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 20,000 subscribers. Learn more...

Tuesday, January 16, 2018

The Life Sciences Patient Congress

The Life Sciences Patient Congress
March 19-21, 2018 | Philadelphia, PA
www.worldcongress.com/events/patientcongress

The Patient Congress features 4 co-located Summits aiming to convene a forum to aid pharma with breaking down internal silos to incorporate the patient voice across the entire product lifecycle in order to drive collaborative, innovative solutions from essential stakeholder partnerships, and enhance health outcomes.

Join together with 250+ industry leaders from life science, pharmacy, health plans, provider organizations, patient leaders, and policy makers to share innovative ideas and strategies, drive innovation, and create a community of stakeholders to provide value-based care to patients.

(Use discount code DC200 and save $200.)

Tracks include:
  • 6th Annual Patient Adherence & Engagement Summit
  • 6th Annual Patient Advocacy Summit
  • Patient Journey Mapping for Speed to Therapy Summit
  • Patient-Centered Clinical Trials Summit
How will you benefit?
  • 4 co-located events for the price of 1, allowing each attendee to create their own personalized conference experience that caters to their individual needs and allows enhanced networking
  • An exemplary speaking faculty including 80+ speakers from FDA, Pfizer, AstraZeneca, Novartis, Sanofi, Genetech, Merck, Astellas, BMS, GSK, and more!
  • Be a part of the first ever Patient Choice Awards, an awards ceremony recognizing Pharma and Patient collaborations: The only awards gala led by a judging panel of Patient Leaders
  • Real-time insight from patients with a Patient Reaction Panel to provide the patient perspective throughout the conference
  • Break down internal silos, network, and form alliances with game changers and thought leaders across all stakeholder groups within the healthcare ecosystem at the only event looking at how to incorporate the patient voice throughout the entire product lifecycle, from the research and development phase all the way through commercialization and post-commercialization.
(Use discount code DC200 and save $200.)

Visit www.worldcongress.com/events/patientcongress for more information.


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

Thursday, January 11, 2018

2026 Pharmacist Job Outlook Looks Good, Especially for Hospital Pharmacists

Hey there, pharmacists! Ready for some good news?

According to our exclusive analysis of the U.S. Bureau of Labor Statistics’ (BLS) new Occupational Outlook Handbook, the total pharmacist employment figure is projected to grow by almost 18,000 jobs by 2026.

The pharmacist outlook, however, varies by industry. Pharmacist jobs at hospitals, physician offices, and other non-retail settings will outpace growth at conventional retail and mail outpatient pharmacies.

Read on for an industry-by-industry look at the outlook. And if you are a retail or mail pharmacist: Plan accordingly! Drug Channels humbly suggests some alternative career ideas below.

Tuesday, January 09, 2018

New Data: Pharmacy Owners' Profits Fall As Industry Competition Rises

Time for my annual look at independent pharmacy owners’ business economics, drawn from the recently released 2017 National Community Pharmacists Association (NCPA) Digest, Sponsored by Cardinal Health. Here's the press release: NCPA Releases 2017 Digest.

Below, I review our latest estimates on pharmacy economics and margins. Our analysis reveals that independent pharmacy owners are now performing poorly. In 2016, we estimate that the average pharmacy owner saw their salary decline by more than 20%, to about $156,000. The number of independent pharmacies and gross margins also are trending downwards.

It’s the third consecutive year in which owner’s compensation declined. Read on for my look at pharmacy profits, comments on the industry’s competitive dynamics, and advice to pharmacy owners.

When times were good, pharmacy owners and their lobbyists complained bitterly about low pharmacy profits. Now that the endgame is truly beginning and reality matches the rhetoric, don’t be surprised that policymakers and others are skeptical.

Monday, January 08, 2018

sPCMA Business Forum 2018

sPCMA Business Forum 2018
March 5 & 6, 2018
Hilton Bonnet Creek | Orlando, FL

The sPCMA Business Forum covers critical industry issues and offers invaluable networking and education for individuals and companies involved in specialty drug benefit management, including PBMs and specialty pharmacies, pharma/biotech manufacturers, industry consultants, and others.

