Tuesday, July 31, 2007
1) E-Pedigree Goes Mainstream
The venerable Pharmaceutical Executive ventured into the supply chain with Pharma Ramps Up for E-Pedigree, an overview of the California e-pedigree situation. The article is generally accurate, although the ratio of actual pharma executives (3) to technology vendors (7) was a bit low. Surprisingly, there are no comments from the pharmacists who will supposedly install systems to read serialized RFID/bar-codes and willingly transmit the information for free to everyone else.
2) Fun with Forrester
My June news update led to an interesting debate with Forrester research analyst Carlton Doty regarding my negative review of his online drug buying study. Make up your own mind by reading our back-and-forth exchange in the comments section below the June post.
3) Why do they put nails in coffins?
Whistleblower Peter Rost allows an anonymous pharma sales rep to post a deeply cynical look at Average Sales Price (ASP) reimbursement for oncology drugs. Caveat lector!
4) UK Distribution Update
Sanofi-Aventis became the latest manufacturer to trim its UK distribution network. In related news, it looks like the Alliance Boots buyout has hits some snags, with banks holding back on the debt sale until the market improves (See Alliance Boots Debt Sale Postponed).
The new Health Wonk Review, a compendium of health policy blog postings, is worth reading. Plus, they picked up one of my Average Manufacturer Price (AMP) analyses.
6) Chicken Soup for a Pharmacist’s Soul?
You MUST read Welcome to the World of Retail Pharmacy, a poem about life in a community pharmacy. After all, how many poets would dare to rhyme words such as “Rx” or “pseudoephedrine”?
Friday, July 27, 2007
Sen. Vitter should read the news coming out of Canada before extending this unsafe plan. He should also recognize the pesky fact that imports from Canada are dropping rapidly thanks to Part D.
Unfortunately, I fear that Sen. Vitter wants to legalize drug diversion so that we'll forget about his own illegal diversions.
Thursday, July 26, 2007
According to Drug Store News, NACDS and NCPA expect “… a loss of local pharmacy services and access for low-income patients in many rural and inner-city areas as pharmacies either drop out of the Medicaid program or close their doors after operating at a loss.”
The late Senator Patrick Moniyhan once quipped: “Everyone is entitled to his own opinion, but not his own facts.” In that spirit, I submit three heretical questions.
1) Is this really Pharmacy’s Last Stand?
Medicaid is projected to spend $27.1 billion on outpatient prescription drugs in 2008, equal to 11% of total US spending of $247.6 billion. (See page 14 of the National Health Expenditure Projections, which were made without considering AMP.) CMS’ projects total Federal and State savings from AMP of $1.3 billion, which would reduce national spending by 0.5%. That's right -- half of one percent.
Keep in mind that Medicaid spending dropped by $14 billion (-36%) in 2006 when dual eligibles moved to Part D. I certainly recognize that generics are much more profitable for pharmacies, but might I humbly suggest that rhetoric about reckless disregard for patient welfare is a bit overheated?
2) Is access really at risk?
NCPA posted this graphic cartoon to illustrate the harmful effects of AMP. To check the accuracy of this cartoon, I reviewed a little-noticed study published by the PCMA last month called Consumer Access to Pharmacies In the United States, 2007.
The study found that consumers of independent pharmacies have access to many pharmacies within a reasonable driving distance. Three key findings:
- In urban areas – where 61% of independent pharmacies are located – consumers patronizing independents have access to 30 competing pharmacies within two miles of their current pharmacy.
- In suburban areas, independent pharmacy consumers have access to 7 competing pharmacies located within 5 miles of their current pharmacy.
- In rural areas, independent pharmacy consumers typically have access to 14 competing pharmacies located with 15 miles of their current pharmacy.
3) Do we have too many community pharmacies?
Seeing the numbers above, I wonder if the U.S. retail pharmacy industry simply has too much capacity.
One of my favorite productivity stats is the Average Weekly Prescriptions Per Pharmacy, shown for the major store-based retail pharmacy channels. As you can see, the typical independent fills far fewer scripts per week than CVS, Walgreen (WAG), and Wal-Mart (WMT).
For some further perspective, consider Caremark’s mail operations in 2006. They operated seven mail order facilities and dispensed 60 million (90-day) prescriptions. That translates into 500,000 30-day prescriptions per facility per week – roughly equivalent to a single independent pharmacy’s dispensing for 15 years!
Look, I’m a realist. There are hundreds of community pharmacies in every congressional district. This story may have a quite predictable and politically motivated ending regardless of the economic facts.
