Sanofi
  • Medicare & Medicaid—Jazz Pharmaceuticals, NCPDP, NACDS, GAO, Johnson and Johnson, BIO, GAO
  • States & State Supplemental Programs—Alabama, Oregon, Utah, Novartis
  • VA, FSS & TRICARE—VA Office of Inspector General, Daiichi, Amneal

Plus We're excited to announce that John Coster, Director, Division of Pharmacy, Center for Medicaid and CHIP Services (CMS) is confirmed to open on March 25th, 2015! Hear directly from him, as he provides insights and updates on:
  • Policy and operational issues affecting the Medicaid pharmacy program
  • Latest Medicaid DUR survey report
  • Issues and challenges facing the Medicaid pharmacy program

In addition to John Coster, hear from:
  • Health Resources and Services Administration (HRSA)—Krista M. Pedley, PharmD, MS, CDR, USPHS, Director, Office of Pharmacy Affairs
  • VA Office of Inspector General (VA)—Michael Grivnovics, Director, Federal Supply Schedule Division, Office of Contract Review
  • US Government Accountability Office (GAO)—Carolyn L. Yocom, Director, Health Care Team
  • National Association of Chain Drug Stores (NACDS)—Don Bell, Senior Vice President & General Counsel
  • National Council for Prescription Drugs (NCPDP)—Phillip Scott, SVP Business Development
  • Safety Net Hospitals for Pharmaceutical Access (SNHPA)—Jeff Davis, Counsel, Legal and Policy Affairs
  • Biotechnology Industry Organization (BIO)—Erin Estey Hertzog, Director, Reimbursement & Health Policy
NEW! Calculate liability and optimize accuracy and accountability at the newly included full-day summit on Gross-to-Net! Invite your GTN and finance peers to join and experience true collaboration by breaking down interdepartmental silos through candid conversations and networking you can only have onsite at the event.

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

Friday, February 27, 2015

Building a Strong Pharma Sales Approach in the New ACO Marketplace

Today’s guest post comes from two physician-leaders of major accountable care organizations (ACOs):
  • Anthony Slonim, MD, DrPH, CPE, FACPE; President and CEO of Renown Health, Reno, NV; Chair, CMR Institute’s Board of Directors
  • Jeffrey Farber, MD, MBA, CPE, FACP; CEO, Mount Sinai Care (ACO); Chief Medical Officer, Mount Sinai Health Partners (MSO), New York, NY
Drs. Slonim and Farber are thought leaders on strategic ways value-based care health systems can collaborate with industry partners to improve and shape the future of healthcare. They are also conference chairs and speakers at the upcoming ACOs and Industry: A Collaboration for Value Conference on March 26-27 in Minneapolis, MN.

Check out this thought-provoking article. There is also an interesting video of Dr. Farber embedded below.

Thursday, February 26, 2015

News Roundup, February 2014: CVS Health, Walgreens Boots Alliance, Celgene, 340B, and more

Brrrr! This year’s ultra-cold winter is not done yet. (I blame Elsa.) To stay warm, please enjoy this month's look at noteworthy new stories from the Drug Channels universe. In this issue:
  • CVS Health prepares you for the next specialty drug war
  • Stefano Pessina shares his business philosophy and vision for Walgreens Boots Alliance
  • Celgene releases a useful letter on 340B and limited dispensing networks
Plus: A long time ago in a culture that seems far, far away, vaccinations weren't viewed as a government plot to give kids autism. Watch the video below for proof.

P.S. Follow @Drug Channels for my daily updates on noteworthy news and interesting analysis.

Tuesday, February 24, 2015

CMS to Part D Preferred Pharmacy Networks: We’ll Be Watching You

This past Friday, the Centers for Medicaid & Medicare Services (CMS) released its thoroughly-titled Advance Notice of Methodological Changes for Calendar Year (CY) 2016 for Medicare Advantage (MA) Capitation Rates, Part C and Part D Payment Policies and 2016 Call Letter. Most people refer to this 172-page ode to healthcare bureaucracy as the 2016 Call Letter.

CMS’s proposed changes to Part D’s pharmacy networks will not sting as much as they did last year. In the Call Letter, CMS outlines its concerns about preferred cost-sharing pharmacy networks and proposes policing them more closely. Read my analysis below.

If you want to comment, you have every single day until March 6, 2015.

Monday, February 23, 2015

Join me at 2015 Armada Specialty Pharmacy Summit

Please join me at 2015 Armada Specialty Pharmacy Summit, which will take place on May 4-8, 2015, at the wonderful Wynn Las Vegas.

Based on personal experience, I can tell you that the Summit attracts an impressive diversity of pharmacies, manufacturers, health plans, wholesalers, hospital systems, pharmacy benefit managers, patient advocacy groups, and others. This year's program has solid business and educational programming. View the Agenda.

Below, watch a fun video review of 2014’s Summit. I can be heard (but not seen) twice. Yes, that’s me at 00.44 extolling the value of “cocktails and conversation.” J You can read my business review of the 2014 summit in Seven Trends For Specialty Pharmacy’s Future: Reflections on Armada 2014.

Read on for more details about this great specialty pharmacy event, or just register now. See you there!

Friday, February 20, 2015

Why Are Generic Drugs Getting More Expensive?

Today’s guest post comes from Kay Morgan, Vice President of Drug Products & Industry Standards Clinical Solutions at Elsevier.

Kay discusses the factors behind recent generic inflation and argues for the value of timely drug pricing data. As you may know, Elsevier’s Gold Standard Drug Database includes a wealth of drug pricing data, including such favorites as AWP, NADAC, and state MACs. Elsevier also provides Predictive Acquisition Cost (PAC), a novel acquisition-based drug price solution.

In addition to the article below, I suggest you check out Generic Drug Price Increases: Causes and Impact, Elsevier’s new white paper on this important trend.

Tuesday, February 17, 2015

New Details on CVS Health’s Specialty Connect Program

Last week’s surprising Rite Aid/EnvisionRx deal illustrates the convergence of benefit management with dispensing channels.

Based on new disclosures during CVS Health’s most recent quarterly earning call last week, Specialty Connect—the company's latest convergence offering—appears to be getting more traction. Below, I highlight how Specialty Connect alters the business economics of CVS Health’s pharmacy business.

Like Maintenance Choice, Specialty Connect challenges competing pharmacies and pharmacy benefit managers (PBMs), which can’t easily imitate this offering. Expect payers to continue adopting it—but also expect competitors to find 38 special reasons to complain.