The Top 15 Specialty Pharmacies of 2017: PBMs and Payers Still Dominate (rerun)

This week, I’m rerunning some popular posts while I attend Asembia’s 2018 Specialty Pharmacy Summit. Click here to see the original post and comments from March 2018.

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Below is our exclusive Drug Channels Institute list of the 15 largest pharmacies, ranked by estimated 2017 revenues from dispensing specialty pharmaceuticals.

The battle for control of the specialty market accelerated in 2017, though pharmacies owned by pharmacy benefit managers (PBMs) continued to capture most of the market share. The top four specialty pharmacies are all owned or co-owned by a PBM. They accounted for about two-thirds of prescription revenues from pharmacy-dispensed specialty drugs.

Vertical integration M&A has been in the news. But as our data shows, the integration of PBMs and specialty pharmacies has already happened.

Drug Channels News Roundup, April 2018: Copay Accumulators, Express Scripts, Pharmacy Pricing, Amazon, and Almost-Pharmacist Jack Nicklaus

Baseball season is finally here! Oil up your glove, lace up your cleats, and let's run the bases around this month's news stories. Remember: Sometimes you win, sometimes you lose, and sometimes it rains.

In this issue:

• Green Monster: The drug manufacturers that are most vulnerable to copay accumulators

• Pop Fly: Express Scripts wants to pop the gross-to-net bubble?

• Foul! Fresh evidence that uninsured consumers pay rip-off cash prices at retail pharmacies

• Strikeout: My $0.02 on Amazon’s decision not to sell drugs to hospitals

Plus, from the diamond to the green: the secret pharmacy history of golf legend Jack Nicklaus.

P.S. For my daily pitches on the industry’s hits and misses, follow @DrugChannels on Twitter. My recent tweets have covered copay accumulators, the oncology market, drug costs, biosimilars, PBMs, and more.

The Gross-to-Net Bubble Topped $150 Billion in 2017

In 2017, the gross-to-net bubble—the ever-growing pile of money between a manufacturer’s list price for a drug and the net price after rebates and other reductions—hit a new high.

Based on new data from IQVIA, manufacturers of brand-name drugs in 2017 reduced list price revenues by an astonishing $153 billion. Those reductions came primarily from rebates, discounts, and other payments to the drug channel. That figure has grown by 10% from the 2016 figure, even though net prices for brand-name drugs grew by only 1.9%.

We can no longer ignore the warped incentives created by our bubble buddy. As regular readers know, I think plan sponsors and insurers should be more transparent about what they do with the billions collected via pharmacy benefit managers (PBMs) from manufacturers—or even be forced to pass through these rebates to point of sale. Read on and let me know what you think.

CBI’s 14th Annual Commercial Contract & Chargeback Excellence

CBI’s 14th Annual Commercial Contract & Chargeback Excellence
June 20-21, 2018 | Philadelphia, PA

CBI’s Commercial Contract & Chargeback Excellence Summit, take a deep dive into ways to improve chargeback efficiency, navigate class of trade assignments, streamline membership management and optimize contract administration and operations. Through illustrating software solutions, case studies and perspectives from leading distribution partners, this conference is a comprehensive forum for pharmaceutical professionals to learn best practices and gain strategies to improve contract operations and retain revenue.

Download the agenda here.

2018 Program Highlights:

• Partnership Pavilion – Collaborate with Distribution Partners, Manufacturers and Legal counterparts
• Manufacturer Panel – Overcome Key Challenges of Contract Operations and Administration
• Advanced Discussions on the hottest Topics Impacting Commercial Contracting:
• Manage Tier Commitments and Compliance in Complex Contracting
• Explore Key Benefits and Challenges of Outsourcing Chargebacks and Membership Functions
• Apply Data Analytics to Sales and Chargebacks to Enhance Business Decision-Making

Visit www.cbinet.com/chargebacks for further details and to register. Drug Channels readers will save $400 off the standard rate when they use discount code XYC552 and register prior to May 18th.

CBI will see you there!

*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.

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

Improving Patient Prescription Access and Adherence Journeys

Today’s guest post comes from Bill Nolan, VP/GM of McKesson Specialty Health.

Bill discusses ExpressCoverage™, a solution from McKesson and CoverMyMeds^®. It offers new ways for McKesson’s Patient Support Services to electronically access and efficiently communicate with a vast network of physicians, payers, and pharmacies. Bill highlights how this tool improves the specialty patient’s access and adherence to therapy.

To learn more, download the free document ExpressCoverage™: Revolutionizing Patient Drug Access For Pharmaceutical Companies.

