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...

Friday, April 17, 2015

Addressing the Challenges of Non-Adherence

Today’s guest post comes from Magnar Kvilhaug, RPh, MBA and Kathleen Kvilhaug RPh, of Odin Pharmacy Innovations.

They describe AppaGrapha, a new free mobile app for improving patient adherence to drug therapy. This intriguing app allows patients to monitor their own therapy, provides feedback on adherence, confidentially shares data with a healthcare provider or pharmacist, and more. Details below. Android users can download the free AppaGrapha mobile app here. The iOS version will be available soon.

For more details about AppaGrapha, email Magnar Kvilhaug or Kathleen Kvilhaug. You can also visit them in booth #326 at the upcoming 2015 Armada Specialty Pharmacy Summit.

Wednesday, April 15, 2015

Retail Generic Drug Inflation Eases, but the FDA Keeps Prices High

Retail generic drugs usually get cheaper over time, but my previous analyses have documented substantial generic inflation. Our latest exclusive investigation, however, finds that generic inflation may be easing.

During the first quarter of 2015, generic drug price increases were low compared with our two most recent examinations. We also found no drugs with mega-increases (exceeding 1,000%).

While inflation has slowed, generic drugs that have experienced cost increases haven’t necessarily become cheaper. As I show below, the actions of the Food and Drug Administration (FDA) have prevented new supply from entering the market.

But as the FDA’s backlog of 4,000 applications starts to clear, generic costs will start deflating. Until then, expect some generics to remain costly and inflation to continue.

Monday, April 13, 2015

Commercial Contracts & Chargeback Management

11th Commercial Contracts & Chargeback Management
June 22-23, 2015 | Philadelphia, PA

CBI’s 11th Commercial Contracts & Chargeback Management forum focuses on ways to improve the wholesaler chargeback, manufacturer profitability and GPO membership maintenance. Gain strategies and tools for streamlining these important processes and, ultimately, retaining more revenue for the organization.

Industry thought leaders from Amerinet, Inc, Arbor Pharmaceuticals, Daiichi Sankyo, Eisai, Johnson & Johnson, King & Spalding, LLP, McKesson Corporation, Novo Nordisk and more will present viewpoints on how to:
  • Streamline and automate contract and chargeback administration
  • Assess challenges related to receiving 340B entity reconciliation
  • Validate contract price eligibility through the EDI chargeback process
  • Certify membership and oversee terms of contracts
  • Minimize revenue leakage or overpayment of chargebacks
  • Respond to drug shortage's negative impact on pricing
Visit for more information. Drug Channels readers will save $400 off of the standard registration rate when they use code PYE386.*

*Cannot be combined with other offers or used towards a current registration. Cannot be combined with special category 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 10, 2015

Insights from the Electronic Prior Authorization (ePA) National Adoption Scorecard

Today’s guest post comes from Perry Lewis, VP of Industry Relations at CoverMyMeds.

Perry discusses results from CoverMyMeds’ new Electronic Prior Authorization (ePA) National Adoption Scorecard. For those who don’t know, ePA connects all participants to provide real-time information for the PA decision-making process.

Perry explains which industry sectors are adopting ePA, discusses how ePA adoption affects different industry stakeholders, and describes how to pick the best ePA solution. He provides interesting insights on healthcare’s interconnected, technology-enabled future.

To learn more about CoverMyMeds or the Electronic Prior Authorization (ePA) National Adoption Scorecard, email Perry Lewis. You can also meet up with CoverMyMeds National Sales Director, Matthew Coyle, at the 2015 Armada Specialty Pharmacy Summit. Email Matthew to arrange a meeting.

Thursday, April 09, 2015

Two Important Updates on Zarxio and Biosimilar Reimbursement

In Zarxio: How Channel Dynamics Will Limit the First U.S. Biosimilar, I argue that reimbursement and channel dynamics will slow adoption for Zarxio. Zarxio, a provider-administered specialty drug, is a non-interchangeable biosimilar of Amgen’s Neupogen.

Today, let’s catch up on two important items regarding reimbursement for biosimilars:
  • In my original article, I didn’t mention the Affordable Care Act’s special reimbursement formula, which provides additional reimbursement for the biosimilar. Below, I explain this methodology and provide a mathematical example using Neupogen and Zarxio.
  • Last week, the Centers for Medicare & Medicaid Services (CMS) released a brief Q&A with new details on biosimilars. Highlights below.
Taken together, this information still supports my original conjectures about a moderate pace for adoption for biosimilars paid under the medical benefit—and implies some manufacturer pricing strategies that could influence adoption..

