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, April 25, 2017

Which PBM Best Managed Drug Spending in 2016: How Did OptumRx Compare?

In Which PBM Best Managed Drug Spending in 2016: CVS Health, Express Scripts, MedImpact, or Prime?, I examined the 2016 drug trend reports from four leading pharmacy benefit managers (PBMs). OptumRx, the PBM business of UnitedHealth, released its report too late to be included in that analysis.

The charts below remedy this omission. The data now include five major PBMs, which accounted for more than 80% of equivalent prescription claims in 2016. After we add OptumRx’s results, the claims-weighted average increase in drug spending for 2016 was only 3.3%.

These results again confirm that the supposed drug spending problem is a myth. However, some patients experience significant out-of-pocket cost increases, due largely to cost-shifting by plan sponsors. With such low overall spending growth, the next battle will be over how best to share the savings from PBM-negotiated rebates.

Monday, April 24, 2017

CBI’s 13th Commercial Contract & Chargeback Excellence

CBI's 13th Commercial Contract & Chargeback Excellence
June 21-22, 2017 | Parsippany, NJ

Take a deep dive into improving the wholesaler chargeback, navigating class of trade schema complexities, streamlining membership management and optimizing contract administration at CBI’s 13th Commercial Contract & Chargeback Excellence. By illustrating software solutions, case studies and perspectives from leading distribution partners, this conference is a comprehensive forum for pharmaceutical professionals to learn best practices and gain strategies to improve contract operations and administration.

Gain Actionable Takeaways From Speakers Including:
  • Marijo Bustos, Director, Government Programs and Commercial Compliance, ProMetic BioTherapeutics, Inc.
  • Lisa Ellington, Senior Manager, Contract and Chargeback Operations, McKesson
  • Leonard Fairfield, Director, Contract Operations and Analytics, Actelion Pharmaceuticals US
  • Harry Norsworthy, Associate Principal, Vizient
  • Todd Cox, Senior Manager, Government Pricing and Contracts, Gilead Sciences
  • Donna White, Vice President, Contracts and Compliance, Chiesi USA Inc.
  • Sherice Koonce, Director, Contracts, West-Ward Pharmaceuticals
  • Paula Martins, Director, Commercial Operations, Helsinn Therapeutics (U.S.), Inc.
  • Mandy Talley, Manager, Contract Administration – Managed Healthcare Services, Lilly USA, LLC
  • Jill Page, Director, Government Pricing Strategy Analysis, Fresenius Medical Care
  • Andrew Wilson, Vice President, 340B Solutions, McKesson
  • And more!
Interactive Discussions Surrounding:
  • Changing dynamics impacting the commercial pricing and contracting landscape
  • New strategies of risk-share agreements and value-based contracting
  • 340B Program changes impacting business operations and strategy
  • Benchmarking and organizational best practices for membership efficiency
  • Chargeback adjudication for 340B contract pharmacies
  • Efficiencies of med surg chargeback and roster management
  • Chargeback management innovations, system automation and contract analytics
  • Enhancing communication to facilitate wholesaler, GPO and manufacturer alignment
Download the complete agenda here, and visit for further details and to register. Drug Channels readers will save $400 off of the standard registration rate when they use discount code MHY489.

* *Cannot be combined with other offers or used towards a current registration. Cannot be combined with special category rate or non-profit 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, April 21, 2017

How Manufacturers Can Benefit From Unified Specialty Support Services

Today’s guest post comes from Tom Doyle, Executive Vice President of Commercial Solutions at H. D. Smith.

To prepare for impending market changes, Tom suggests that a manufacturer’s commercial team partner with a flexible, integrated services provider to increase market share and optimize the patient journey. He also discusses mid-tier specialty products and the need for such cost-effective solutions as Triplefin's Hub-Lite approach.

Click here to download H.D. Smith’s free white paper on specialty product launch planning. You can also visit H.D. Smith’s companies at Booth #200 during Asembia’s 2017 Specialty Pharmacy Summit in Las Vegas.