Conference sessions will cover critical issues, such as the value and net price of prescription drugs, how payers use drug pipeline data to make decisions, the value and use of digital therapeutics in patient care, the latest implications of the 21st Century Cures Act and FDAMA 114, considerations for rare and ultra-rare product development and commercialization, and much more.

Confirmed speakers include:
  • Amy Bricker, President, Supply Chain, Express Scripts
  • Laurent Carter, Vice President, Strategic Payer Marketing, U.S. Value, Access, and Payment, Bristol-Myers Squibb
  • Scott Honken, Senior Vice President, Payer Sales and Strategy, Voluntis
  • Steve Johnson, Assistant Vice President, Health Outcomes, Prime Therapeutics
  • Doug Long, Vice President, Industry Relations, IQVIA
  • Alan Lotvin, Executive Vice President, Specialty Pharmacy, CVS Health
  • Rae McMahan, Vice President & General Manager, Specialty Pharmacy, Prime Therapeutics
  • Mark Merritt, President & Chief Executive Officer, PCMA
  • Jon Roberts, Executive Vice President & Chief Operating Officer, CVS Health
  • Will Shrank, Chief Medical Officer, UPMC
  • Brian Solow, Chief Medical Officer, Optum Life Sciences
  • Caroline York, Senior Vice President, Operations, WellDoc
  • Additional speakers from Express Scripts, Magellan Rx Management, OptumRx, and others TBA

March 5 & 6, 2018
Hilton Bonnet Creek | Orlando, FL

Contact PCMA
Please contact Jenny Bradham (jbradham@pcmanet.org) with questions or to request information about the Affiliate Program or conference sponsorships.


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

Wednesday, January 03, 2018

Copay Accumulators: Costly Consequences of a New Cost-Shifting Pharmacy Benefit

Let’s kick off 2018 with a Last Jedi-themed look at copay accumulator programs—a benefit design option that I expect to become highly controversial this year.

Accumulator programs target specialty drugs for which a manufacturer provides copayment assistance. Unlike conventional benefit designs, the manufacturer’s payments no longer count toward a patient’s deductible or out-of-pocket maximum.

As you will see below, plan sponsors—employers and health plans—will save big money because accumulators shift a majority of drug costs to patients and manufacturers. Accumulator programs will further lower a plan’s drug spending by discouraging the appropriate utilization of specialty therapies and reducing adherence. What’s worse, many patients won’t understand their new “benefit.”

Given the direct human healthcare impact of copay accumulator programs, I don’t see how they can be considered value-based designs. Is it any wonder that people think their employers and insurance companies are from the dark side?

Friday, December 22, 2017

Remicade: A Case Study in How U.S. Pricing and Reimbursement Curb Adoption of Biosimilars (rerun)

This week, I’m rerunning some popular posts during the pre-holiday week. Click here to see the original post and comments from September 2017.

This post is good reminder that biosimilar products have unanticipated channel dynamics. CMS’s policy change will further alter the 2018 market. Effective January 1, 2018, each biosimilar will have its own J-code. See Final Policy, Payment, and Quality Provisions in the Medicare Physician Fee Schedule for Calendar Year 2018.


Drug Channels will return on January 3. Until then, have a great holiday and happy new year!


The Centers for Medicare & Medicaid Services (CMS) has just released the Average Sales Prices (ASP) reimbursement data for the fourth quarter of 2017. You can download the drug pricing files here.

Below, I use these data to explore the reimbursement and payer dynamics behind the relatively slow adoption of Inflectra, the first biosimilar of Remicade. The introduction of Renflexis, a second biosimilar, will offer additional insights about pricing and channel strategies.

The U.S. biosimilar market is highly underdeveloped compared with our European counterparts. As this case study shows, it’s pretty, pretty, pretty hard to launch a biosimilar.