Read on for Bill’s insights.

Why Retail Pharmacies Still Overcharge Uninsured Patients—And What That Means for Amazon

Consumer Reports recently published a fascinating survey of pharmacies’ cash prices for five common generic drug prescriptions.

The results were startling. Prescription prices ranged from $66 to $1,351—a nearly 2,000% difference. The big three retail drugstore chains—CVS, Walgreens, and Rite Aid—consistently had higher average prices compared with those of other pharmacies. Independent pharmacies had some of the lowest prices, but also some of the highest prices.

Our analysis of prescription profits highlights the pharmacy industry’s unfortunate pricing strategy for cash-pay prescriptions. Average profit margins ranged from $8 to $264 per prescription for the five drugs. We can only hope that consumers didn’t pay the pharmacies’ sky-high cash prices.

The results expose the insane soak-the-poor mentality baked into the U.S. pharmacy industry’s historical pricing models. The data also highlight the potential pharmacy opportunity for Amazon.

P.S. Before other states follow Maryland and pass laws against price gouging by generic manufacturers, perhaps they should take a closer look at the behavior of their own states’ pharmacies.

McKesson Leads Another Round of PSAO Consolidation

Last week, McKesson announced the formation of Health Mart Atlas (HMA), a joint venture between McKesson’s Access Health business and American Pharmacy Network Solutions (APNS). Click here to read the press release.

The combination extends McKesson’s position as the largest pharmacy services administrative organization (PSAO). PSAOs are the awkwardly named intermediaries that operate between smaller pharmacies and pharmacy benefit managers (PBMs), per our U.S. Distribution and Reimbursement System flowchart.

When the Arete Pharmacy Network was formed, in 2016, I predicted that the fragmented PSAO sector would begin a long-overdue consolidation. Given the PBM titans now sitting atop Mt. Olympus, the remaining PSAOs can’t shrug off Health Mart Atlas.

CBI’s 4th GPO Membership Eligibility & Class of Trade Maintenance

4th GPO Membership Eligibility & Class of Trade Maintenance
June 19-20, 2018 | Philadelphia, PA
www.cbinet.com/gpo

Assembling over 100 industry professionals representing manufacturers, GPOs, wholesalers, distributors, and solution providers, CBI’s 4th GPO Membership Eligibility & Class of Trade Maintenance conference provides a rare, interactive forum on membership data management, class of trade, and workflow efficiency. Join your colleagues this June to learn strategies and insights from peers and industry stakeholders, and acquire the ability to overcome significant operational challenges related to proper management of GPO membership data. For additional information on session topics and speaking faculty, download the agenda here.

Visit www.cbinet.com/gpo for further details and to register. Drug Channels readers will save $400 off the standard rate when they use discount code NHY548 and register prior to April 20th.*

Compelling Sessions and Actionable Takeaways on Topics, Including:

• Spotlight Panel Session: Ensure Seamless Membership Management and Accountability Across the GPO Supply Chain
• Understand Best Practices for Efficient Membership Maintenance in a World on HCP Service Evolution
• Kickback Risks of Arrangements with GPOs – Case Studies on Fraud and Abuse
• Audit COT Designations to Find Inaccuracies
• Develop Strategies to Streamline Communication With Your Distribution Network
• Distinguished Speaking Faculty Includes: Kendrion Biopharma, Anada Inc., Sanofi, UCB, Zydus Pharmaceuticals, Amneal Pharmaceuticals, Prometric Biotheraputics, Lilly USA, Chiesi USA Inc., and more.

Visit www.cbinet.com/gpo for further details and to register. Drug Channels readers will save $400 off the standard rate when they use discount code NHY548 and register prior to April 20th.*

CBI will see you there!

*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.

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

Copay Accumulator Programs: TrialCard Measures the Impact on Patients and Pharmaceutical Manufacturers

Today’s guest post comes from Mark Bouck, President and CEO of TrialCard.

Mark reviews copay accumulator adjustment programs and shares some of TrialCard’s unique data about these programs. He also discusses TrialCard’s proprietary methodology for identifying patients affected by this benefit design. This topic is crucial for 2018 (per my own article from January), so I encourage you to review his commentary.

To learn more about TrialCard’s approach to copay accumulator programs, download the free e-book The Rise of Co-Pay Accumulator Programs: Are Your Brand’s Patients at Risk?

To learn more about TrialCard’s solutions for accumulators, email Mark Droke, TrialCard's Senior Vice President, Patient Affordability & Virtual Engagement Business Units, at mark.droke@trialcard.com. You can visit Trialcard in booth 610 at Asembia’s upcoming 2018 Specialty Pharmacy Summit.

