Drug Channels 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. Drug Channels reaches an engaged, loyal and growing audience of more than 18,000 subscribers. Learn more...

Thursday, July 27, 2017

Drug Channels News Roundup, July 2017: CVS, Anthem, Specialty Pharmacy, INSYS, and Big Box Pharmacy

Cut through the steamy summer haze with our refreshing selection of articles and insights. In this issue:
  • CVS drugstores aim for a healthier look
  • Anthem dissects specialty pharmacy management
  • Takeaways from an Insys employee’s guilty plea over prior authorization
  • Profiling pharmacies inside supermarkets and mass merchants
Plus, The Onion reports on the launch of generic internets following patent loss. Scary!

P.S. Follow @DrugChannels on Twitter for my daily curated selection of news and commentary.

Tuesday, July 25, 2017

What Will Happen to Rite Aid’s Struggling EnvisionRx PBM?

Let’s revisit the Walgreens Boots Alliance—Rite Aid deal. Instead of an acquisition, the revised transaction calls for Walgreens Boots Alliance (WBA) to buy 2,186 Rite Aid stores and three distribution centers for $5.2 billion. WBA will also pay a $325 million termination fee to Rite Aid.

If the deal receives regulatory approval, Rite Aid will shrink to a multi-regional pharmacy chain with about half as many stores. It will, however, hold onto EnvisionRx, the pharmacy benefit manager (PBM) that it acquired in 2015.

Unfortunately, EnvisionRx remains a small, struggling regional PBM with limited growth. Its revenues in 2017 have been declining. There also appears to be no material synergies between Rite Aid’s retail pharmacy business and its Envision PBM.

Last week, Rite Aid disclosed that it will use $4.9 billion of its $5.5 billion windfall to repay debt. (Pro forma financials below.) Given the performance troubles that I outline below, I wonder whether investors will trust the current management team to spend the cash wisely.

Monday, July 24, 2017

PBMI 2017 Specialty Rx Forum

PBMI 2017 Specialty Rx Forum
September 12, 2017
Hyatt Regency Hotel | Downtown Chicago

You’re invited to join PBMI for its first regional Specialty Rx Forum in downtown Chicago at the Hyatt Regency Hotel. This one-day meeting is focused on discussing what's keeping plan sponsors up at night—specialty drug trend.

PBMI has gathered speakers representing different perspectives on the specialty drug industry including senior leaders from the largest PBMs, national employers, specialty drug manufacturers, and specialty pharmacies.

Take advantage of lowest rates before they expire. Early bird rates end 8/1!

For more information about the Forum and sponsorship opportunities, please contact Linda DeChant at ldechant@pbmi.com.

PBMI looks forward to seeing you!

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

Thursday, July 20, 2017

2016’s Top Retail Pharmacy Chains, According to Drug Store News

Drug Store News (DSN) has just released its latest rundown of the top pharmacy retailers in the mightily-titled PoweRx 50. (Links below.)

I recommend the PoweRx list to anyone who competes with, sells to, or otherwise interacts with retail pharmacy chains. This useful resource also provides brief profiles of most organizations.

Below, I show DSN's top 25 retailers. This year, CVS Health tops the DSN list, with $60.8 billion in retail prescription sales. Colorado-based chain Pharmaca Integrative Pharmacy is no. 50, with $73 million in prescription sales—0.1% of CVS Health’s retail revenues.

Note that the DSN list is not a complete look at the U.S. pharmacy industry. It excludes many large mail and specialty pharmacies. It also inconsistently (and IMHO, inaccurately) aggregates independently-owned pharmacies by wholesaler and buying group. I highlight how the list differs from our broader but shorter list shown in The Top 15 U.S. Pharmacies of 2016.

Tuesday, July 18, 2017

Understanding CMS’s Surprising Reimbursement Cut for 340B Hospitals

Last Thursday, the Centers for Medicare & Medicaid Services (CMS) shocked everyone with a proposal altering a small part of the 340B Drug Pricing Program. CMS proposed reducing reimbursement for certain Medicare Part B drugs purchased by 340B-eligible hospitals: from Average Sales Price (ASP) plus 6% to ASP minus 22.5%. Hospitals will also have to identify 340B claims with a new modifier.

Below, I highlight the most important 13 pages of CMS’s 664-page proposal. I also offer some observations and commentary on the proposal.

For context, I also include the new background memo for today’s House Energy and Commerce Committee hearing: Examining HRSA’s Oversight of the 340B Drug Pricing Program. The memo highlights the many negative findings from government watchdog agencies.

Like it or not, change may finally be coming to the out-of-control 340B program. Let’s hope Congress can get the program refocused on genuine safety-net providers and financially needy patients.

Monday, July 17, 2017

CBI’s Life Sciences Outcomes-Based Contracting Summit

CBI’s Life Sciences Outcomes-Based Contracting Summit
October 3-4, 2017 | Philadelphia, PA

Exclusive Offer for Drug Channels Readers:
Register Now to SAVE $400* using promo code DCR400
Hurry! This Offer Expires August 14, 2017.

CBI’s 2nd Annual Life Sciences Outcomes-Based Contracting Summit provides critical strategies into the process of outlining, structuring and negotiating risk-sharing agreements between bio/pharma manufacturers and payers.

This timely event will address the continuous challenges the industry faces to lower drug costs and increase patient access, all while demonstrating the value of their drugs to insurers by providing best practices and key insights from thought-leaders regarding the nuances surrounding outcomes-based contracting.

