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, May 06, 2016

Seven Pharmacy and Channel Implications of the New AMP Final Rule (rerun)

This week, I’m rerunning some popular posts while I attend the 2016 Armada Specialty Pharmacy Summit. Click here to see the original post and comments from January 2016.

Well, pierce my ears and call me drafty! Late last week, the Centers for Medicare & Medicaid Services (CMS) finally released its long-overdue final rule regarding Average Manufacturer Price (AMP) under the Patient Protection and Affordable Care Act (ACA). Since 2012, CMS has announced—and then delayed—the release of the final rule at least five times. Makes you proud to be a taxpayer, doesn’t it?

Savor all of the bureaucratese for yourself in the oh-so-brief 658-page rule, known to the cool kids as CMS-2345-FC. (Note: Not the name of a new Star Wars droid.)

The rule is effective April 1, 2016. (Seriously.) Below, I highlight what it could mean for drug channels, including observations on:
  • Prescription reimbursement
  • Pharmacy profits
  • Manufacturers’ channel strategies
  • Bona fide service fees
  • Manufacturer-retail direct distribution arrangements
  • And more!

Thursday, May 05, 2016

Independent Pharmacy Economics: Profits Steady, but Sales Down (Maybe) (rerun)

This week, I’m rerunning some popular posts while I attend the 2016 Armada Specialty Pharmacy Summit. Click here to see the original post and comments from November 2015.

Time for my annual look at independent pharmacy owners’ business economics, drawn from the recently released 2015 National Community Pharmacists Association (NCPA) Digest, Sponsored by Cardinal Health. Here's the press release: NCPA Digest: Adherence, Diversified Revenue Critical for Community Pharmacies.

The data reveal that independent pharmacy owners are doing better than you might expect. In 2014, the average pharmacist owning a single pharmacy earned about $228,000. The number of independent pharmacies continues to hold steady.

In the NCPA Digest sample, average per-prescription revenue declined, which reduced gross profits and average prescription revenues. On the other hand, IMS Health data imply independents' revenue and prescriptions are growing, not declining. Hmmm.

As always, I welcome your constructive and civil comments. Please remember our Drug Channels philosophy, courtesy of the late senator Daniel Patrick Moynihan: "Everyone is entitled to his own opinion, but not his own facts."

Wednesday, May 04, 2016

Inside McKesson’s Acquisition of Biologics Specialty Pharmacy (rerun)

This week, I’m rerunning some popular posts while I attend the 2016 Armada Specialty Pharmacy Summit. Click here to see the original post and comments from February 2016.

Yesterday, McKesson announced its acquisition of two significant oncology businesses: Vantage Oncology and Biologics. Click here to read the press release.

McKesson provided only general statements about its motivations behind the $1.2 billion deals. Fear not, dear reader. Below, I offer two key hypotheses about McKesson’s strategic considerations in purchasing the Biologics specialty pharmacy.

This much is certain: For manufacturers, the deals further illustrate the emergence of organized customers that cross traditional commercial and channel boundaries.

Tuesday, May 03, 2016

Solving the Mystery of Employer-PBM Rebate Pass-Through (rerun)

This week, I’m rerunning some popular posts while I attend the 2016 Armada Specialty Pharmacy Summit. Click here to see the original post and comments from January 2016.

Manufacturers pay billions in rebates to pharmacy benefit managers (PBMs). How much of that money do PBMs share with their plan sponsor clients?

As far as I know, the only public answer comes from the Pharmacy Benefit Management Institute’s (PBMI) new 2015-2016 Prescription Drug Benefit Cost and Plan Design Report. (Free download with registration.) Drug Channels again toasts Takeda Pharmaceuticals North America for having sponsored the research.

According to the PBMI’s survey data, only three-quarters of employers directly receive a piece of manufacturer rebates. Some employers get 100% of the rebates. Others get a portion, sometimes with a guaranteed minimum amount.

Below, I also highlight PBMI data about the prevalence of spread pricing (as opposed to pass-through pricing) as a means for employers to compensate PBMs. Despite what you may have heard, many employers still seem to prefer spread pricing models. Ruh roh!

Monday, May 02, 2016

Pharmaceutical Pricing Boot Camp

10th Annual “Big Four” Pharmaceutical Pricing Boot Camp
May 23-25, 2016 | The Carlton Hotel | New York, NY

American Conference Institute’s 10th Annual “Big Four” Pharmaceutical Pricing Boot Camp is an intensive training course designed to provide you with a complete understanding of core pricing competencies.

