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...

Wednesday, January 18, 2017

New 2017 Part D Enrollment Data: Walgreens and Walmart Trounce CVS in Preferred Networks

Just-released data from the Centers for Medicare & Medicaid Services (CMS) confirms that preferred cost sharing networks will continue to dominate Medicare Part D. Our exclusive analysis finds that for 2017, 73% of seniors are enrolled in Prescription Drug Plans (PDPs) with preferred pharmacy networks. The three biggest companies—Humana, UnitedHealthcare, and CVS Health's SilverScript—now account for 69% of enrollment in stand-alone Part D plans.

Below, we use the enrollment data to analyze the major pharmacy chains’ position within the 17 major multi-regional Part D plans with preferred networks. As you will see, Walgreens and Walmart are the big winners, while CVS and Rite Aid lag far behind.

As long as pharmacies are willing to accept lower reimbursements in exchange for increased store traffic, preferred networks will continue to grow. For 2017, Walgreens’ aggressive partnering strategy looks likely to result in significant prescription market share gains.

Tuesday, January 17, 2017

PBMI 22nd Annual Drug Benefit Conference

PBMI 22nd Annual Drug Benefit Conference
March 6 – March 8, 2017 | Orlando, Florida
Location: Loews Portofino Bay Hotel at Universal Orlando

The conference will kick off with an opening speech by Scott Gottlieb, M.D. Dr. Gottlieb is a practicing physician and Resident Fellow at the American Enterprise Institute. A leading expert in health policy, Dr. Gottlieb’s work focuses on providing insights into the economic and technological forces driving the transformation of healthcare.

Attendees will benefit from hearing from thought leaders and innovators who will provide insight into practical and proven strategies for effectively managing the drug benefit. The conference includes three educational tracks and continuing education credit (CE) for pharmacists, is available. Check out the conference program to see who will be there.

Conference attendees can get a head start on their conference learning experience by selecting one of two FREE pre-conference workshops to attend. Workshops will be held Monday, March 6th from 10:30 am to 12:45 pm.
  • Workshop A: Trust But Verify: A Case Study on the Value of Auditing Your PBM Sponsored by Pharmaceutical Strategies Group
  • Workshop B: Improving Patient’s Safety and Outcomes with Innovative Solutions Sponsored by Surescripts, LLC
Note: Conference registration is required to attend a workshop.

Drug Channels readers will save $255 off conference rates when they register online and use discount code PEM17.

If you have questions or need information about exhibiting or sponsorship at the conference, please contact Linda DeChant at

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

Wednesday, January 11, 2017

Yes, Commercial Payers Are Adopting Narrow Retail Pharmacy Networks

ICYMI: CVS drugstores were booted from the pharmacy networks of Blue Cross and Blue Shield of Alabama. It's more evidence for preferred and limited pharmacy networks in commercial plans. But how many payers are adopting these new narrow network models?

As far as I know, the only public answer comes from the Pharmacy Benefit Management Institute’s (PBMI) new 2016 Trends in Drug Benefit Design report. (Free download with registration.) Drug Channels again thanks Takeda Pharmaceuticals U.S.A. for having sponsored the research.

According to the PBMI’s survey data, almost half of all employers have a narrow pharmacy network. The chart below tracks the growth in different network designs. Many interrelated factors support the continued adoption of narrow networks. The savings to payers from narrow networks come primarily from pharmacies, which offer or must accept lower per-prescription margins. That’s what makes narrow networks so controversial—but also highly pro-competitive. Caveat venditor!

Monday, January 09, 2017

14th Annual World Health Care Congress

14th Annual World Health Care Congress
April 30 – May 3, 2017 | Washington, DC

Don't forget to reserve your seat at the table with Health Plan and Payer decision makers at the 14th Annual World Health Care Congress taking place April 30-May 3, 2017 in Washington, DC.

Early rates end January 12, 2017. Use promo code PC200 for an additional $200 savings off the early rates.*

The updated agenda is now available to download.

  • KEYNOTE: A Productive Conversation: Cross-Sector Initiatives to Find Affordability in Drug Pricing
  • Discuss Innovative Business Strategies Essential to Excel in a Volatile Marketplace
  • Pragmatic Approaches to Succeed at Value-Based Payment and Care
  • Develop Internal Competencies, Best Practices, and Infrastructure to Improve Population Health and Manage High-Cost Areas
  • Measure the Impact of Ambulatory Nursing in a Value-Oriented Health Care System
  • Streamline Data Sharing and Use Predictive Modeling to Prevent Complex Issues and Improve Behavioral Care Delivery
  • Assume Higher Risks for Greater Rewards in a Next Generation ACO
  • Assess Opportunities and Challenges in MACRA to Determine the Most Suitable Models for Involvement
  • Case Study: Develop a Bundle and Define an Episode of Care for Oncology
Who will be there? Click here to view a sample list of your colleagues who have already reserved their seat.

Complete your registration before January 12, 2017 using promo code PC200 for an additional $200 savings.* For an immediate reservation, call +1 781-939-2400 or reserve online.