Tuesday, April 07, 2015

Will Walgreens Boots Alliance Buy Rite Aid?

Believe it or not, a crazy rumor about a Walgreens Boots Alliance (WBA)-Rite Aid transaction is making the rounds on Wall Street.

The rumor accelerated after recent comments by Stefano Pessina, WBA’s acting CEO and current global channels overlord. (See the Reuters article below.) Below, I highlight other recent articles that are feeding the rumor, along with perspective from two reputable investment banks.

I'm skeptical that such a deal will happen, especially because there are other logical acquisition targets (AmerisourceBergen, Diplomat Pharmacy, ULTA Beauty). But given Pessina’s track record and ambitions, we can’t ignore the possibility.

Read on and see if you agree. In case you are wondering: this is not an April Fool's post.

Monday, April 06, 2015

Join Me at the Pharmacy Channel Strategies for Specialty Products Conference

Pharmacy Channel Strategies for Specialty Products
June 23-24, 2015 | Philadelphia, PA

CBI’s Pharmacy Channel Strategies for Specialty Products is designed for key specialty stakeholders to deep dive into the collaboration between specialty pharmacies, retail pharmacies, hospital systems and bio/pharma manufacturers. Join the crowd this June to stay ahead of the curve and optimize your network to ensure patient access and adherence! Visit for more information.

Don’t miss the chance to gain insight form prominent stakeholders and thought leaders, including:
  • Adam J. Fein, Ph.D. President, Pembroke Consulting, Inc.; CEO, Drug Channels Institute
  • William Roth, Founding Partner, Blue Fin Group
  • Bruce Phelan, Principal Consultant, Blue Fin Group
  • Ray Tancredi, Vice President, Specialty Pharmacy, Walgreens
  • Mark Montgomery, President and CEO, Axium Healthcare Pharmacy
  • Greg Drew, R.Ph., President, Value Drug Company
Drug Channels readers will save $400 off of the standard registration rate when they use code ETZ345.* Register today!

*Cannot be combined with other offers or used towards a current registration. Cannot be combined with special category 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.

Wednesday, April 01, 2015

BREAKING NEWS: Rite Aid Acquires Candy Maker, Launches New Rewards Program

Wow, the hits keep coming. This morning, Rite Aid announced its acquisition of Just Born, the privately-held Bethlehem, PA, company best known for making delicious Marshmallow Peeps. Read the press release.

To coincide with the deal, Rite Aid also announced a new Peepness+ rewards program. This program unites the drugstore’s front-end and pharmacy sales by allowing consumers to earn Peepness+ "mallow points." The points never expire, so customers can use accrued benefits throughout their lifetime.

The program arrives just in time for the spring candy harvest. Here’s what Troy McClure, Rite Aid's VP of Tobacco, Candy, and Snack Chips (TCSC)  told me: “We want to build a lifetime relationship with our customers. For instance, you’ll earn points whenever you spend more than $9.75 on any avian or leporid Peeps marshmallows. Later, when you become an insulin-dependent diabetic, you can redeem your mallow points at our pharmacy.”

Added McClure: “At Rite Aid, we have long viewed candy products, and really the whole TCSC category, as essential to establishing our drugstores as true healthcare destinations.”

Folks, here’s another powerful example of fauxversification. Read on for my competitive analysis of the drugstore industry’s latest innovation.

Tuesday, March 31, 2015

OptumRx Sails Away with Catamaran: Deal Analysis and Industry Implications

Yesterday, UnitedHealthcare, which operates the OptumRx pharmacy benefit manager (PBM), announced its acquisition of PBM Catamaran. Read the press release.

Catamaran has long been considered a likely acquisition target in the consolidating PBM business. Yet I was surprised by the timing and the buyer. UnitedHealthcare will pay a 27% premium, which will probably deter potential bidders.

Below, I review the impact on PBMs, manufacturers, wholesalers, and pharmacies. I also consider how the deal will affect the larger companies.

Sadly, Catamaran’s exit will leave the industry high and dry on nautical metaphors…but not before today’s post docks.