Does the Drug Enforcement Administration (DEA) understand the distribution system for legitimate, prescription drugs? It sure doesn't look that way.
The DEA once again went after Cardinal Health (NYSE:CAH) by suspending the company’s controlled substances license at its Lakeland, FL, facility. Late Friday, Cardinal successfully won a temporary restraining order against the DEA. See Cardinal Health’s statement.
Kudos to Cardinal Health CEO George Barrett for standing up to an overzealous DEA. When this happened in 2007, Cardinal’s tentative and indecisive response led to major business losses, from which the company has never fully recovered. I'm curious to see how CVS Caremark (NYSE:CVS) reacts to last Friday's raid at 2 of its Florida stores.
As I explain below, the DEA started targeting wholesalers and manufacturers because they can't stop the real criminals—the patients abusing prescription drugs, the physicians running “pill mills,” and the pharmacies dealing these drugs.
And don’t even get me started on how the DEA has created a shortage of ADHD meds by putting manufacturers under their thumb… Read more...
By April 2, CMS will receive many detailed comments. But who can wait that long?
So, here’s my pre-Super Bowl round-up of 5 especially useful and insightful analyses of the proposed rule. These reports and articles are written by lawyers and government pricing experts, so they are scarily-specific and have many more details than my cursory overview.
As a bonus, I also include a look at how much Americans will be eating (by food type!) on Sunday and share the new Ferris Bueller commercial. Ooooh yeah. Read more...
As I discussed in last week’s Big Trouble in the VA Contract: Who will win?, McKesson (NYSE:MCK) has been facing questions about “improper buying” under its Department of Veterans Affairs pharmaceutical prime vendor (PPV) contract.
Yesterday’s House Committee on Veterans’ Affairs hearing seems to exonerate McKesson. The VA took responsibility for the open market, non-contracted purchases and complimented McKesson on its performance. Good news for McKesson, bad news for taxpayers. Here’s the Washington Post’s summary: VA: Buying medications outside of contracts was just an effort to help veterans.
Below are some highlights from the testimony along with my updated but still-unscientific guess at which wholesaler will win the contract. BTW, there was also an interesting discussion about drug shortages and how McKesson manages supply and handles allocations. Read more...
Late Friday, the Centers for Medicare and Medicaid Services (CMS) finally released its long-overdue proposed rule regarding Average Manufacturer Price (AMP) under the Patient Protection and Affordable Care Act (PPACA). Savor all of the bureaucratese for yourself in the Proposed Rule.
In the proposed rule, CMS doubles-down on its use of AMP in the Medicaid program and lays more groundwork for Actual Acquisition Cost (AAC) reimbursement methodologies.
Manufacturers should pay close attention to this proposed rule because of its potential impact on trade agreements with wholesalers and pharmacies. CMS is proposing important changes to its interpretation of bona fide service fees, while simultaneously choosing not to clarify key items.
Welcome to the ugly underbelly of healthcare reform! Read more...
Yesterday, Larry Marsh at Barclays Capital reported that the much-delayed Department of Veterans Affairs pharmaceutical prime vendor (PPV) contract has been pushed back again, at least until late March.
Below, I take a totally unscientific guess at which wholesaler will win the $4 billion VA contract, given odd rumblings in the wholesale customer markets. And since McKesson provides a steep 5.15% discount to the VA, it’s a good opportunity to chat about the oft-misunderstood cost-minus pricing model. Read more...
This month’s selection of noteworthy news stories looks at broader health care cost containment debate.
Depressing news on disease management
A fascinating debate on ACOs
The sad realities of U.S healthcare spending
Plus, watch The Daily Show’s Jon Stewart lob softball questions at Secretary of Health and Human Services Kathleen Sebelius, who does some major pre-State of the Union spinning.
Drug Channels is written by Adam J. Fein, Ph.D., founder and president of Pembroke Consulting, Inc.. Dr. Fein, one of the country’s foremost experts on pharmaceutical economics and channel strategy, consults with clients in the pharmaceutical industry. Dr. Fein earned his Ph.D. from the Wharton School of Business and a B.A., summa cum laude, from Brandeis University. He lives in Philadelphia with his wife and their two children.
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