Read on for Tom’s insights.

Wednesday, April 19, 2017

Cardinal Health’s Unhappy Profit Surprise: The Coevolution of Pharmacy Buying Groups and Wholesaler Economics

Yesterday probably didn’t turn out as well as Cardinal Health had expected.

The good news: The company announced the acquisition of Medtronic's Patient Care, Deep Vein Thrombosis and Nutritional Insufficiency businesses for $6.1 billion in cash.

The bad news: Cardinal sharply lowered its outlook for future profits from its pharmaceutical distribution business.

The company cited lower generic drugs prices and “sell-side" pressure from pharmacy customers as two primary causes of its financial woes. Wall Street was unhappy: Cardinal stock closed down a whopping 11%. McKesson and AmerisourceBergen stocks fell in sympathy.

Cardinal Health’s projected profit downturn illuminates a dilemma facing drug wholesalers:
  • Generic buying consortia of wholesalers and pharmacies have reduced wholesalers’ acquisition costs for generic drugs
  • Independent pharmacies—the most profitable customers of wholesalers—are successfully using their own buying groups to extract lower prices from wholesalers
Independent pharmacies have been backed into a corner—and have responded by pushing back against their wholesale suppliers. Cardinal’s warning highlights the coevolution of profits within the pharmacy channel ecosystem. Expect wholesalers to be increasingly desperate to make up these lost funds.

Monday, April 17, 2017

How to Connect With Drug Channels at #Asembia17

In two weeks, Drug Channels Institute and Pembroke Consulting will hit Las Vegas for Asembia’s 2017 Specialty Pharmacy Summit, being held at the wonderful Wynn Las Vegas.

Here are three ways that you can interact with us in Las Vegas:

1) Join me at the opening Featured Session.
On Monday May 1, I’ll help kick off the Summit with the Featured Session Specialty Pharmaceuticals and Pharmacy: Today, Tomorrow and Beyond. I'll be joined by Doug Long from QuintilesIMS and Eric Percher from Barclays Capital. See you in the Encore Ballroom at 8 AM!

2) Learn how Drug Channels can help you.
To discover how you can reach the large and growing Drug Channels audience, you can speak personally with my wife and business partner, Paula Fein, M.S.Ed. Paula is Drug Channels Institute’s VP of Business Development. FYI: In the picture, she's on the left.

Email her at and she’ll be happy to meet with you.

In the meantime, check out the 2017 Drug Channels Media Kit for an overview of the site, our traffic, and opportunities for sponsored guest and event posts.

3) Just say hello!
I love meeting and talking with Drug Channels readers, so please introduce yourself. But don’t worry: It will all be off the record. What we discuss in Vegas will stay in Vegas. ;)

See you soon!

P.S. To prep for the Summit, check out Chapter 3 (“Specialty Drugs and Specialty Pharmacies”) of our 2017 Economic Report on U.S. Pharmacies and Pharmacy Benefit Managers.

Thursday, April 13, 2017

Exclusive Update: The State of Specialty Pharmacy Accreditation in 2017

We estimate that for 2016, retail, mail, specialty, and long-term care pharmacies dispensed about $115 billion in specialty pharmaceuticals. (See Our Exclusive 2021 Outlook for Specialty Pharmacy Prescription Revenues.) How many specialty pharmacies are operating in the market? What types of organizations own these pharmacies?

With the help of a renowned mathematician (pictured at right), we collected data about specialty pharmacy accreditation and then categorized each pharmacy location based on ownership. Our exclusive findings:
  • The number of accredited specialty pharmacies is still booming. We counted more than 2,500 pharmacy locations with specialty accreditation. (But see our important caveat about this figure below.)
  • Pharmacy locations owned by healthcare providers—such as hospitals, health systems, physician practices, and providers’ group purchasing organizations—were the fastest-growing category of accredited specialty pharmacies.
Bottom line: A growing number and diversity of pharmacies are battling for control of the specialty market. Pharmacies owned by PBMs, wholesalers, insurers, retailers, and providers can now prove that they are special. Manufacturers and payers will need to figure out how to handle this increased competition and the associated demands for new network designs.