Prove it, you say? Well, Ohio just became the latest state to pass a budget with an increase in the dispensing fee. At least the total increase must be less than the total savings from the Medicaid FUL change. (You can view the bill's text online, but must search for “dispensing fee” to find the relevant sections.)
Hmmm, I guess this explains why economists rarely get elected to public office...
Wednesday, July 25, 2007
Health Canada vows to crack down on fake pills, as the unfortunate case of Marcia Ann Bergeron continues to raise awareness about counterfeit drugs.
What, no statement from my good friend Senator Byron Dorgan? As you may recall, he attached The Legalized Diversion and Support of Drug Counterfeiting Act of 2007 to the drug safety bill earlier this year. Luckily, his move was narrowly defeated two months ago.
Importation from Canada is diversion, plain and simple. Drug diversion is the primary way that counterfeit drugs get into legitimate pharmacies. Thus, importation will open up new gateways for counterfeits, even though it won’t even save much money.
I hope that our pro-importation politicians are paying attention.
Many so-called Canadian pharmacies are not actually in Canada and many drugs sold online are counterfeit. Yet people still buy drugs online from unscrupulous sellers. Where do you think Al Gore III got his Vicodin?
If young Al’s 100 mph Prius drag race isn’t scary enough, then read The Philadelphia Inquirer’s fascinating 8-part series about a father-son duo that imported bulk drugs from India and then fulfilled huge orders for online pharmacies. I summarized their scheme last November in Of Spammers and Senators, noting that we can never be sure where "Canadian" pharmacies are getting their supplies.
So I was especially disappointed to read that four people died after taking counterfeit Norvasc dispensed from a local Canadian pharmacy. According to the article cited above: “The pharmacist was acquitted this spring, though, after a judge concluded there was no evidence that he sold the drugs knowing they were counterfeit. The druggist said he had bought them from a traveling salesman.” Say what?!?
Do our politicians understand these risks? Doubtful, although at least Senator Dorgan can finally be true to himself when blocking Canadian imports now.
Sigh. Another day, another batch of counterfeits discovered. Chinese police seized more than a tonne of fake drugs for impotence, bird flu and malaria, including at least 18,000 fake Viagra tablets, according to this Reuters story.
Monday, July 23, 2007
Looks like the AMP Final Rule will keep this trend going. On Tuesday, Reps. Nancy Boyda (D-Kan.) and Jo Ann Emerson (R-Mo.) will introduce The Patient Access to Medicaid Generic Prescription Drugs Act of 2007. They will also participate in a conference call with the National Community Pharmacists Association (NCPA), which appears to be doing a good job of refocusing Average Manufacturer Price (AMP) into a debate over “access” versus the relative profits of generics.
Here are the details in case you want to tune in:
WHEN: Tuesday, July 24, 2007, at 2:00 p.m. EST
(UPDATE: Time changed to 11:00 PM per new press release.)
CALL-IN #: 800-944-8766 (Conference Code: 39108)
You can also read the full press release from NCPA. Drug Topics has a summary of the proposed legislation, which will focus on generic dispensing targets. I'll weigh in after I read the bill.
Friday, July 20, 2007
The #1 item cited in PSS' press release? “Costs associated with state pedigree laws, particularly within the state of Florida, for the sale and distribution of pharmaceutical products.”
The company is apparently saying that the unexpected expenses (I guess $2M, judging by restatement amount) come from the way that Florida is interpreting and enforcing the law. I’ve also heard that extra expenses include fines for non-compliance and inventory impairment.
I suspect this issue stems in part from HB371, a controversial amendment to Florida’s pedigree laws. At the time, PSS announced an intention to attain “authorized distributor” status and increase direct buying from manufacturers. (See H.B. 371 signed by Gov. Bush and this PSS press release.) Perhaps PSS and the State of Florida did not see eye-to-eye on PSS’ role as a one-step distributor of pharmaceuticals?
Their Q1 earnings call is next Thursday (7/26/07), so I presume we will learn more at that time.
The WSJ Health Blog has a good summary (Inventory Bugaboos Dog and Aid Drug Makers). Relevant excerpts:
- “On Tuesday, Pfizer blamed wholesalers’ inventory reductions for part of the 25% decline in U.S. sales of cholesterol-fighter Lipitor to $1.38 billion in the quarter…Ian Read, president of world-wide pharma operations at Pfizer, said Lipitor inventories fell to 1.8 weeks on hand at the end of the first quarter compared with almost a month, or 3.8 weeks on hand, at the end of the second quarter.”
