Thursday, September 28, 2017

Drug Channels News Roundup, September 2017: A Walgreens-Rite Aid Deal Postmortem, Impax Likes Amazon, Health Insurance History, and Gross-to-Net Bubble Emojis

Autumn is here! Curl up with your favorite pumpkin spiced blog and savor these stories plucked from the Drug Channels patch:
  • Stefano Pessina of Walgreens Boots Alliance reflects on the successful Rite Aid deal
  • A generic drug maker speculates on using Amazon as a direct-to-patient channel
  • A great history lesson on why the U.S. has employer-sponsored insurance
Plus, the Pharmaceutical Research and Manufacturers of America (PhRMA) attacks pharmacy benefit managers (PBMs)…with emojis!

P.S. For my daily cornucopia of interesting news stories, follow @DrugChannels on Twitter.

Walgreens CEO Pessina on $4.38 Billion Rite Aid Deal, Bloomberg

Last week, Walgreens Boots Alliance (WBA) received regulatory approval to acquire 1,932 Rite Aid stores and three distribution centers.

Here’s a must-watch interview with Stefano Pessina, our global channels overlord and executive vice chairman and chief executive officer of WBA. He reflects on the Rite Aid deal, the antiregulatory environment, and Walgreens’ future expansion strategy in the U.S. Look for West coast expansion! Click here if you can’t see the video.



Impax Laboratories (IPXL) transcript, Morgan Stanley 15th Annual Global Healthcare Conference

As I describe in Generic Deflation Roils the Channel—And Will Get Worse, it’s not a good time to be a generic drug maker. It is, however, a good time to sprinkle some Amazon pixie dust hype onto your strategy. Here’s what Paul Bisaro, CEO of Impax Laboratories, said a couple of weeks ago:
”And by using an Amazon model or a direct-to-patient model, we can sell our product at probably the same margin or maybe even at slightly higher margin because we are now cutting our way around all the people who had to take a piece of the pie. And we can go directly to the consumer, end-market. It's not easy, I'm not suggesting it is easy. I'm not suggesting it is going to happen overnight but it just sort of makes sense that it's a natural evolution of the system.

Particularly, when you get into this weird situation where we are today, where some products that we manufacture and our industry manufacturers it would actually be cheaper for a patient to buy, pay cash for the product directly from the manufacturer than it would be to pay the co-pay that they're paying through their pharmacy benefit.”
Wishful thinking or a viable strategy? In sort of related news, Impax is rumored to be merging with generic drug maker Amneal.

The Real Reason the U.S. Has Employer-Sponsored Health Insurance , The New York Times

This brief article explains how a World War II era policy decision led to the dominance of employer-based private insurance in the U.S. It’s a nice summary for those unfamiliar with the history.

What's the deal with these prescription drug middlemen?, PhRMA

The Pharmaceutical Research and Manufacturers of America (PhRMA) has launched an intriguing campaign called Share the Savings. It questions whether patients’ out-of-pocket costs should be lower based on the rebates and discounts that pharmaceutical manufacturers provide to third-party payers. The 15-second video is a bit silly, but it does imply that consumers should want point-of-sale rebates. Click here if you can’t see the video.

For context, see Will CVS Health’s Point-of-Sale Rebates Deflate the Gross-to-Net Bubble—and Disrupt the PBM Business?



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