Drug Channels delivers timely analysis and provocative opinions from Adam J. Fein, Ph.D., the country's foremost expert on pharmaceutical economics and the drug distribution system. Drug Channels reaches an engaged, loyal and growing audience of more than 30,000 subscribers. Learn more...

Monday, July 06, 2020

The Top 15 U.S. Pharmacies of 2019: Specialty Drugs Drive the Industry’s Evolution (rerun)

This week (Monday through Thursday), I’m rerunning some popular posts. Click here to see the original post and comments from March 2020.

Next week, Drug Channels Institute will release our 2020 Economic Report on U.S. Pharmacies and Pharmacy Benefit Managers. It’s the 11th edition of our popular and comprehensive examination of the entire drug pricing, reimbursement, and dispensing system.

The exhibit below—one of 203 in our new report—provides a first look at the 15 largest pharmacies, ranked by total U.S. prescription dispensing revenues for calendar year 2019. I also highlight business developments that shifted market share among the biggest players.

As you will see, pharmacy industry prescription dispensing revenues reached a record $446 billion in 2019. Revenues were highly concentrated due to the rapid growth of large specialty pharmacies and the multiple transactions that we discuss throughout our report.

For a sneak peek at the complete report, click here to download a free pre-publication draft overview (including the table of contents and a list of exhibits). We’re offering special discounted pricing if you order before March 22, 2019.

Wednesday, June 24, 2020

Drug Channels News Roundup, June 2020: CVS’s New GPO, CMS on Copay Accumulators, GoodRx Fees, Supermarket Pharmacies, and Merck’s Ken Frazier

Happy 244th birthday, America! Before you declare your (socially-distanced) independence, get up close and personal with these Drug Channels fireworks:
  • CVS launches a new GPO for its PBM
  • CMS rethinks copay accumulators
  • Here’s how GoodRx makes money
  • Supermarkets face pharmacy challenges
Plus, powerful and important comments from Ken Frazier, CEO of Merck.

P.S. Join the more than 9,500 followers of my curated links to neat stuff at @DrugChannels on Twitter. My recent tweets have highlighted: Amazon’s activities, PillPack’s bad reviews, 340B outrages, rebate reform redux, biosimilar pricing, managed Medicaid market shares, drug pricing, blockchain hype, and the warp speed vs. hyperspace debate.

Tuesday, June 16, 2020

PBMs and Drug Spending in 2019: CVS Health and Express Scripts Outperform Prime Therapeutics

It’s time for our annual Drug Channels examination of PBM drug spending reports. For 2019, we again aim our magnifying glass at the annual trend reports from the largest pharmacy benefit managers (PBMs): CVS Health, Express Scripts, and Prime Therapeutics. (See their report links below.)

Once again, we find that commercial drug spending did not race higher—contrary to what you keep hearing from journalists and politicians. Spending rose by less than 3% in 2019, continuing a multiyear trend of slow growth. At some plan sponsors, total drug spending even declined. For specialty drugs, higher utilization—not drug costs—was again the biggest factor driving specialty spending growth.

Notably, clients of Prime Therapeutics fared worse than those of Express Scripts and CVS Caremark. Below, I explain three factors behind Prime’s underperformance. Its third place finish highlights why the PBM industry continues to consolidate.

Friday, June 12, 2020

The Ripple Effect of Medication Access Barriers—Disruption to Stakeholder Workflows, Damage to Brand Perception, and Detriment to Innovation

Today’s guest post comes from Julia Phillips, VP, Pharma Accounts & Enablement at CoverMyMeds.

Julia discusses how medication access challenges can negatively impact brand-name drugs.

For more, check out this overview of CoverMyMeds' technology solutions that enhance patients’ access: Enabling Medication Access Through Technology.

Read on for Julia’s insights.

Tuesday, June 09, 2020

New HRSA Data: 340B Program Reached $29.9 Billion in 2019; Now Over 8% of Drug Sales

The 340B Drug Pricing Program has logged another year of incredible growth.

According to data provided to Drug Channels by the Health Resources and Services Administration (HRSA), discounted 340B purchases were at least $29.9 billion in 2019. That figure is an astonishing 23% higher than its 2018 counterpart.

Since 2014, purchases under the 340B program have tripled. Over the same period, manufacturers’ net drug revenues have grown at an average rate that’s below 5%. Consequently, the 340B program has grown to account for more than 8% of the total U.S. drug market and about 16% of the total rebates and discounts that manufacturers provide.

What’s more, the 340B program is now almost as large as the Medicaid program’s outpatient drug sales. However, 340B lacks Medicaid’s regulatory infrastructure and controls. Medicaid rebates directly and transparently lower drug costs for the government, while 340B discounts disappear into providers’ financial statements. It’s troubling and hard to defend.

Read on for our latest details on the 340B program’s ongoing and startling growth.

Wednesday, June 03, 2020

Pharmacist Job Market in 2019: Salaries Grew, Retail-to-Hospital Employment Shift Accelerated

The Bureau of Labor Statistics (BLS) recently released its employment data for 2019. That means it’s time to update our annual Drug Channels analysis of pharmacist salaries and employment.

Average base salaries were about $125,000, though there was substantial variation across practice settings.

Total pharmacist employment grew in 2019. Consistent with our previous analyses, the share of pharmacists who work at hospitals reached a new high.

However, the number of pharmacists working in retail settings decreased. The challenges facing the retail pharmacy industry, which I discuss in this video, are now showing up in the employment data. It’s more bad news for the pharmacists who are working for the weakened.