EXCLUSIVE: A Record Number of Specialty Pharmacies Now Have Accreditation

It’s time for Drug Channels Institute’s annual update on the accreditation of specialty pharmacies.

Our spooky research team (pictured at right) is back! We have counted every pharmacy location that has achieved accreditation by an independent organization. Our exclusive findings:

• The number of specialty pharmacies with accreditation expanded again in 2017. We identified 729 unique pharmacy locations that by the end of 2017 had achieved accreditation from the three major independent accreditation organizations. The 2017 figure is almost double the 2015 figure.

• For the second consecutive year, pharmacy locations owned by healthcare providers—such as hospitals, health systems, physician practices, and providers’ group purchasing organizations—were the fastest-growing category of accredited specialty pharmacies.

See below for the complete details of our exclusive analysis. Notes for fellow arithmomaniacs are in the final section.

Pharmacies that compete to dispense specialty therapies are owned by a diverse set of organizations: pharmacy benefit managers (PBMs), retail chains, health plans, pharmaceutical wholesalers, physician practices, and hospital systems. There are also many independent specialty pharmacies. The battle for control of the specialty market is accelerating, though PBMs continue to dominate the market as channels narrow.

CBI’s 20th Annual Medicaid and Government Pricing Congress

CBI’s 20th Annual Medicaid and Government Pricing Congress
May 21-23, 2018 | Orlando, FL
www.cbinet.com/medicaid

Join the Government Pricing industry for YEAR 20 of CBI's Medicaid Congress at Disney’s Yacht & Beach Club in Orlando! Take a deep dive into sessions on 340B expansion, state pricing and transparency, FSS contracting, value-based frameworks, reasonable assumptions, Medicare coverage and more. You can read all about it here.

Visit www.cbinet.com/medicaid for further details and to register. Drug Channels readers will save $300 off the standard rate when they use discount code BMK348 and register prior to April 27th.

Features for 2018 Include:

• Three Tailored Content Strategy Streams:
• 1. Strategic Pricing and Transparency
• 2. Statutory Reporting Requirements
• 3. Finance and Compliance Operations
• Six Interactive Workshops:
• 1. GTN Strategies and Solutions
• 2. Product Acquisition Due Diligence and GP Considerations
• 3. Generic Inflation Penalty Operational Guidance
• 4. Value-Based Frameworks and Government Pricing Strategies
• 5. Medicaid and GP Reporting – Build or Buy?
• 6. Supplemental Rebates – Current Events and Operational Effectiveness
• Plus, a State Medicaid Director Panel, 101 Boot Camp, Senior Executive Think Tank, Healthcare Innovation Keynote and much more!

Speakers include representatives from CMS, Duke Margolis Center for Health Policy, OIG, Sidley Austin, BIO, Arnold & Porter, Deloitte, UCB, Eli Lilly, BMS, Novartis, Pfizer, Cumberland Consulting, Sunovion, J&J, Insmed, Kite Pharma, King & Spalding, KPMG and more.

Visit www.cbinet.com/medicaid for further details and to register. Drug Channels readers will save $300 off the standard rate when they use discount code BMK348 and register prior to April 27th.

CBI will see you there!

*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.

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

Connect With Drug Channels at #Asembia18

In three weeks, Drug Channels Institute will hit Las Vegas for Asembia’s 2018 Specialty Pharmacy Summit.

Here are three ways that you can interact with us in Las Vegas:

1) Learn how Drug Channels can help your business.

Drug Channels reaches a large, diverse audience throughout the pharmaceutical and healthcare industries. We have an engaged and growing audience of more than 21,000 readers who regularly open, click, forward, and share our content.

Drug Channels has an engagement rate that is more than twice that of the average media platform.

To discover how you can reach our audience, you can speak personally with my wife and business partner, Paula Fein, M.S.Ed. Paula is Drug Channels Institute’s VP of Business Development. FYI: In the picture, she's on the left. Email her at paula@drugchannelsinstitute.com and she’ll be happy to meet with you.

In the meantime, download the 2018 Drug Channels Media Kit for an overview of the site, our traffic, and opportunities for sponsored posts.

[Click to Download]

2) Join me at the Featured Session.

On Tuesday, May 1, I’ll lead the event’s Featured Session, titled Specialty Pharmacy Industry Outlook: What’s Happened & What’s Ahead. I'll be joined by Doug Long from IQVIA and Lisa Gill from J.P. Morgan Securities. See you in the Encore Ballroom at 9:00 AM!