- “But for Wyeth’s heartburn medicine Protonix, the wholesalers appeared be stocking up rather than winding down their supplies in the second quarter. Sales of Protonix, which competes with AstraZeneca’s Nexium, jumped 25% to $550 million in the quarter compared with the year-earlier period, the company said today.”
These new agreements require wholesalers to provide inventory and shipment data to manufacturers. Most manufacturers use software from either Edge Dynamics or Valuecentric to analyze these incoming wholesaler data.
But according to my sources, neither Wyeth nor Pfizer are customers of either software company.
Perhaps they have been relying on Professor Trelawney for channel data, instead?
P.S. Hope you enjoy an unspoiled Book 7 at 12:01 AM!
Wednesday, July 18, 2007
In case you didn't know, the big three drug wholesalers – AmerisourceBergen (ABC), Cardinal Health (CAH), and McKesson Corp (MCK) – have been major participants in this trend.
Thanks to the fee-for-service transition, wholesalers have been able to reduce inventory investments and generate unprecedented levels of cash flow from operations. Wholesalers have used their cash to repurchase shares ($8.4B since January 2004), repay debt, and fund acquisitions. As a result, all 3 wholesalers now have very strong balance sheets and respectable Earnings per Share (EPS) growth.
Here are the total value of share repurchases by the Big 3 from 2004:Q1 through 2007:Q1, courtesy of Larry Marsh at Lehman Brothers:
ABC = $2.0 billion
CAH = $4.4 billion
MCK = $2.0 billion
You can see their relative stock performance using this nifty Yahoo! stock chart. Since January 2004, McKesson’s stock has doubled and AmerisourceBergen is up 80%. Cardinal’s stock performance has lagged the other two wholesalers, but they have also bought back more stock than the other two combined. Perhaps this is a signal that the company considers its shares to be undervalued.
The WSJ article suggests a few reasons for buybacks.
- Buybacks are a tax-efficient way to return cash to shareholders. Dividends are taxable but there is no tax due on a share buyback unless investors sell their shares.
- Buybacks signal that the company doesn’t know how to grow.
- Buybacks can benefit corporate executives, especially if their compensation is tied to EPS and share-price targets. Buybacks also benefit executives with large holdings of stock options.
I see at least three major ways for wholesalers to grow their core distribution businesses, so I’ll let you judge the relative merits of the other two possible explanations.
Tuesday, July 17, 2007
Sound advice for serialization fans who are surfing some gnarly waves in advance of California’s 2009 e-pedigree deadline. Serialization by manufacturers will not magically make the supply chain secure, so rushing to meet an arbitrary and unrealistic serialization deadline within 17 months does not promote safety.
Monday’s Pink Sheet (subscriber link) reports that manufacturers are lobbying the Board of Pharmacy to execute a roundhouse cutback on the state’s item-level serialization requirements. From the article:
Pfizer recently told the California Board of Pharmacy that by its best estimate, it would take five to seven years to serialize all products at a cost of $95 million to $100 million. "That's just in one-time implementation costs and does not include the cost to the rest of the supply chain to be able to read the serial numbers and pass along the pedigree information," Peggy Staver, director of product integrity for Pfizer, told "The Pink Sheet."
According to IMS, there were 290 million Pfizer prescriptions last year. If Pfizer spends $20 million per year for 5 years on one time implementation, they will only pay a trifling 7 cents per prescription. So what’s the problem?
Frankly speaking, everyone else in the pharmacy supply chain. A truly closed-loop, interoperable track-and-trace security solution based on serialization will require a massive infrastructure upgrade at the 150,000+ points of pharmacy dispensing in the U.S. John Theriault, Pfizer's vice president of global security, made a similar point when talking about RFID last month. (See Pfizer questions RFID.)
Greg Cathcart from SupplyScape told me that their larger customers are using a “risked based approach to serialization” (RBATS - my term) but aiming for full pedigree compliance by the Jan '09 deadline. In other words, serialize high risk products and rely on pedigree for the rest.
RBATS also makes a lot of sense to me even if the California deadline slips. It’s also one more reason why e-pedigree (not RFID) will not wipe out as an enhancement to supply chain security even if practical serialization takes longer and costs more than many people expect.
Friday, July 13, 2007
After some boardroom machinations this week, Stefan Pessina is now firmly in charge of Alliance-Boots. See Baker goes as Pessina takes charge after coup at Boots (Times London) or Alliance Boots CEO Resigns (Wall Street Journal).