Thursday, December 21, 2017

Why Manufacturers and PBMs Should Worry About the Growth of Hospital-Owned Specialty Pharmacies (rerun)

This week, I’m rerunning some popular posts during the pre-holiday week. Click here to see the original post and comments from September 2017.

Another $0.02: In 2018, providers will continue to create the next wave of specialty pharmacies. But growth may slow with the likely legislative and/or regulatory reform of the 340B Drug Pricing Program. Expect a volatile 2018 for the specialty pharmacy industry.



The American Society of Hospital Pharmacists (ASHP) has just released its latest national survey of pharmacy practice in hospital settings. (Free download) I always enjoy this annual treasure trove of insights.

This year’s survey confirms the extent to which hospitals and health systems are pursuing specialty pharmacy dispensing revenues. In 2016, about 1 in 11 hospitals had a specialty pharmacy. However, nearly half of the largest hospitals operated a specialty pharmacy.

Below, I summarize these new data and review hospitals’ motivations for growth. Pharmaceutical manufacturers and pharmacy benefit managers (PBMs) should be wary of the expansion in hospital-owned specialty pharmacies.

Wednesday, December 20, 2017

Follow the Dollar Math: How Much Do Pharmacies, Wholesalers, and PBMs Make From a Prescription? (rerun)

This week, I’m rerunning some popular posts during the pre-holiday week. Click here to see the original post and comments from August 2017. We’ll have an updated and expanded version of this analysis in the 2018 Economic Report on U.S. Pharmacies and Pharmacy Benefit Managers, which will be released on February 27, 2018.

ICYMI: The Pharmaceutical Research and Manufacturers of America (PhRMA) just released its own Follow The Dollar white paper, which is also worth reading.



Yesterday, The Wall Street Journal published an intriguing article by Jonathan Rockoff titled Behind the Push to Keep Higher-Priced EpiPen in Consumers’ Hands.

The article includes a graphic attributed to me (cited as Pembroke Consulting). It shows that the drug channel—pharmacy benefit managers (PBMs), wholesalers, and pharmacies—receive more than $37 in gross profit for a brand-name drug with a $300 list price. PBMs capture about half of this amount.

The WSJ article doesn’t describe how I arrived at the figures. But now you, Drug Channels reader, will get the inside scoop.

Below, I go inside the box and trace these crucial computations. They determine the revenues and profits of the drug channel participants that operate between a brand-name drug maker and the patient. I also reveal how the figures affect the net prescription cost for a third-party payer.

As with many things, you'll have to observe the system to figure out the superposition.

Tuesday, December 19, 2017

Drug Channels Outlook: What to Watch in 2018

Hooray! We all made it through another 12 months. This year was stuffed with mega deals, political turmoil, the drug pricing blame game, generic market disruption, an ever-inflating gross-to-net bubble, and Amazon mania.

Through it all, Drug Channels was there to help you figure it out. I’m pleased to report that we had another record year. Drug Channels now has more than 20,000 subscribers, including nearly 5,000 @DrugChannels Twitter followers. (Follow me there for daily updates.)

Thank you, dear readers, for welcoming me into your inboxes and browsers each week. I’ve had a blast writing Drug Channels and also hope you had fun reading it. I’m grateful to our many sponsors and guest writers. Special thanks to the brave souls who posted comments and joined in the spirited discussions below the articles.

Here’s a bonus stocking stuffer: the Drug Channels Outlook: Things to Watch in 2018. These slides capture ideas I shared in my recent keynote presentation at CBI's Trade and Channel Strategies conference. It’s a sneak peek at some of next year's likely hot topics. I have also tucked in a few of my favorite personal photos from the past year.

We’ll post reruns for the balance of this week. But never fear: Drug Channels will return with new content in 2018! In the meantime, please enjoy our annual holiday tradition—a video greeting below from me and Paula, my wife and business partner in Drug Channels Institute.

Wishing you and your family health and happiness,
Adam