Thursday, April 29, 2010

Drug Channels News Roundup: April 2010

Time for my monthly review of noteworthy news stories from the Drug Channels universe.

In this edition, we look at reports of a PBM price war started by CVS Caremark (NYSE:CVS), the big hit to Eli Lilly (NYSE:LLY) from Medicaid drug rebates, and why RFID is dead. Plus, I give you some insights into Philly sports fans.


CVS Heats Up Pharmacy Benefit Competition for Medco
Yesterday, executives from Medco Health Solutions (NYSE:MHS) spooked investors by alluding to “aggressive pricing” in the market. This article summarizes the story, although I recommend reading the full transcript at Seeking Alpha. (Search for "pricing" to find the comments.) It should be no surprise that CVS Caremark is competing hard to “prove” the synergies between its PBM and pharmacy businesses. See Maintenance Choice Update: CVS Gain, Caremark Same for my most recent comments on the combination.

Lilly's $1 Billion Investment in Health Care Reform: It's All About Zyprexa
Last week, Eli Lilly (NYSE:LLY) announced that health care reform will reduce its 2010 revenue by $350 million to $400 million, and 2011 revenue by $600 million to $700 million. This thought-provoking article from IN VIVO argues that this $1 billion hit is a “price paid up-front in order to see the new business from insurance expansion later on.” The article also has an interesting discussion of Medicaid rebate dynamics, which is the topic of the Medicaid Drug Rebate Program Summit (a Drug Channels sponsor).

RFID is DEAD…at Unit-Level in Pharma
Dirk Rodgers nails the future of RFID, predicting that the supply chain will end up seeing a mix of RFID and barcodes. His argument builds on a very thoughtful discussion of the costs and benefits to manufacturers, wholesalers, and pharmacies. You can find some historical perspective (and my early embrace of Dirk's POV) in More RFID Un-Hype, a May 2007 Drug Channels post in which I wrote about the "fervent hopes and occasional misrepresentations of RFID technology vendors."

I'd Like To Thank The Ungrateful, Over-Expecting,Oftentimes-Racist Fans Of Philadelphia
Drug Channels’ worldwide headquarters is located in downtown Philadelphia. Check out this wrap-up of Eagles QB Donovan McNabb’s final press conference before heading to the Washington Redskins. Hooray for Philly fans!

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