tag:blogger.com,1999:blog-28450497.post5341977758795572012..comments2008-10-28T08:41:48.216-04:00Adam J. Fein, Ph.D.http://www.blogger.com/profile/12217252282643255442noreply@blogger.comBlogger4125tag:blogger.com,1999:blog-28450497.post-5017374594289321592008-10-28T08:41:00.000-04:002008-10-28T08:41:00.000-04:00As a quick postscript to my comments, McKesson just renamed its specialty group following the Walgreens deal:<BR/><BR/><A HREF="http://www.mckesson.com/en_us/McKesson.com/About%2BUs/Newsroom/Press%2BReleases/2008/McKesson%2BRenames%2BSpecialty%2BBusiness%2BUnit%2B%2527%2527McKesson%2BSpecialty%2BCare%2BSolutions%2527%2527%2B10-27-2008.html" REL="nofollow">McKesson Renames Specialty Business Unit ''McKesson Specialty Care Solutions'' Following Completion of OTN Integration</A><BR/><BR/>AdamAdam J. Feinhttp://www.blogger.com/profile/15774296048321605590noreply@blogger.comtag:blogger.com,1999:blog-28450497.post-37141623497653195772008-10-24T21:04:00.000-04:002008-10-24T21:04:00.000-04:00To the 2nd anonymous commenter:<BR/><BR/>Email me and I'll see if I can help you understand how the system works.<BR/><BR/>AdamAdam J. Feinhttp://www.blogger.com/profile/15774296048321605590noreply@blogger.comtag:blogger.com,1999:blog-28450497.post-50076111216827816862008-10-24T16:36:00.000-04:002008-10-24T16:36:00.000-04:00I am trying to understand the role of generic drugs vs. speciality/namebrand/patent protected drugs in reference to pricing. If the trend is more generic drugs doesnt that give a competitive advantage to a walmart who has the scale to be able to price out just about anyone? Are there limits on just how little margin they can make on drugs to entice someone in the store. On the other side for the patent protected drugs is the price and margin dictated by the manufacturer with absolutely no deviation or can the walgreens and walmarts of the world change how much the final sale price is for these type of drugs.<BR/><BR/>Assuming the customer is normally on a copay or subsidized prescription plan and they copay is below the price say a walmart is charging doesnt the overall cost become a non issue? or does the inverse hold true, by managing the margin on the backend of the deal is a large retailer able to create a lower price environment using generics to win customers away from a walgreens or CVS.<BR/> <BR/>Sorry for the long question, I guess I am just having trouble understanding how this market works since with the Medco's of the world in the middle giving a customer a 10 dollar copay for drugs and walmart on the other end saying they will charge 4 dollars for a group of generics it would seem that even though the generics offer price relief the managed plans put a backstop in place with the prescription plans to really dissuade any type of price wars or competitive pricing on the generics. Nothing is free in this world, if the drugs cost 100 dollars and the copay covers 10 dollars who pays the other 90 dollars plus the margins to all involved? How is that money collected, does it come from a premium paid into a healthcare plan that is then put into a pool of money used for prescription plans? The case that I have seen made which bothers me is that having pricing pressure or the emergence of new and lower priced generics really offers little true overall cost relief and just lines the pockets of the walgreens and cvs's of the world. why not just lower the price down to an acceptable point at time of sale and take the overall spend from say 100 dollar to maybe 25 or 50 with the seller still getting a large margin on the sale? I guess I feel like I am missing something in the mechanics of this industry and I am trying to correctly analyze the situation. any insight is greatly appreciated.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-28450497.post-37520832813625700232008-10-22T09:16:00.000-04:002008-10-22T09:16:00.000-04:00Seems the big get bigger.<BR/>I re-read your WMT/CAT posting. What I find amazing is that you don't see restrictive agreements like this with the large chains. Seems like WAG or CVS would both be on this type of deal. They have more stores.<BR/>-AAnonymousnoreply@blogger.com