Call 888-224-2480, or register online at Drug Channels readers are entitled to 10% off the standard registration rate with discount code: P10-899-DCH16.

ACI has assembled a faculty of the leading government authorities on “Big Four” pricing and pharmacy benefits programs along with expert pricing practitioners. This distinguished faculty will make sense of complicated terminology and pricing calculations while teaching you how to navigate the complexities of working with the “Big Four” agencies:  VA, DoD, PHS, and Coast Guard.

By providing solutions for the calculation, contracting, and operational challenges many pharmaceutical manufacturers face as a result of federal pricing, this conference will allow you to work more effectively with the “Big Four” agencies. This unique opportunity to have your questions answered directly by the government agencies administering federal payor programs will prove invaluable when attempting to improve and streamline practices.

For those attendees seeking a primer on “Big Four” pricing, the pre-conference workshop—“Big Four” Pricing 101—is a great opportunity to learn the fundamentals of federal pricing and will prepare you for the more advanced discussions that will take place during the main conference. In addition, new this year, attend the Final AMP Rule Boot Camp on Monday, May 23, 2016 and learn about how this final rule impacts manufacturers’ drug pricing and discount strategies. For more information and to register, visit

Click here to download the “Big Four” conference brochure. Register now to ensure your place at what is sure to be a sold-out event.

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

Friday, April 29, 2016

Digital Patient Adherence Strategies for Specialty Pharmacy

Today’s guest post comes from Scott Pribyl, CEO, mRx Ventures. Scott provides a useful primer on how patient care can be improved using coordinated, cloud-based technology. He explains how SamplifyRx, an innovative technology solution for specialty pharmacy, can increase adherence and streamline the patient experience for all stakeholders.

Next week, Scott will be at the 2016 Armada Specialty Pharmacy Summit in Las Vegas. Email him at to learn more about SamplifyRx’s technology and set up an in-person meeting.

Visit for a cool demo that was created using the SamplifyRx API. (Free registration)

Thursday, April 28, 2016

Drug Channels News Roundup, April 2016: Amgen, Biosimilars, Pharmacy Profits, Drug Pricing, and CVS

Spring has finally sprung here at the Drug Channels worldwide headquarters! Take your allergy meds and then enjoy this month’s selection of pollen-free news from the Drug Channels universe.

In this issue:
  • Amgen releases a nifty new report on biosimilars
  • My $0.02 on the outlook for chain drugstores
  • The New York Times delves into the complexities of drug pricing
Plus, Saturday Night Live mocks CVS drugstore’s employees and customers.

P.S. Don’t forget to follow @DrugChannels on Twitter for daily updates on news and commentary that I pluck from the interwebs.

Tuesday, April 26, 2016

Why European Pharmacy Markets Are Less Efficient Than the U.S. Market

The Pharmaceutical Group of the European Union (PGEU), a trade association that represents community pharmacies throughout the EU, recently released its 2015 Annual Report. (Free download) The report is filled with loads of interesting data about the EU pharmacy industry, which shares many issues with the U.S. market.

One significant difference, however, is the greater efficiency of the U.S. pharmacy market.

Below, I crunch the PGEU data and compare the five biggest EU countries with the United States. As you can see, the U.S. has a much more competitive marketplace.

Extensive regulatory barriers may make the EU look like a paradise for independent pharmacies. Alas, such protections inconvenience consumers and raise drug costs. C’est la vie!

Monday, April 25, 2016

Commercial Contract & Chargeback Excellence

CBI’s 12th Commercial Contract & Chargeback Excellence
June 16-17, 2016 | Philadelphia, PA

CBI’s annual meeting on Commercial Contract & Chargeback Excellence focuses on ways to improve the wholesaler chargeback, navigate class of trade schema complexities, streamline membership management and optimize contract administration and operations. 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 streamline communication and processes.

Benefit from robust workshops, interactive discussions and invaluable learning on generic pricing, 340B evolution, GPO consolidation, AMP Rule impacts, membership validation, class of trade designation, chargeback processes and much more.

Speakers include representatives from AmerisourceBergen, Aurobindo Pharma, Chiesi USA, Deloitte, Depomed, Dr. Reddy’s, Fresenius Kabi, H.D. Smith, Managed Health Care Associates (MHA), McKesson, Valeant, West-Ward Pharmaceuticals, Zydus Pharmaceuticals and more.

For more information, please download the complete agenda or visit Drug Channels readers will save $400 off of the standard registration rate when they use discount code CES453.*

*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.