World Congress looks forward to seeing you in DC.

*Discount not available on Government, workshop only or webcast rates. May not be combined with any other offer.

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

Wednesday, January 04, 2017

Specialty Pharmacy M&A: Our Look at 2016’s Deals

For 2016, we estimate that total prescription dispensing revenues from specialty drugs at retail, mail, long-term care, and specialty pharmacies hit a record $115 billion. Specialty dispensing revenues continue to grow at double-digit rates, which is one reason specialty drugs make up a growing share of pharmacy industry revenues.

So it’s no surprise that there is a vigorous market for the buying and selling of specialty pharmacy companies. Let’s kick off 2017 with a quick review of last year’s 14 significant specialty pharmacy mergers a & acquisition (M&A) transactions. Our list below includes only deals that were publicly announced in 2016.

I expect many more transactions in 2017. If you’re looking to pick up a fast-growing specialty pharmacy, click here for your shopping list.

Tuesday, January 03, 2017

sPCMA Business Forum 2017

sPCMA Business Forum
March 8 & 9, 2017
Hilton Bonnet Creek | Orlando, FL

The sPCMA Business Forum attracts many executives and decision makers from PBMs and the nation's largest specialty pharmacies. The two-day event offers unparalleled networking and education for individuals and companies involved in specialty drug benefit management including specialty pharmacies, PBMs, pharma/biotech manufacturers, and others.

Conference features include:
  • Receive CPE while participating in sessions led by senior industry thought leaders and decision makers
  • Timely and insightful CPE sessions
  • Dedicated time and extensive facilities for private meetings
  • Scheduled networking events with other attendees
The new PCMA conference app allows users to access the attendee list, send messages to other attendees, create a personalized schedule, and access hotel maps--all in advance of the conference!

Contact PCMA

Please contact Jenny Dawson ( with questions or to request information about the Affiliate Program and conference sponsorships.

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

Friday, December 23, 2016

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

Let's wrap up 2016 with a super popular chart that untangles prescription economics—the perfect present for a curious member of your family.  Click here to see the original post and comments from October 2016.

You should also check out Follow the Dollar: The Movie. See you in 2017!

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.

Thursday, December 22, 2016

How Specialty Pharmacy Is Penetrating Buy-and-Bill Oncology Channels (rerun)

Last week, CMS officially scrapped its ill-conceived Medicare Part B Payment Model "experiment."  That's good news (for now) for oncology practices that buy-and-bill provider-administered drugs. (Click here to follow the buy-and-bill dollar.)

Today's rerun highlights specialty pharmacies' significant role in disrupting this buy-and-bill channel. As a companion article, check out The Decline and Fall of Physician Buy-and-Bill For Specialty Drugs, which shows how higher-cost hospital outpatient settings have been crowding out lower-cost physician offices.

Don't let the CMS move make you complacent. Buy-and-bill will be changing. (Click here to see the original post and comments from July 2016.)

The distribution channel for provider-administered oncology drugs is undergoing significant change—notwithstanding the Centers for Medicare & Medicaid Services’ (CMS) misguided and controversial Part B Drug Payment Model.

As you will see below, pharmacies—via white and brown bagging—have displaced buy-and-bill distribution channels for about one-quarter of oncology products. For the remaining purchases, community oncologists still rely on traditional buy-and-bill wholesale distribution channels. Hospital-based practices, however, are more likely to source products from the hospital’s pharmacy.

This shift has important implications for manufacturers’ channel strategies, specialty pharmacies’ business growth, distributors’ share of channel volume, and the expansion of 340B pricing to non-340B providers. When you eliminate the impossible, whatever remains, however improbable, must be the truth.

Wednesday, December 21, 2016

Why the Walgreens/Prime Deal Could Transform the PBM Industry (rerun)

Yesterday, Fred's Inc. announced its acquisition of 865 Rite Aid stores, thereby clearing the way for the Walgreens-Rite Aid deal to close. Today's rerun reviews Walgreens' new alliance with Prime Therapeutics. Fun fact: This article was the most viewed Drug Channels post of 2016! Click here to see the original post and comments from September2016.

ICYMI: Last week, Walgreens Boots Alliance (WBA) and Prime Therapeutics rolled out a highly innovative partnership. It could have wide-ranging implications for the drug channel’s next phase.

This novel union aligns a pharmacy benefit manager (PBM), retail pharmacy chain, and health plans via joint ownership of a new mail and specialty pharmacy company. If executed properly, it will be a best-of-breed business model that could reshape the PBM and pharmacy industries. For manufacturers, organized customer management just got even more complicated.

The new business could also pose a serious challenge to pure-play PBMs that lack a health insurer partner or an economically-aligned retail dispensing channel. Below, I compare the capabilities of the new business those of the four largest PBMs.

Jim DuCharme, president and CEO of Prime Therapeutics, told me: “The PBM business model needs transforming. Prime wants to have a significant influence on transforming the PBM business before others try to fix it.” I am normally immune to hype, but he could be right. Read on and see if you agree.