Monday, June 01, 2020

Visit Asembia’s Specialty Pharmacy Summit Virtual Experience

Like many of you, I was disappointed that Asembia had to cancel its 2020 Specialty Pharmacy Summit.

As a small consolation, Asembia is providing a series of on-demand business sessions. You can view them for FREE if your registration to the 2020 Specialty Pharmacy Summit was transferred to the 2021 Summit. Everyone else will have to pay a small fee.

Click here to register for access to Asembia’s Specialty Pharmacy Summit Virtual Experience. (You must register and create a new account, even if you are eligible for free access.)

Virtual business sessions cover such topics as market trends, the specialty pipeline, accreditation, federal health policy, digital health, and more.

Two highlights:
  • The State of Specialty Pharmacy 2020: Market Data and Trends—Adam J. Fein, Drug Channels Institute (That’s me!)
  • US Specialty Pharmaceuticals Trends, Issues and Outlook—Doug Long, IQVIA
For the full Las Vegas experience, I suggest that you review this important story before viewing the business sessions.

In the meantime, mark your calendars for the 2021 Specialty Pharmacy Summit, which is scheduled for May 2 to 5, 2021.

Wednesday, May 27, 2020

Drug Channels News Roundup, May 2020: COVID-19 and Formularies, Retail-to-Mail Trends, ABC on Biosimilars, and Social Distancing the CVS Way

FWIW: Summer is finally here. Before you venture outside for your lockdown barbeque, check out these noteworthy items off the Drug Channels grill:
  • Payers predict how COVID-19 will affect formularies
  • Our analysis of the 2020 retail-to-mail shift
  • AmerisourceBergen profiles biosimilars
Plus, CVS pharmacy offers a clever way to measure appropriate social distancing.

P.S. Join the nearly 9,400 followers of my curated links to neat stuff at @DrugChannels on Twitter. My recent tweets have highlighted: hospital profits, drug spending, prior authorization at specialty pharmacies, legal issues for drug importation, private equity funding for a start-up PBM, physicians vs. PBMs, trends in Google Trends, and more. I continue to tweet under-the-radar stories about how the coronavirus is affecting drug channels and healthcare spending.

Friday, May 22, 2020

Electronic Prescription Management and Enrollment for Specialty Medications—Expanding Provider Adoption of Tech-Enabled Hub Services

Today’s guest post comes from Kyle Grimslid, Market Development Director at CoverMyMeds.

Kyle describes the complications that providers and patients encounter in the specialty prescription process. He describes how AMP: Access for more Patients™ enhances access, affordability and adherence—including a reported 27% reduction in time to therapy.

Click here to learn more about how CoverMyMeds and RxCrossroads by McKesson are using technology to solve patients' medication access challenges.

Read on for Kyle’s insights.

Thursday, May 21, 2020

Why Do CVS And Express Scripts Rely on Secretive Private Companies to Run Their Copay Maximizer Programs?

In Copay Maximizers Are Displacing Accumulators—But CMS Ignores How Payers Leverage Patient Support, I explained a new Centers for Medicare and Medicaid Services (CMS) final rule regarding health plans’ use of copay accumulator adjustment. I also highlighted why plans have responded to the negative patient impact from accumulators with copay maximizer programs.

However, maximizers are being implemented very differently from accumulators.

The two largest PBMs—CVS Health’s Caremark and Cigna’s Express Scripts—have each partnered with secretive and independent private companies to operate specialty drug maximizer programs for their plan sponsor clients. What’s more, at least one of these private companies earns fees equal to 25% of the manufacturer’s copay support program.

These arrangements are very odd. Why do multi-billion-dollar public companies rely on these private companies to administer their maximizer programs? Why do these small companies deserve such outrageous fees? Why are beneficiaries required to affirmatively sign up with the companies—or face ludicrous costs that far exceed their plan’s out-of-pocket maximums? Does any oversight exist for these arrangements?

Here’s what I managed to uncover about these businesses. See what you think.

Tuesday, May 19, 2020

Copay Maximizers Are Displacing Accumulators—But CMS Ignores How Payers Leverage Patient Support

COVID-19 has not stopped the wheels of policy bureaucracy from grinding. Last week, the Centers for Medicare and Medicaid Services (CMS) released its final Notice of Benefit and Payment Parameters for the 2021 benefit year. You’ll find the document links below.

This final rule permits insurers to exclude the value of a pharmaceutical manufacturer’s copay support program from a patient’s annual deductible and out-of-pocket maximum obligations.

Translation: CMS has confirmed that insurers have the option to use copay accumulator adjustment for their pharmacy benefit programs.

Patients on specialty drugs lose big from accumulators, while plans profit from the lower spending that results. Consequently, copay maximizers have emerged as a more patient-friendly alternative to accumulators. Below, I remind you of the math behind these alternatives.

Plan sponsors are publicly denouncing copay support programs—while they’re privately embracing them. CMS’s final rule ignores the troubling reality behind maximizers and accumulators: They encourage plans to use pharmacy benefit deductibles as a scheme that allows payers—not patients—to reap the greatest benefits from a manufacturer’s patient support program.

Thursday, May 14, 2020

The State of Specialty Pharmacy in 2020 (video)

I received good feedback on Tuesday's video about retail pharmacy.

So below, you'll find another brief video excerpt from my May 1 Industry Update and COVID-19 Impact video webinar.

In this clip, I highlight the growth and consolidation dynamics facing the specialty pharmacy industry. I also discuss the competitive challenges facing smaller pharmacies.

Never fear, Drug Channels traditionalists. I'll be back with a new article next week.