As you may recall, A-B was formed when Alliance Unichem, Europe's biggest drug wholesaler, merged with Boots, the UK's largest pharmacy retailer. Alliance-Boots was taken private in a leveraged buyout financed by Kohlberg Kravis Roberts and led by ... Stefan Pessina, who was also the driving force behind Alliance-Unichem.
Once the dust settles, what's next?
I predict that the drive for consolidation within the pharmacy supply chain plus private equity's need for mega-deals will lead Alliance-Boots to create a global pharmacy wholesaler and/or retailer within the next three years. Thus, I would not be surprised if:
1. Boots opens in the US -- Boots launched in North America in 2004 and currently sells its products in Target, CVS, and Shoppers Drug Mart stores. While there are no standalone Boots stores here, the brand is starting to become known by consumers. I wonder if CVS will one day regret its decision to let Boots get their, um, foot in the door here. (Doh!)
2. Alliance-Boots acquires a US Wholesaler -- As I pointed out in April, Pessina has wanted to create a global pharmaceutical wholesaler for some time, so this is also a credible scenario. The big 3 have strong cash flow and minimal debt, making them catnip for private equity firms. But valuations remain relatively high, so it's hard to put a deal together. A change in sentiment could make the numbers work, especially given the not-so-obvious but still substantial restructuring opportunities in the US wholesaling industry.
Keep in mind that this is all pure speculation. And please don't complain if I'm wrong -- free advice is worth what you pay for it.
Thursday, July 12, 2007
NCPA continues their tradition of over-the-top hyperbole with this reaction: Final CMS Medicaid Reimbursement Rule Shows Reckless Disregard for Patient Welfare by Threatening Viability of Independent Community Pharmacies, Says NCPA. In case you miss their point or don’t want to read their verbose release, they have posted this summary cartoon. The tear on Mom's face is a nice touch.
The Association of Community Pharmacists Congressional Network, a relatively new organization, shares similar fears in CMS Assaults Neighborhood Pharmacies With New Rule Cutting Reimbursements For Generic Medicaid Drugs. Their first sentence tells you everything you need to hear about their POV: “Patient access to their neighborhood pharmacist is under assault, as the country’s healthcare delivery system teeters on the edge of destruction.” Yikes!
Meanwhile, their chain cousins at NACDS weigh in by pledging an “All-Branches, All-Level Government Strategy” to Fix Medicaid Reimbursement Model. Their response indicates a much greater emphasis on the technocratic aspects of AMP calculations instead of outright opposition to the concept of a cost-plus pharmacy reimbursement. Personally, I thought CMS’ extensive Q&A in its 587-page final rule document showed very limited room for flexibility. I suspect NCPA’s hyperventilating approach will be more persuasive to Congress.
PCMA, which represents pharmacy benefit managers (PBMs), showed some mild disapproval that mail pharmacy is now part of the retail class of trade in PCMA Statement on Average Manufacturer Price (AMP) Rule in Medicaid. As I pointed out on Monday, the direct impact on PBMs from this rule will be minimal.
What’s Really Going On
NCPA has done a good job of spinning AMP into a debate about “access.” However, the real controversy stems from the unusual economics of today’s pharmacy supply chain – dispensing generic drugs subsidizes brands. See The Attack on Generic Profits in Drug Channels for some background.
IMHO, CMS is forcing dispensers to restructure their business models to eliminate hidden cross-subsidies, which is exactly what has happened to physicians as a result of Medicare Part B Average Sales Price (ASP) model. Will AMP lower total spending or simply shift costs to commercial payers? Is it truly Armageddon for independents?
I’ll continue to check in on these issues, especially as Monday’s post led to record traffic on Drug Channels this week. FYI, our web traffic is doubling every 3-4 months.
Meanwhile, I plan to take a break from AMP coverage to catch up on some other news. I receive many nice emails about this blog. As always, I appreciate the kind words and welcome your comments and emails.
Sunday, July 08, 2007
Quick Summary: CMS' treatment of mail order will lower AMP, leading to disruptions in the retail pharmacy marketplace. AMP is also going to provide a very unique and new piece of information to the marketplace, although the direct impact on PBMs will be minimal in the short term.
CMS defines Average Manufacturer Price (AMP) quite literally in §447.504(a) as “the average price received by the manufacturer for the drugs in the United States from wholesalers for drugs distributed to the retail pharmacy class of trade.” Manufacturers must include all sales and associated discounts that reduce the amount received by the manufacturer (unless specially excluded). Note that a wholesaler is defined broadly to include any entity purchasing directly from the manufacturer.
