Thursday, January 28, 2010

My Macroeconomic Outlook for 2010

And now for something completely different.

You can download my new free report called the 2010 Economic Outlook For Wholesale Distributors, courtesy of IBM. You will have register on the IBM site to download the report.

Fair warning: This report is not about the pharmaceutical industry or about drug wholesalers. In this report, I explain today's macroeconomic dynamics and provide forecasts for major distribution sectors. I also examine employment, channel inventory levels, consumer spending, and the outlook for markets such as construction and industrial manufacturing.

Allow me to explain...

Monday, January 25, 2010

Drug Wholesaler Earnings Preview: 2009Q4

This week, the big 3 drug wholesalers—AmerisourceBergen (NYSE:ABC), Cardinal Health (NYSE:CAH), and McKesson (NYSE:MCK)—will all report their financial results from the fourth calendar quarter of 2009. These financial reports and accompanying conference calls provide invaluable insights into the strategies and economics of companies within U.S. drug channels.

Below are my thoughts on general business issues that you should listen for in these reports. As a service to Drug Channels readers, I am also including links to the earnings conference call webcasts for each company. If you don’t have time to listen to the calls, free transcripts show up on Seeking Alpha within a few days.

Stay tuned in early February for my new report reviewing each company’s financial and business results for the quarter.

Thursday, January 21, 2010

Fixing AMP: A Post-Brown Analysis

AMPs on the ground
AMPs on the ground
Lookin’ like a fool with your AMPs on the ground…

Average Manufacturer Price (AMP) may not be on the ground yet, but it certainly won’t be on the floor of the House or Senate anytime soon. Senator-elect Scott Brown’s surprise win has cast serious doubt on the current health care reform effort.

So, what’s next? I think the pharmacy associations will keep on fighting because they have invested too much political capital on the AMP issue. So, an AMP fix will move forward somehow, with the pharmacy lobby successfully redefining AMP, increasing the mark-up, and perhaps also blocking publication of AMP data.

Nonetheless, marketplace changes and state Medicaid programs actions have made the fix much less important to the pharmacy industry than many people believe, as a just-released OIG study confirms. The latest evidence even suggests that AMP-based FULs are comparable to Part D MAC lists, suggesting overly generous Medicaid reimbursements remain. Facts sure are stubborn things, aren't they?

Tuesday, January 19, 2010

Health Reform & the PBM Industry

I am pleased to welcome our second sponsor—PCMA’s industry relations web briefing on “Health Reform & the PBM Industry.” This live, online event will be held on Thursday, February 11, 2010, at 2:00 PM EST.

The Pharmaceutical Care Management Association (PCMA) is the national association representing America’s pharmacy benefit managers (PBMs), so this event will be a good opportunity to get a timely update directly from the folks involved in Washington. I have speculated that healthcare reform will be generally positive for PBMs. See Healthcare Reform: Bullish for PBMs, but Not Pharmacies.

Friday, January 15, 2010

Drug Channels News Roundup: January 2010

Time once again for my semi-regular round up of intriguing and noteworthy news stories from the Drug Channels universe.

This edition features AmerisourceBergen’s expanded generic program, Walgreens latest battle with Washington state, good legal news for pharmacies, and advice for savvy prescription shoppers.


Thursday, January 14, 2010

Colbert Takes on Cephalon’s Nuvigil

In this brief video clip, Dr. Stephen T. Colbert discusses alternatives to Cephalon’s (NASDAQ: CEPH) Nuvigil, including potential competitor VaxaStare from Prescott Pharmaceuticals. Funny.

Prescott Pharmaceuticals stands by its Hippocratic Oath: First, do no harm. Second, get a good lawyer.

Tuesday, January 12, 2010

Drug Forecasts: Oops!...They Missed It Again

The boffins at the Centers for Medicare & Medicaid Services (CMS) just released their annual computations of National Health Expenditures (NHE), including the latest figures for prescription drugs.

Two notable highlights that I haven't seen mentioned elsewhere:
  • CMS’ projections for the growth of drug spending have been much, much higher than actual growth rates—even for forecasts made only two years ago. As someone who makes his living from the crystal ball, I understand that sometimes you need to eat broken glass. But the disparity is quite striking and so far unexplained by CMS.

  • The data confirm last year’s projection that Federal and state governments are becoming the primary payers of outpatient prescriptions. A major downside to this government takeover is the risk that budget pressures could encourage the government to dictate or mandate lower payment levels for pharmacies. Be careful what you wish for, health reform fans!

Friday, January 08, 2010

Buh-Bye, Byron!

Senator Byron Dorgan (D-ND) just announced that he will not seek re-election. Read his official statement. Today's Wall Street Journal reports Health-Care Views Hurt Dorgan's Bid. I guess the drug importation thing wasn't so good for your political career after all.

Good luck in retirement, Byron! Our country will be safer without your fanatical pursuit of dangerous legislation.

I presume that Dorgan’s retirement will lower the threat of importation legislation—at least until another zealot takes up the cause. Ominously, the White House recently signaled continuing support for importation, but I think it’s a bluff (for now).

Thursday, January 07, 2010

Strategic Questions for 2K10 (Part 2 of 2)

Here is the second of two posts outlining major topics that I'll be watching in 2010, framed as strategic questions with links to relevant background posts. Please feel free to add your own strategic questions in the comments.

Strategic Questions for 2K10 (Part 1 of 2) appeared on Tuesday.

I'll be returning to regularly scheduled blogging tomorrow.

Wednesday, January 06, 2010

Government Programs Summit

I am pleased to welcome our first sponsor—IIR’s Third Annual Government Programs Summit. This event will be held in Baltimore on February 8-10, 2010.

The event will be moderated by Chris Cobourn, Vice President of Regulatory Compliance at CIS and a friend of Drug Channels. CIS’ Pharma Compliance Blog is included in our blog roll.

Drug Channels readers understand the importance of government programs and pricing issues, so I encourage you to check out this event. Below are some details courtesy of IIR. Click here to see the agenda and list of speakers, which includes many folks from agencies such as the Center for Medicare & Medicaid Services (CMS) and Department of Veterans Affairs.

Tuesday, January 05, 2010

Strategic Questions for 2K10 (Part 1 of 2)

Happy New Year!

Welcome back to another year of irreverent, humorous, and potentially insightful viewpoints from Adam J. Fein, your friendly neighborhood blogger. My 2010 looks busy already but I plan to continue sharing my $0.02 with you on Drug Channels.

Here is the first of two posts outlining major topics that I'll be watching in 2010, framed as strategic questions with links to relevant background posts. Please add your own strategic questions in the comments.

Part 2 will appear on Thursday.