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...

Friday, March 24, 2017

Five Questions to Ask When Selling Your Pharmacy

Today’s guest post comes from Christian Herrington, Corporate Vice President Pharmacy Strategies for H.D. Smith.

Christian addresses five frequently asked questions for pharmacy owners who are considering selling their pharmacy. To help independent pharmacies both navigate and direct the sales process, H. D. Smith created VentureRx.

VentureRx fully supports the sale, purchase, start-up and transition strategies of pharmacies. Click here for a free, no-obligations needs assessment from VentureRx.

Read on for Christian’s insights.

Tuesday, March 21, 2017

Which PBM Best Managed Drug Spending in 2016: CVS Health, Express Scripts, MedImpact, or Prime?

Four of the largest pharmacy benefit managers (PBMs)—CVS Health, Express Scripts, MedImpact, and Prime Therapeutics—have raised their swords and released their 2016 drug trend reports. (Links below.) That means it’s time for some Drug Channels-style fun! Below, I review what the reports reveal about drug spending—and which questions remain unanswered.

Drug trend measures the year-over-year changes in a plan sponsor’s pharmacy benefit drug spending. As you will see, all four PBMs reported that their drug trend percentages for 2016 were in low single digits. The unweighted average among them was a mere 3.5%. About one-third of PBM clients experienced year-over-year declines in drug spending.

Put more simply: The U.S. doesn’t have a drug spending problem. It's fake news.

Specialty drugs have doubled as a share of plan sponsors’ benefit costs. Since these products account for only about 1% of claims, pharmacy benefit management is increasingly focused on handling these patients and their complex, hard-to-treat diseases. Unfortunately, payers seem set on discriminating against people who receive these therapies.

Keep in mind that the PBMs’ reports are primarily marketing documents, not peer-reviewed research studies. But as many PBM executives have said: What we do in life echoes in eternity!

Monday, March 20, 2017

CBI’s Real-Time Benefit Check and ePrior Authorization Summit

CBI’s Real-Time Benefit Check and ePrior Authorization Summit
May 23-24, 2017 | Philadelphia, PA
www.cbinet.com/benefit-check

CBI's Real-Time Benefit Check & ePrior Authorization Summit is headed back to the East Coast this May.

Mark your calendar and benefit from this highly focused conference that's on the pulse of groundbreaking advancements in real-time benefit verification and prior authorizations. Industry pioneers from bio/pharma, PBMs, plans, pharmacies, health systems, prescribers and system solution providers will discuss the latest in standards, adoption and best practices to ensure streamlined prescriber workflow and faster access to medication for patients.

Featured Sessions Include:
  • Regulatory/Legislative Update - Gain Real-Time Updates on State and Federal Legislative Advancements
  • NCPDP Update - Advancements and Standards for Adoption
  • Transcending to Higher Efficiency and Patient Access – A Vision and Reflection on Breakthroughs in Integrated ePA Functionality and Real-Time Determinations
  • Implementation Best Practices – Showcasing Trailblazing Efforts and Pilots to Date
  • Health System Perspectives on Patient Portal Implementation
  • Integrating ePrior Authorizations and Benefit Determinations into the HUB Service Model
  • Ensuring Continuity of Care and Addressing PA Renewals
  • New Frontiers in Formulary Data Management and Prior Authorization Processes
Confirmed Speakers:
  • Lynnae M. Mahaney BSPharm, MBA, FASHP, Center for Pharmacy Practice Accreditation
  • Nicole Russell, Manager of Government Affairs, NCPDP
  • Sam Garas, RPh MSc, Director-Medical Outcomes Specialist- National Specialty Accounts, North America Medical Affairs, Pfizer, Inc.
  • John Klimek, R.Ph. Senior Vice President, Standards and Industry Information Technology, NCPDP
  • Catherine C. Graeff, R.Ph, MBA, Principal, Sonora Advisory Group; NCPDP Work Group
  • Shelly Spiro, Executive Director, Pharmacy HIT Collaborative
  • Tyler Scheid, Senior Policy Analyst, Administrative Simplification Initiatives, American Medical Association
  • Robert Sanchez, Senior Director for Enterprise Product Innovation, CVS Health
  • Michele Davidson, Senior Manager, Pharmacy Technical Standards, Development & Policy, Government Relations, Walgreen Co.
  • Joel White, Founder and President, Horizon Government Affairs
Be among the first to see the complete agenda by visiting here, or check out www.cbinet.com/benefit-check for further details and to register. Drug Channels readers will save $400 off of the standard registration rate when they use discount code HYE399.*

*Cannot be combined with other offers or used towards a current registration. Cannot be combined with special category rate or non-profit rates. Other restrictions may apply.


The content of Sponsored Posts does not necessarily reflect the views of Pembroke Consulting, Inc., Drug Channels, or any of its employees.

