Friday, January 15, 2010

Drug Channels News Roundup: January 2010

Time once again for my semi-regular round up of intriguing and noteworthy news stories from the Drug Channels universe.

This edition features AmerisourceBergen’s expanded generic program, Walgreens latest battle with Washington state, good legal news for pharmacies, and advice for savvy prescription shoppers.


AmerisourceBergen Launches Expanded Generic Pharmaceuticals Program
Judging by this press release touting its PRxO generics source program, wholesaler AmerisourceBergen (NYSE:ABC) wants (needs?) to compete more aggressively against secondary generic suppliers. Two items that caught my eye include price matching when the primary generic is out-of-stock and 60-day price protection on new generic product introductions. More evidence of heightened competitive pressures in the generic drug distribution industry.

Continued Reduction in State Medicaid Reimbursement Forces Walgreens To Stop Filling Medicaid Prescriptions at 64 Washington Pharmacies as of Feb. 15
More fallout from the Average Wholesale Price (AWP) rollback as Walgreens (NYSE:WAG) again battles the Washington state Medicaid program. Déjà vu! Pharmacy Benefits Managers (PBMs) and other private payers adjusted reimbursements, but state Medicaid programs just grabbed the dough. See AWP Goes Boom for background. BTW, longest press release headline ever? Time for an editor, guys!

Nevada High Court Says Pharmacies Can't Be Sued for Death
Last October, I asked: Should pharmacies be liable for stupid patients? Apparently not in this case. The Nevada Supreme Court ruled that pharmacies can’t be held liable when a customer causes a fatal car accident.

6 Ways to Score Cheap(er) Drugs
The Motley Fool looks at the retail pharmacy price war from the consumer’s POV. They recommend (a) mass merchants instead of pharmacy chains, (b) generics instead of brands, and (c) mail-order instead of retail stores (for maintenance meds). The fools also suggest sticking with the PBM formulary whenever possible.


  1. Adam,
    Bergen launched their Generic Purchasing Progam (GPP) in the early 90's and two main features were out of stock and price protection. Other distributors followed suit. Remember they owned Pharmerica the second largest provider to LTC and they were participants in GPP. Nothing new here other than "spin".....must be a slow day on the investor relations front with the JP Morgan meeting this week.

  2. Yes, of course it's spin...but that doesn't negate increasing competition over generics among distributors (and not just the big 3).


  3. Have to disagree on mail order when I see Caremark paying its mail order facility $187 for a 90-day fill of generic Simvastatin. That's just crazy!

  4. Adam,

    Anonymous #1 is on target! It is all about the spin...and the impact on Wall Street.

    Generics are dropping due to ongoing pressure from the payor community, along with PBM's focus on increasing margin via spread. Mail order pricing on generics will have to drop as benefits folks become more educated.

    The spin piece is no different that what WAG did about 4 or 5 months ago in announcing they were pushing 90 day Rx's at retail. Nothing new, and often difficult to accomplish as most PBM's control the day supply that is actually allowed from the retail sector.

    Image and cosmetics rule many industries! Ask Estee Lauder.

    And lastly, how could have not discussed the generic "pay to delay" piece which has been such a hot topic recently? My feelings are that ultimately, this shmeering tactic will ultimately force more true competition from day 1, as opposed to day 180, within the generics industry.


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