AMP had historically only been used to compute brand manufacturer payments to the States under the Medicaid rebate program. But the Deficit Reduction Act (DRA) requires that AMP also be used to limit the reimbursement paid to retail pharmacies for multiple source (generic) drugs but not single-source branded drugs. This limit is called the Federal Upper Limit and will now be computed as 250% of AMP.
- Since there is only one AMP calculation, this dual role creates conflict between manufacturers and retailers.
- The Medicaid rebate program means that manufacturers want the lowest AMP possible.
Keep in mind that FULs apply to multiple source drugs – those with a therapeutic equivalent in the Orange Book. Thus, a pharmacy can not dispense a brand name drug with a generic equivalent in order to game the reimbursement system because the brand would be subject to the FUL.
States can top off AMP in whatever way they choose because CMS does not mandate a specific formula or methodology for determining the dispensing fee. The DRA also does not require States to base pharmacy reimbursement for Medicaid scripts on AMP. However, states can not modify the FULs, which was the point of my post from two weeks ago.
NOTABLE DECISIONS IN THE FINAL RULE
Mail order is retail.
CMS clearly states that mail order pharmacies serve the general public and should be included in retail class of trade. Mail order dispensed more than $50 billion of drugs last year, making it the second biggest dispensing channel behind chain pharmacies such as Walgreen (WAG), CVS (retail), and Rite-Aid (RAD).
Chain and independent pharmacy groups vehemently opposed including mail in the retail class of trade because mail’s lower cost of goods brings down the average. PhRMA supported the inclusion of mail, arguing for a function-based definition of dispensing to patients. (See page 57 of CMS-2238-P Paper Comments 125-134.
PBM price concessions are out, but…
Rebates, discounts, or other price concessions to PBMs are excluded from AMP in the final rule, except for purchases through PBM mail order pharmacies. I predicted this general outcome in May based on signals from Congress that CMS was not following “congressional intent.” Sales via a PBM’s retail network involve no physical possession or dispensing on the part of the PBM. These sales transactions get picked up in AMP because they flow through wholesalers to store-based pharmacies, so the exclusion seems logical and internally consistent to me.
... price concessions for PBM mail pharmacies are in.
On the other hand, CMS decided to include PBM discounts in AMP calculations where the PBM is operating a mail order pharmacy. As I understand the regulation, PBM rebates and discounts would lower AMP for the portion of sales dispensed through the mail. This seems like a logical consequence of including mail order in retail.
This decision will significantly reduce AMP because the three largest PBMs – Medco (MHS), Caremark (CVS), and Express Scripts (ESRX) – represent 70% of total mail order dollars. For example, Medco processed $26 billion through its retail network and dispensed an additional $16 billion by mail.
If I am interpreting the Final Rule correctly, then 38% [=$16/($16+$26)] of price concessions to Medco would be included in AMP. Frankly, I did not correctly anticipate how CMS would split the difference by excluding the portion of rebates and discounts from mail. (Please post a comment if I have misinterpreted this provision.)
A NEW BENCHMARK
I’ve summarized the market impact of AMP in two recent posts, both of which are still relevant now that I’ve read the Final Rule: Why AMP will not be Independents' day and An AMP Timeline Appears.
AMP is going to provide a very unique and new piece of information to the marketplace. Here are few ways that AMP will differ from other pricing benchmarks:
- AMP will be the first broadly available measure of the price a manufacturer receives for selling a product.
- AMP will have a publicly available, defined calculation methodology.
- AMP data will be made public on a website at the 11-digit NDC level and updated monthly.
That said, I do not see the transparency of AMP as an automatic negative for PBMs, as some are predicting. PBMs are hired by payers to manage pharmacy benefits and moderate the drug spend. New reimbursement models simply provide another basis for contracting and compensating the participants in the pharmacy supply chain.
I’ll post further comments after I bounce some ideas off my clients and other analysts. In the meantime, feel free to send me an email or post a comment. Thoughtful anonymous comments are always welcome!
Friday, July 06, 2007
AMP Regulation (Direct Link to PDF File)
AMP Press Release
AMP Fact Sheet
Dear State Medicaid Directors regarding AMP Regulation
Have a great weekend!