Join us for Solutions-Oriented Sessions, Powerful Payer Insights and Illuminating Case Studies:
  • Gain an understanding of the risk-sharing challenges from the payers perspective, featuring Michael Sherman, MD, Sr. Vice President and Chief Medical Officer of Harvard Pilgrim Health Care
  • Bridge the gap between real-world evidence and health economics outcomes research
  • Manage legal, compliance and regulatory concerns surrounding value-based contracts
  • Examine the benefits and challenges of outcomes-based contracts for target population (orphan/rare disease) therapies
  • Translate successful European managed entry agreements into actionable opportunities for the U.S. marketplace
  • Discuss the challenges and rewards of co-developing drugs and diagnostics for enhanced outcomes
  • And more!
Be the first to view the complete agenda, then register today using promo code DCR400 for this limited time savings of $400* off.

*Discount offer valid through 8/14/17; applies to standard rates only and may not be combined with other offers, category rates, promotions or applied to existing registration. Offer not valid on workshops only or academic/non-profit registration.

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

Thursday, July 13, 2017

10 Hospitals With 340B Contract Pharmacy Mega-Networks

For a follow-up to The Booming 340B Contract Pharmacy Profits of Walgreens, CVS, Rite Aid, and Walmart, let’s examine covered entities’ contract pharmacy networks in the 340B Drug Pricing Program.

Many covered entities have relatively small 340B contract pharmacy networks. However, some have built large networks seemingly designed not to help needy and uninsured patients, but to enrich hospitals and pharmacies.

The top 10 hospitals, listed below, have built mega-networks averaging 277 pharmacies. The largest retail chains and pharmacy benefit managers (PBMs) are active participants in these networks. That’s right: PBMs have joined the 340B party!

Yesterday, the House Energy and Commerce Committee announced a July 18 hearing: Examining HRSA’s Oversight of the 340B Drug Pricing Program. Also below, I pose four questions that committee members should consider about 340B contract pharmacy mega-networks.

Tuesday, July 11, 2017

The Booming 340B Contract Pharmacy Profits of Walgreens, CVS, Rite Aid, and Walmart

Pharmacies continue to ride the 340B Drug Pricing Program’s explosive growth.

Our latest exclusive analysis finds that nearly 20,000 pharmacy locations now act as a contract pharmacy for the hospitals and other healthcare providers that participate in the 340B Program. Fewer than 3,000 pharmacy locations were in the program in 2010.

Large retail pharmacy chains' rapid expansion (per the fourth chart below) into 340B suggests superior profits.
  • Six large chains account for two out of three 340B contract pharmacy locations in 2017. 
  • Walgreens remains the dominant participant, with nearly 6,400 locations in the 340B program. 
  • Over the past four years, CVS, Walmart, and Rite Aid have also deepened their engagement. These three chains collectively now have 5,400 340B contract pharmacy locations. 
Every year, I question the economics behind this astounding growth. How many prescriptions do contract pharmacies provide at discounted prices to uninsured, underinsured, and low-income patients? Are pharmacies engaged in profit-sharing agreements with 340B hospitals? Are they earning fees that far exceed fair market value standards? Who is really benefiting from the contract pharmacy boom?

Monday, July 10, 2017

Medicaid Drug Rebate Program Summit 2017

Medicaid Drug Rebate Program Summit 2017
September 11-13, 2017
Marriott Magnificent Mile | Chicago

Medicaid Drug Rebate Program Summit 2017 is a platform to:
  • Network with 600+ government officials, industry leaders, and pharma executives
  • Gain insights on the upcoming 340B Drug Ceiling Price and Civil Monetary Penalties Final Rules
  • Address the potential implications of “repeal and replace” on Medicaid
  • Hear lessons learned following the implementation of the AMP Final Rule
Use discount code XP2258DRUG for $200 off the current rate.

Earn CPE and CLE Credits!

A Universal Continuing Legal Credits (CLE) Certificate of Attendance will be applied for the State of Illinois. Continuing Professional Credits (CPE) will be provided in accordance with the National Association of State Boards of Accountancy (NASBA). State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. All credits will be provided following the conclusion of the conference.

Get guidance from key federal officials to ensure compliance on government program mandates
  • Medicaid Reform in the Trump Era – Scott W. Atlas, MD, David and Joan Traitel Senior Fellow of the Hoover Institution, Stanford University; Member, Hoover Institution’s Working Group on Health Care Policy
  • MDRP: Once a Good Idea, Now Not “Good Enough” – Jeff Myers, President and Chief Executive Officer, Medicaid Health Plans of America
  • Part I: General Overview of the Medicaid Drug Rebate Program: History, Core Elements, and Manufacturer Requirements and Part II: Understand How to Calculate Critical Price Types Such as AMP, URA, Best Price, Base Line AMP – Miree Lee, Principal at M. Lee Consulting LLC
  • Authorized Generics Price Calculations – John Gould, Partner at Arnold & Porter Kaye Scholer LLP
  • Fireside Chat: External Counsel – Moderated by John Shakow, Partner at King & Spaulding, with KPMG, Arnold & Porter Kaye Scholer LLP, Sidley Austin, and Hogan Lovells
Download the Brochure Here for Full Agenda and Speaker Details

Get a Front Row Seat Today and Participate LIVE at the Event!
Register Now to SAVE $200 off the Current Rate. Use discount code XP2258DRUG.

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