Tuesday, April 11, 2017

Our Exclusive 2021 Outlook for Specialty Pharmacy Prescription Revenues

The specialty boom continues to drive the pharmacy industry’s revenue growth. We estimate that in 2016, retail, mail, long-term care, and specialty pharmacies dispensed about $115 billion in specialty pharmaceuticals. Specialty drugs accounted for 28% of the pharmacy industry’s prescription dispensing revenues.

We project that in 2021, the pharmacy industry’s revenues will be about $572 billion—and that specialty drugs will account for 42% of that figure. More details below.

The growth of specialty drugs is reshaping the pharmacy and pharmacy benefit management (PBM) industries. This expansion is also drawing hospitals, health systems, and physician practices into the market. Later this week, we’ll take a closer look at the evolving landscape of specialty pharmacy providers.

Monday, April 10, 2017

Medicaid Drug Rebate Program Summit

Medicaid Drug Rebate Program Summit
September 11-13, 2017 | Chicago, IL

Join KNect365 for the 22nd year of MDRP this September 11-13, 2017 at the Marriott Magnificent Mile in Downtown Chicago, IL. This is your opportunity to benchmark best practices and gain solutions to overcome new operational challenges brought on by AMP Final Rule, 340B, Medicaid Expansion, Class of Trade, Fair Market Value, FSS, VA, OIG, and other critical government programs.

See why this is THE ONE MDRP event you can’t afford to miss!

Year after year, MDRP Chicago has continued to be the authoritative gathering for everything pricing, rebates, contracting, and collaboration. Ensure you have the most comprehensive educational experience over three days with unparalleled access to government officials creating regulatory rules, the industry leaders interpreting them, and the pharmaceutical executives implementing them.

Register Now to SAVE an additional $100 off the Current Rates!
(A total of $700 in savings!)
Use Code P2258DRUG

Collaborate with your peers and benchmark best industry practices to:
  • Navigate Regulatory Hurdles
    • Understand and comply with state processes, operations and requirements
    • Address the impact of AMP Final Rule, 340B Guidance, along with State Policy changes
  • Minimize Wasted Resources
    • Develop strategies to streamline pricing and reporting
    • New Interactive Think Tank & Innovation Theatre - Hear from the industry's leading service providers as they showcase new technologies and products to improve operations
  • Optimize Finances
    • Calculate liability and improve accuracy and accountability
    • Discover the latest in Automation & Customization of finance systems
MDRP offers attendees the opportunity for face-to-face meetings between states and manufacturers during our exclusive Dispute Resolution Meetings. These one-on-one meetings can help you realize millions in potential savings!

For 2017, KNect365 has 14 confirmed states participating in MDRP:
  • Alaska
  • Arizona
  • Arkansas
  • Colorado
  • Delaware
  • Idaho
  • Kentucky
  • Michigan
  • Oregon
  • New Hampshire
  • North Carolina
  • South Carolina
  • Tennessee
  • Utah
Stay ahead of the curve by getting the best networking, education, and technology at MDRP Summit 2017.

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

Friday, April 07, 2017

Health Systems Disrupt the Specialty Pharmacy Market to Improve Patient Care

Today’s guest post comes from Vizient™ University Health System Consortium, the nation's largest network of academic medical centers (AMCs) who collaborate to exchange and advance knowledge. Vizient is the nation's largest healthcare performance improvement company.

The five authors of this article are employees of Vizient AMC members. Four of the five are leaders and participants of the organization's Pharmacy Network and its Specialty Pharmacy Committee.

The authors argue that specialty pharmacy programs at health systems provide significant advantages to hospitals, health systems, and patients. They highlight the specific benefits for organ transplant and hepatitis C patients.

Read on for their interesting perspectives.