[Click to Enlarge]

3) Just say hello!

We love meeting and talking with Drug Channels readers, so please introduce yourself. Don’t worry: It will all be off the record. What we discuss in Vegas will stay in Vegas. ;)

See you soon!

P.S. To prep for the Summit, check out Chapter 3 (“Specialty Drugs and Specialty Pharmacies”) of our new 2018 Economic Report on U.S. Pharmacies and Pharmacy Benefit Managers.

Payer Power: Why Eli Lilly, Janssen, and Merck Deeply Discount Their Drug Prices

Over the past few weeks, three of the largest pharmaceutical manufacturers—Eli Lilly, Janssen, and Merck—have publicly reported the 2017 gross and net price changes for their U.S. product portfolios, along with average discounts. As far as I know, these are the only manufacturers that have publicly reported these data. See the links below.

As you will see, the three companies have provided average discounts from list prices of 42% to 51%. Two of the three companies experienced a year-over-year decrease in average net prices.

Payers and PBMs frequently recommend that manufacturers just lower the cost of their drugs. These data demonstrate that’s exactly what these three companies have done. Of course, the price cuts were provided in the form of rebates and discounts to the drug channel. We still don’t know how, if at all, patients benefited from the declining prices for their drugs.

The Mysteries of Pass-Through Status: Why Medicare and Seniors Are Now Paying More for Lower-Cost Biosimilars at Hospitals

An unanticipated combination of government policy changes has led to a truly bizarre circumstance: The Medicare program and individual Medicare patients are paying more for lower-cost biosimilars. Further, hospitals are earning windfall profits from these lower-cost biosimilars, though physician offices can’t access the same financial benefits.

Sound bonkers? You bet.

To understand this strange turn of events, I delve into the vagaries of Medicare Part B reimbursement and the recently implemented outpatient prospective payment system (OPPS) rule for drugs acquired under the 340B Drug Pricing Program.

As I explain below, the Centers for Medicare & Medicaid Services (CMS) recently made all biosimilars eligible for “pass-through payment status.” This obscure regulatory change (also explained below) altered reimbursement for some—but not all—biosimilars.

I illustrate the funky economics behind biosimilars’ newfound profitability and raise four crucial policy questions. Expect to hear more about this as politicians digest the spin from all sides of these tangled policies. However, it’s clear that CMS needs to act before this strange mix of policies disrupts the biosimilar market.

Data Rev18 Summit

Data Rev18 Summit
June 19-20 | Philadelphia, PA
www.worldcongress.com/events/DataCongress

This June 19 – 20 Philadelphia will become home to three case study driven events under 1 roof focused on real world data. Over 150+ data leaders will convene at the Data Rev18 Summit in Philadelphia.

Attend the only Congress aiming to break down the organizational silos in order to facilitate a seamless and free flow movement of data, throughout the life cycle from Clinical all the way through Commercial – aiding your business in truly embracing Data Driven Decision Making.

Register with discount code DC200 and save $200 off of current registration rates!

Attendees will benefit from three case-study driven events under one roof showcasing best practices for enhanced drug development and business insights through the new wave of innovation in data & analytics, real world data & real world evidence.

Three Co-located Summits include:

• 3rd Real World Data for Competitive Advantage Summit
• 2nd Real World Data for Clinical Innovation & R&D Summit
• 2nd Real World Data & Analytics Centers of Excellence Best Practices Forum

Key Agenda Highlights include:

• FDA Guidance on Real World Data Regulatory Decision Making Post Passage of 21st Century Cures Act
• KEYNOTE PANEL DISCUSSION: Optimize Business Insights and Enhance R&D Through Real World Data and Advanced Analytics
• PANEL DISCUSSION: Artificial Intelligence: Pharma’s Path to Adopting AI and Other Emerging Technologies
• CASE STUDY: CancerLinQ and FDA Collaboration on Real World Impacts of Precision Medicine Therapies
• CASE STUDY: Building a Centralized Big Data CoE to be the Bedrock for Establishing a Data Driven Company
• Utilize RWD From Real World Experts Through Acquisition to Inform Clinical Trial Design
• And many more!

Confirmed speakers include executives representing:
Novartis| Pfizer| Johnson & Johnson| Eli Lilly | AbbVie | GSK | FDA | Janssen | Astrazeneca | Trevena | Biogen | and many more!

Don’t miss out on this opportunity to experience unprecedented value, networking and education. Register with discount code DC200 and save $200 off of current registration rates!

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