Friday, December 11, 2009

CVS Wins a Big One Despite Mudslinging

In the news today: CVS Chosen for $1 Billion Contract to Manage Pharmacy Benefits.

I'm sure the folks in Wooksocket are breathing a sigh of relief ("Whoa.") after November's unexpected contract losses, although this win doesn't "prove" the benefit of a combined PBM-pharmacy chain model. (See CVS Caremark: Pharmacy Gain, PBM Pain.)

Note that Caremark has provided PBM services to the Teacher Retirement System of Texas for at least 5 years.

Nevertheless, Texas pharmacist's ratcheted up the anti-CVS rheteoric in an all-out smear campaign against this contract renewal. Check out the tone of this Texas Pharmacy Business Council's Pharm Phlash, which claimed that the TRS Board of Trustees "will be rubber-stamping a major contract that could have serious negative consequences for retirees, taxpayers, and the independent community pharmacists who serve their retirees. Human sacrifice, dogs and cats living together... mass hysteria!"

OK, I added that last part from Dr. Venkman, but it's not much of an exaggeration..

Just my $0.02, but the pharmacist's mud-slinging seems driven more by their own personal business issues than a selfless devotion to taxpayers. I expect even shriller and more strident comments from pharmacy owners given the industry's likely evolution over the next few years.

9 comments:

  1. When did the actual track record of CVS Caremark become mud slinging. TPBC was not the only organization that testified yesterday Adam but your response and antagonistic position on issues involving retail pharmacy vs PhRMA and the PBM indistry has become very predictable.

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  2. "I expect even shriller and more strident comments from pharmacy owners given the industry's likely evolution over the next few years.", per Dr Fein on December 11, 2009.

    Evolution, Adam? I am afraid that a good number of us pharmacists will be living as if we're back in the Neanderthal era!

    With the RP shortage about over, and soon to be a glut of druggists within the next 24 months, expect salary levels to drop and dire working conditions to be the norm. Taco Bell anyone?

    Those pharmacists which do not differentiate themselves, either clinically...or otherwise, will be living by the fire eatin' the venison.

    Didn't this happen with primary care docs from about 1990 - 2000?

    Then the cycle may start again.

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  3. This a terrible contract rebates are redefined by Caremark in their contracts not to include, Fees, Compensation, DATA sales or Discounts from Manufactures. Specialty drugs do not rebate they discount, the same is true for generics. Compensation and Fee are buzzwords for rebate avoidance and Data sales are extremely profitable to CVS.This one of 22 serious issues I have seen in audits of CVS contracts. For the teachers to sign with CVS is not logical, but then they are teachers.
    JIm ApproRx

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  4. Adam,

    Your blog is supposed to be " nuetral " and report the facts- all of them in your analysis.
    Your own description of Insights. Sorry Adam- not true. Please recenter your blog and quit catering to your clients. Otherwise your advice and observations clearly lose objectivity. I guess the economy has got you too.

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  5. I disagree. There's no logical reason why a Texas pharmacy group should be mobilizing against a single contract renewal except for their own financial stake in the outcome.

    For the record, CVS Caremark is *not* a client, although that should be obvious given my previous critiques of their business strategy.

    Adam

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  6. JIm ApproRx,
    It's difficult to take your comments seriously when they are so heavily-laden with poor spelling and poor grammar. Maybe you should have paid more attention to your teachers instead of dismissing them as illogical.

    As for the comments about the post's lack of neutrality, most sources in situations like these are biased. The unbiased facts were reported by Bloomberg. I read this blog for the insights and theories that Adam provides beyond a simple re-telling of the unbiased facts.

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  7. Thanks for pointing out that Drug Channels is not a news site. I strive to be fact-based, but the tagline above let's you know that it's just one guy's viewpoint.

    Funny observation about Jim's comment!

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  8. Adam,

    Writing from another state East of Texas. As someone who purports to be an expert, I am really amazed that you have such a limited understanding of the problem. So let's say someone puts a consulting shingle out across the street from you. Tomorrow morning they walk in to your place of business and declare that they are there to audit your financial records going back 8 years. What would you do? Of course, you would tell them to get the _ _ _ _ out of your office. Yet, this is exactly what is occurring everyday in every part of the country CVS has stores. Under the guise of the "manager," CVS is able to audit the books of virtually any competitor in America. There is no meaningful firewall. Amazing that you don't get that - what planet are you on, or is it that you support anticompetitive business practices? I have never seen anyone give a more spirited defense of an industry that has 1/2 billion dollars in settlements and disliked equally by Repubs and Dems, etc... Just curious, do you work for PBMs or the big retailers?

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  9. "So let's say someone puts a consulting shingle out across the street from you. Tomorrow morning they walk in to your place of business and declare that they are there to audit your financial records going back 8 years. What would you do?"
    =================================================
    As one who attempts to view the big picture, I would first determine if that newby consultant across the street has been a source of your sales volume for the past 8 years....

    Maybe I'm missing something here.

    ReplyDelete

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