The Drug Channels blog 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. Learn more...

Wednesday, March 28, 2012

7 Reasons Why Specialty Drug Dispensing Will Boom

In advance of next week’s Specialty Pharmacy Business Forum, let’s take a look at the future of the specialty pharmacy market.

Below are seven key reasons behind the coming boom in specialty drug dispensing. As I see it, the projected growth in specialty drug dispensing is encouraging market entry, drawing investment capital into the pharmacy industry, and increasing competition for specialty pharmacy services. Dispensing of specialty pharmaceuticals will become less concentrated as regional chains and independents penetrate this market. Manufacturers will face enormous pressure to broaden limited distribution networks.

Next week, I’ll be at the Specialty Pharmacy Business Forum in Las Vegas. Send me an email if you’d like to meet one-on-one to talk about specialty pharmacy’s future, or chat about my work helping pharmaceutical manufacturers with commercial and channel strategies for specialty drugs. I'd also be pleased to play a few hands of blackjack with you!

Thursday, March 22, 2012

Fake Pharmacies and Drug Shortages

Last October, Congress began investigating where secondary wholesalers got access to products in short supply. See Congress Asks Where Gray Market Drugs Come From.

Yesterday, we learned one possible explanation—at least three small wholesalers set up fake pharmacies to purchase drugs, and then resold the heavily marked-up drugs as a gray market vendor. Yikes!

While we don’t have all the facts, I wonder: were the state boards of pharmacy asleep at the wheel? Read on for more on this latest diversion scandal by shady secondary wholesalers.

Wednesday, March 21, 2012

Drug Channels News Roundup: March 2012

Yesterday was the first day of spring! I can think of no better way to celebrate than with my latest monthly look at noteworthy news stories from the Drug Channels multiverse.

In this issue:
  • A Walgreen-Rite Aid Merger? Really?!?
  • A New Startup Aims for Prescription Price Transparency
  • Hospitals Get Into the Specialty Pharmacy Game
Plus, The Onion delves into the FDA’s decision to allow importation of Doxil and methotrexate.

Monday, March 19, 2012

14th Annual Medicaid Rebates Conference (sponsor)

I am pleased to welcome CBI's 14th Annual Medicaid Rebates Conference as a Drug Channels sponsor. The conference will be held at Disney’s Contemporary Resort in Lake Buena Vista, FL on May 16-18, 2012. Great location!

This event promises to be another valuable opportunity to catch up on big issues, including Average Manufacturer Price (AMP), Bona Fide Service Fees, Managed Medicaid, and more. Read more in the official description below or visit the event website.

CBI is offering a special $400 discount to Drug Channels readers. Just register with Promo code QFR332. Thanks, CBI!

Friday, March 16, 2012

Customer Evolution Requires Pharm Revolution (Guest Post)

Today’s guest post is from Theo Fellgett, Media VP for SFE & Commercial Excellence at EyeForPharma, a Drug Channels sponsor. Theo provides an interesting viewpoint on customer evolution and the future of pharma by discussing sales models with executives from such companies as Novartis, Cubist, and IMAR Life Sciences.

The 2012 Sales Force Effectiveness & Commercial Excellence conference will be held June 12-14, 2012, at the Renaissance Woodbridge Hotel in Iselin, NJ. Click here for registration and Early Bird Specials.

Please contact Theo Fellgett (theo@eyeforpharma.com or 800-814-3459 Ext. 7591) with any questions about the article or the event.

Thursday, March 15, 2012

Pfizer's Lipitor Strategy and the 2012 Generic Monster

After more than three months, Lipitor share is now tracking above historical generic substitution patterns, i.e., the brand-name version is losing share more slowly than a typical generic drug. The pretty picture below tells the tale.

As expected, 2012 will be the monster year for generic launches. Twenty-five drugs, with total revenues of $35.6 billion, face a loss of exclusivity in 2012. (See the list below.) Trust me—many manufacturers are studying Lipitor’s strategy.

The generic boom-and-bust will reshape the entire drug channel system—and how manufacturers must interact with pharmacies, wholesalers, and PBMs. Happy Ides of March!

Tuesday, March 13, 2012

Rite Aid: Smart or Lucky?

Well, hit me on the head and call me shorty! Good ol’ Rite Aid (NYSE: RAD) is showing signs of life.

Same store pharmacy sales are growing, the company is getting a bit trimmer, debt is (slowly) being paid off, and the stock price has doubled since October.

They have a long way to go to achieve actual business health, but I see a low risk of outright bankruptcy. Rite-Aid’s $6+ billion debt load remains a big deterrent to any potential acquirer … unless Walgreen (NYSE: WAG) gets very, very desperate.

Read on for my take on their reanimation. What do you think: Are they lucky or smart?

Thursday, March 08, 2012

AARP Distorts Drug Price Data (Again)

For years, the AARP has been releasing periodic drug price reports, authored by Stephen Schondelmeyer of the University of Minnesota and Leigh Purvis of AARP. The latest study claims that “retail prices for a combined set of widely used prescription drugs finds the cumulative change in prices from 2005 through 2009 was almost double the rate of inflation.” See the AARP press release.

While the new study makes some mild concessions to prior methodological critiques, Dr. Schondelmeyer and Ms. Purvis again draw a completely specious comparison between drug prices and overall inflation. This unscrupulous misrepresentation is discouraging, especially when the media dutifully covers the "news." To be fair, even the New York Times has been shamed into presenting both sides of the story.

Read on for the depressing details and let me know if you agree.

Tuesday, March 06, 2012

Payers Know Little About Specialty Drug Spending

If you're interested in the specialty market, then you should download the 2012 Specialty Drug Benefit Report, a new report from the Pharmacy Benefit Management Institute (PBMI). (The report is free with registration.)

The report adds new insights into specialty drug management. Most noteworthy: Payers apparently know surprisingly little about their own specialty spending:
  • 2 out of 3 employers and health plans lack visibility to specialty spend covered by a medical benefit.
  • Almost 9 out of 10 don't know the medical benefit specialty drug trend for their own beneficiaries.
These survey data help explain why specialty pharmacy providers are increasing their role in managing and distributing specialty pharmaceuticals covered under a patient’s medical benefit. Payers’ ignorance is seen as a big business opportunity by Pharmacy Benefit Managers (PBMs), but could be a big risk for specialty distributors.

Thursday, March 01, 2012

DEA Beats Back Cardinal’s Challenge

They fought the law, but the law won.

Yesterday, a judge dissolved the temporary restraining order against the DEA, thereby permitting the agency to suspend Cardinal Health’s license to distribute controlled substances from its Lakeland distribution center. See Judge allows DEA to suspend Cardinal license. (Note that Cardinal can still distribute other drugs from Lakeland.)

While I lack access to behind-the-scenes facts, I still contend that the DEA is off base here. In the meantime, the shutdown could provide a slight benefit to AmerisourceBergen (NYSE:ABC) and McKesson (NYSE:MCK). However, Cardinal seems much better prepared vs. 2008, so market share losses should be minimal...unless the DEA decides to go medieval on their assets.

Read on for key background documents, including Cardinal's intriguing challenge to the DEA's basic logic. We are on a slippery slope, folks. Pay attention because you could be next.