Many people ask me about the readership of Drug Channels. This post shares new details about the companies visiting Drug Channels along with traffic statistics since March 2007.
I am also announcing the availability of two sponsorship opportunities for companies interested in connecting with the Drug Channels community. The number of sponsors will be limited to two companies at any one time and will be allocated on a first-come, first-served basis. I include some high-level details below, but drop me a line to discuss the opportunity.
Regular readers shouldn’t fret—I won’t compromise the content for sponsorship.
Comparing list prices for a single product category to a computed, non-list price index for a broad basket of goods (CPI-U) is mathematically illogical. After all, the CPI-U for prescription drugs increased at a rate less than half the rate of list prices. But we all know appropriate comparisons don't get you on the front page of the New York Times.
Anyway, let’s assume the AARP computations are mathematically accurate and consider the following Drug Channels-related question:
Have pharmacy profits from brand drug prescriptions gone up, gone down, or stayed the same as average list prices have increased?
Have you been wondering what’s going on with our old friend Average Manufacturer Price (AMP)?
Never fear, Drug Channels is here!
I recently came across a useful summary from the law firm of Reed Smith in Health Reform Update: Focus on Prescription Drug Price Regulation. See the second page of their briefing for an overview of how AMP would be handled under the House or Senate healthcare bills.
To understand the business implications of AMP, I humbly suggest that you read the sections titled “Risks to the Superior Profitability of Generic Drugs” and “Replacing the Average Wholesale Price Benchmark” in my U.S. Pharmacy Industry: Economic Report and Outlook.
Express Scripts (NASDAQ: ESRX) is featured in an unusual press release from Chinese company SeaRainbow Holding Corp., Ltd. (SZSE: 000503) announcing Express Script's entry into the fast-growing China market. See Express Scripts, SeaRainbow to Pioneer PBM Business in China.
There will be plenty of growth for Pharmacy Benefit managers (PBMs) in the good ol’ US of A, especially given current health reform proposals and prospects for PBM consolidation. But the global opportunity is even bigger because those markets are much less sophisticated in the management of pharmacy benefits, especially when it comes to generic dispensing rates. Injecting PBMs into the evolution of emerging markets will accelerate convergence with more established markets.
I’m not so sure that manufacturers of brand pharmaceuticals will be cheering the creation of a global PBM industry, although it could be a big positive for generic drug makers.
The seasonal flu vaccine is in short supply, but licensed pharmacists and medical professionals can purchase it on a so-called "gray market" — for as much as eight times the manufacturers' original price.
Unfortunately, the illegitimate secondary market will exist as long as there are willing buyers for products with questionable heritage.
Judging by the financials, it sure looks like CVS Caremark has sacrificed its PBM business for the benefit of the retail pharmacy business. They are also having trouble explaining how a PBM customer gains when a brick-and-mortar pharmacy is paired with a benefit management business.
Adding insult to injury, CVS Caremark also disclosed that the Federal Trade Commission (FTC) has opened a formal inquiry into its business. Ouch.
Pembroke Consulting retainer clients and Gerson Lehrman Group customers should feel free to schedule phone calls with me for additional comments beyond what's in this post.
As a follow-up to Tuesday's post, management guru Scott Adams shows how promotion by a pharmaceutical manufacturer affects physicians' prescribing decisions.
The paper poses an interesting question and contains some neat data on post-generic market evolution—brand market share, prices, promotional expenses. I’m a bit underwhelmed by the author’s conclusions. So, I suggest that you enjoy the pretty pictures and perhaps incorporate the conceptual ideas into your forecasting models.