In the meantime, let’s go to the Drug Channels mail bag. Here’s a question from an independent pharmacist:
“Hello Dr. Fein: As an independent retail pharmacy owner I'm getting a little anxious about the AMP situation and your blog isn't relieving my anxiety at all. Why do you think the impact of AMP will be greater on indies than on chains? … I'm trying to take a long view, "creative destruction" and all that, but I really would like to continue to serve my community for a while longer. I just hate to think I could be sitting here in 2 years wishing I had bailed out in 2007. What do you see in your crystal ball?”
Thanks for the question! Sorry about causing you anxiety.
Here are five reasons why I expect independents to be more vulnerable than chains to the AMP switch:
- The average independent gets 25% of their revenue from Medicaid (per NCPA) vs. 10% for the typical chain. In part, this reflects the fact that chains now dominate the relatively richer suburbs.
- A multi-location chain can minimize their exposure to any changes in AMP by selectively closing stores or modifying store hours in high Medicaid areas. In contrast, most independents have been in their location for a long time and have a loyal customer base -- moving the store is not really an option.
- Independents get 95%+ of their revenue from pharmacy, but the mix for pharmacy chains is 65-70%. The convenience store aspect of CVS/ Walgreens makes them less vulnerable here, too.
- Large chains and PBM/mail order buy generics directly, but independents buy through wholesalers. Thus, the 250% markup has to cover two channel margins (wholesale+retail) for independents.
- Since AMP is a computed average, it will decline as the large customers get better buys. In a List minus system, the company that buys at a lower price makes higher gross profits. But in an average cost plus model, the company that buys better also hurts everyone else by bringing down the average. (The impact of this last point will depend on the final definition.)
I’ll update the blog whenever CMS gets back from the beach. Meanwhile, your friendly neighborhood pharmacy supply chain blogger will be waiting poolside since the Philly forecast calls for 95 degrees and high humidity.
Monday, July 02, 2007
This move vaults Walgreens ahead in specialty pharmacy. The major players today are PBMs that have acquired their own specialty pharmacy operations in the past few years: Medco, Express Scripts, and Caremark. All three major wholesalers – AmerisourceBergen (ABC), Cardinal Health (CAH), and McKesson (MCK) –also own specialty pharmacies, but these are relatively small.
The fact that this acquisition comes so soon after the CVS/Caremark deal is not a coincidence. I began 2007 by predicting more consolidation within the U.S. pharmacy supply chain – the network of companies that facilitate dispensing and payment of pharmaceuticals.
Specialty pharmaceuticals are the biggest driver of drug spending right now. There is a lot of money to be made managing the benefits for payors, but that’s only possible by also dispensing these drugs. Thus, Walgreens can continue to grow their small in-house PBM, which is not even ranked in the top 25 based on lives covered. I also think that today's acquisition reduces the likelihood that Walgreens will emulate CVS and acquire a PBM.
Specialty drugs tend to be single-source products with no generic equivalent. They treat complex diseases – such as rheumatoid arthritis, cancer or multiple sclerosis – and can cost more than $200,000 per year. Consider:
- Medco’s total spending on specialty drugs grew by 16.9% in 2006 and that spending on specialty drugs accounted for 25% of the total growth in drug spending. See Medco’s 2007 Drug Trend Report.
- Express Scripts’ per member per year (PMPY) spending on specialty drugs grew by 20.9% in 2006. See Express Scripts’ Drug Trend Report.
Plus, there is also evidence that health plans are having trouble getting their arms around specialty as the number of therapies increases. (See Some Health Plans Are Not Tracking PMPM Specialty Pharmacy Costs.)
Bottom line: this looks like a good strategic move for Walgreens.
"The state Board of Pharmacy is feeling pressure from pharmaceutical companies to delay a second time the deadline by which companies must implement an ill-defined electronic drug tracking system known as an “e-pedigree,” said the board’s executive director, Virginia Herold. This time, Herold said, the board could consider delaying the requirement — which the California Legislature passed in 2004 — to 2011.
Source: Pharmacy Board Under Pressure to Push Out Deadline for Electronic Drug Tracking (San Diego Business Journal)
I'm not surprised because the 2009 implementation date would require e-pedigree implementation RIGHT NOW in upstream manufacturing processes. Some manufacturers still seem to be getting their arms around pedigree requirements, which is why Supplyscape was such a big hit at the HDMA DMC meeting last month.
The minutes of the Board's June 20, 2007, meeting are not online yet, but they will be posted shortly on the Board of Pharmacy website.
P.S. Smile -- it's AMP Final Regulation day! (maybe...)