Tuesday, March 14, 2017

Scott Gottlieb’s Radical Idea for Disrupting U.S. Drug Channels: Implications for PBMs, Wholesalers, and Pharmacies

President Trump has nominated Scott Gottlieb, M.D., to be the commissioner of the Food and Drug Administration (FDA). I’ve been a big fan of Dr. Gottlieb’s for some time, and think he is an outstanding choice.

In addition to his role overseeing the FDA, Dr. Gottlieb will be a key policy advisor to the Trump administration on drug pricing. As you will see below, Dr. Gottlieb is unusually familiar with the warped incentives in the gross-to-net bubble—the growing spread between a manufacturer’s list price for a drug and the net price to a third-party payer after rebates.

His solution is to migrate brand-name pricing from today’s formulary rebates to up-front discounts. As I explain below, such a shift would radically disrupt the business models and economics of pharmacy benefit managers (PBMs), wholesalers, and pharmacies. I speculate that the change would be negative for the channel.

Right now, most people believe that we’ll continue to muddle along with our Rube Goldberg system. But if Dr. Gottlieb is confirmed as FDA commissioner, then perhaps we will see a black swan event—a massively important yet unexpected break from current practice. Hmmm…

Monday, March 13, 2017

19th Annual Medicaid and Government Pricing Congress

Medicaid and Government Pricing Congress
May 8-10, 2017
Disney’s BoardWalk Inn | Orlando, Florida

Mark your calendar for CBI's Medicaid and Government Pricing 2017 – a dynamic and power-packed program for government pricing professionals!

Between the looming prospect of Obamacare repeal or replacement, the recently released HRSA Final Rule on Calculation of 340B Ceiling Prices and much more, there is no better time to join industry at CBI’s 19th Annual Medicaid and Government Pricing Congress and gain an in-depth understanding of how to face the complexities of this rapidly evolving landscape.

Taking place May 8-10 at the BoardWalk Inn in Orlando, FL, attendees will gain best practices and practical strategies on issues including healthcare policy and politics, drug pricing enforcement, MDRP compliance, 340B, FSS solicitation, gross-to-net and much more. This all-encompassing agenda features tailored tracks, interactive working groups, political keynote address and a State Medicaid Directory panel discussion.

Convene with Leading Government Pricing Experts Representing:

Bristol-Myers Squibb | Former Head of Health and Human Services − Commonwealth of Pennsylvania and the State of Rhode Island | Department of Veterans Affairs | Magellan Rx Management | Apexus | Sunovion Pharmaceuticals | KPMG | Amneal Pharmaceuticals | Huron Consulting Group | Pfizer Inc | Sidley Austin LLP | Sandoz | BDO | Mississippi Division of Medicaid | Acorda Therapeutics, Inc. | Cumberland Consulting Group | Akara Group LLC | AbbVie | Florida Agency for Health Care Administration | Daiichi Sankyo, Inc. | West-Ward Pharmaceuticals | M. Lee Consulting, LLC | Helsinn Therapeutics (U.S.), Inc. | Fresenius Medical Care North America | Johnson & Johnson Health Care Systems Inc. | OIG, United States Department of Veterans Affairs | Oklahoma Health Care Authority | Celgene Corporation | Gilead Sciences, Inc. | Deloitte & Touche LLP | King & Spalding | PBS NewsHour | Department of Health and Human Services, OIG | Arent Fox LLP | PhRMA | Chiesi USA, Inc. | Indivior | McKesson | Plus more!


Use Discount Code DRC400 by March 24, 2017

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*Discount expires 3/24/2017; Discount cannot be combined with other offers or used towards a current registration. Cannot be combined with special category rates. Other restrictions may apply.


The content of Sponsored Posts does not necessarily reflect the views of Pembroke Consulting, Inc., Drug Channels, or any of its employees.

Thursday, March 09, 2017

Janssen Reveals and Explains Its List and Net Drug Pricing

Johnson & Johnson’s Janssen business unit recently released the 2016 Janssen U.S. Transparency Report. (Free download.)

The report, which provides new disclosures about the company’s activities, is very well done. Below, I offer some observations on Janssen’s pricing and its discussion of the drug channel system.

Notably, Janssen revealed that its average list price increases have been below 10% for at least the past five years. Its average net price increases, however, have been roughly half of the list price increases. For 2016, list-to-net reductions were 35.2%.

The report makes a meaningful contribution to the ongoing debate about the true pricing of prescription drugs and the gap between a manufacturer’s gross (list) prices and the net prices to third-party payers. Every Drug Channels reader should review it.

Tuesday, March 07, 2017

The New Health Transformation Alliance Deal: Mostly Good for PBMs, but Bad for Express Scripts

Last night, The Wall Street Journal reported that corporate members of the Health Transformation Alliance (HTA) will direct their member's pharmacy benefit management business to the Caremark business of CVS Health and the OptumRx business of UnitedHealth. See Alliance of Companies Unveil First Steps Aimed at Cutting Health-Care Costs.

HTA includes 38 of the country’s largest corporations. (See a list of the 20 founding companies here.) Many HTA members already use Caremark and OptumRx. These PBMs will retain their role in the drug channel, although with presumably lower margins, more uniform contracts, and greater transparency. Express Scripts, however, risks significant customer losses, because a number of HTA members are Express Scripts customers.

The HTA deal reinforces PBMs continued presence and role in the drug channel. By forming a giant buying group, plan sponsors are choosing to evolve their PBM relationships, not bypass the middleman. That's how markets are supposed to work. Read on for my additional observations on this novel arrangement.

Monday, March 06, 2017

The U.S. Health Care Congress 2017

The U.S. Health Care Congress 2017
April 30 – May 3, 2017 | Washington, DC

The U.S. Health Care Congress 2017 agenda has been updated and re-released.

Reserve your seat at the table with decision-makers from all walks of health care including payer, health system, policy, employer, and life sciences organizations who are committed to transforming and improving health care.

Join World Congress April 30 – May 3, 2017 in Washington, DC.

Early rates ends Friday, March 17, 2017. Use promo code DCIPEM for an additional $200 savings off the early rate.
  • Click here to download the updated agenda brochure.
The U.S. Health Care Congress 2017 will feature:
  • 4 Days of Big-Picture Keynote Addresses and Panel Discussions
    • 200+ Distinguished Speakers
  • Networking and Exhibit Hall:
    • 50+ Exhibit Booths
    • 1200+ Domestic and International Participants
  • 14 Co-Located Events
    • Health Plan and Payer Summit
    • Hospital and Health System Summit
    • Health System Integration Summit
    • Nurse Leadership Summit
    • Medicaid and Health Policy Summit
    • Bundled Payments Summit
    • Payer-Provider Behavioral Health Summit
    • Destination Health: The Medical Travel Summit USA
    • Women's Health Summit
    • Data Analytics and Technology Summit
    • Network and Contract Management Summit for Providers and Payers
    • Employer-Health System Direct Contracting, Worksite Clinics, and Value-Based Partnerships Summit
    • Prevention, Wellness, and Disease Management Summit
    • Corporate Health-Risk Innovation Summit
Who will be there? Click here to view a sample list of your colleagues who have already reserved their seat. World Congress looks forward to seeing you in DC.

Complete your registration before March 17, 2017 using promo code DCIPEM for an additional $200 savings. For an immediate reservation, call +1 781-939-2400 or reserve online.

*Discount not available on Gov't, workshop only or webcast rates. May not be combined with any other offer.


The content of Sponsored Posts does not necessarily reflect the views of Pembroke Consulting, Inc., Drug Channels, or any of its employees.

Friday, March 03, 2017

Watch Congress Vent About PBMs on the House Floor

ICYMI: Rep. Doug Collins (R-GA) led a 60 minute rant against pharmacy benefit managers (PBMs) in the U.S. House of Representatives. Joining him were congressmen Brian Babin (R-TX), Buddy Carter (R-GA), John J. Duncan, Jr. (R-TN), Dave Loebsack (D-IA), and Austin Scott (R-GA). It’s an enlightening tour through the usual grievances and conspiracy theories about PBMs.

Regular readers know that I have called out PBMs for the potentially warped incentives embedded in rebate practices and the gross-to-net bubble. See, for example, this article and this one.

But the overheated rhetoric on the House floor was truly jaw dropping. Example: Rep. Collins kicked things off in style by claiming that PBMs engage in “monopolistic, terrorist kind of ways that they are dealing with our community pharmacies and independent pharmacies.”

Terrorists? Really?!? I wonder how ISIS feels about this comparison.

Video, transcript, and additional observations below. Enjoy!

Thursday, March 02, 2017

New CMS Forecast: Lower Drug Spending Growth

The Centers for Medicare & Medicaid Services (CMS) recently released its updated forecasts for national health expenditures. See the Health Affairs article: National Health Expenditure Projections, 2016–25: Price Increases, Aging Push Sector To 20 Percent Of Economy. (Available for free to subscribers and to others for purchase.)

These new data don’t account for any changes in policy or the law, such a repeal of the Affordable Care Act (ACA). They do, however, show drug spending growth below that of CMS’s July 2016 projections. The updated forecasts predict that through 2025, drug spending will grow at roughly the same rate as will total U.S. healthcare spending.

By 2025, the U.S. is expected to have spent about $597 billion annually on outpatient prescription drugs. Just seven months ago, the 2025 figure was projected to $615 billion. Below, I also review drug spending projections by payer. CMS expects that drug spending will account for a stable share of private insurance, but a bigger part of Medicare spending.

Note that these projections will be revised when the law changes. For now, we have only CMS’s vision. Reality will render its own opinion soon.