Wednesday, March 21, 2012

Drug Channels News Roundup: March 2012

Yesterday was the first day of spring! I can think of no better way to celebrate than with my latest monthly look at noteworthy news stories from the Drug Channels multiverse.

In this issue:
  • A Walgreen-Rite Aid Merger? Really?!?
  • A New Startup Aims for Prescription Price Transparency
  • Hospitals Get Into the Specialty Pharmacy Game
Plus, The Onion delves into the FDA’s decision to allow importation of Doxil and methotrexate.

Banking on a Walgreen-Rite Aid Merger
In last week’s Rite Aid: Smart or Lucky?, I jokingly wrote: “Rite-Aid’s $6+ billion debt load remains a big deterrent to any potential acquirer … unless Walgreen (NYSE: WAG) gets very, very desperate.” Coincidentally, Credit Suisse’s Edward Kelly released a report the very next day suggesting that Walgreen’s “may” seek to merge with Rite Aid, leading to a 10% pop in Rite Aid’s stock price. LOL! Former Walgreen CEO Jeff Rein, who mysteriously left Walgreen in 2008, believes that “Walgreens’ board ‘would have the stomach’ to buy Rite Aid if it doesn't reach an agreement with Express Scripts” (per Drug Store News). Hmmm...

Unraveling the Mystery of Prescription Drug Prices
This article has an impressively lucid explanation of how consumers (and payers?) can take advantage of today's pharmacy channel economics. It was written by the president of GoodRx, a start-up with a pretty nifty prescription drug price comparison tool at (Try it!) The company, which has early Facebook employees and ex-McKesson executive Stephen Buck as co-founders, recently raised $1M in seed funding from some big-time Silicon Valley venture capitalists. Keep on eye on these guys.

Embracing Rather Than Fighting Specialty Pharmacy
In the 2011-12 Economic Report on Retail and Specialty Pharmacies, I forecast a boom in specialty dispensing, as the projected specialty growth encourages market entry. This article provides further proof in the form of three hospitals with specialty pharmacy operations—The University of Illinois Hospital and Health Sciences System, Chicago; Fairview Pharmacy Services, Minneapolis; and Duke University Hospital, Durham, N.C. The hospitals’ strategy can also be seen as a proactive response to specialty pharmacy’s challenge to buy-and-bill.  Manufacturers: Get ready for pressure to broaden your networks!

FDA Allows Import Of Cancer Drugs
The Onion, America’s Finest News Source, examines the FDA’s decision to allow imports of Doxil and methotrexate to be imported from India and Australia. Click to enlarge if you can't read these enlightening comments from a cross-section of our fellow citizens.


  1. OK, Adam, I tried the Goodrx site. It is nothing more than a list price search mechanism with some coupon links. What's the big deal?

  2. True, the site is most useful for cash-pay prescriptions and people with co-insurance. It certainly works better than the state-run sites that I have highlighted over the years. Looking ahead, I could see the site accelerating the generic pharmacy price war and perhaps playing a role in "OTC plus" drugs.

  3. Dave MarleyMarch 22, 2012

    As for the GoodRx, these people contacted us at PUTT, and my obvious concern was that it did not have independent pharmacy prices. They claimed they did not have access to that data, I told them they they need to try harder.

    As you and I have discussed before, my observation is that the chains  (including those with $4 programs) and even some indys spread price generics to the consumer in the same way that PBMs spread price generics to the self insured. Neither the consumer, or most self insured employers have any true awareness of what most drug's actual acquisition cost is (both at retail AND mail), and so they blindly pay what the PBMs (via AWP and MAC games) and the chains charge.

    As for GoodRx, by not having indy prices (which are often MUCH lower than the chains), the site ain't worth squat!

  4. Dave MarleyMarch 22, 2012

    I just tested the site for my store, what a bunch of crap! These folks are just another discount card pumper. They list a price (with a "print coupon" tab) that is higher than my regular price. Just another PBM administered discount card with fees that only serve to make the card discount card company rich while raising costs for consumers.Dude, you've been hoodwinked!

  5. Settle down, Dave. I'm not endorsing them. I'm only pointing readers to an interesting article and highlighting a service with potential beyond the state-run sites.

    And let's be honest. Pharmacy owners don't want consumers to compare prices. 

    For example, The Prescription Drug Prices in New York State website allows consumers to compare the retail price of the 150 most frequently prescribed drugs at different pharmacies throughout New York. Price is measured as the "usual and customary" (U&C) price reported to Medicaid by a pharmacy. In theory, this site could help uninsured or underinsured consumers shop around for lower prices.

    Guess what? Retail pharmacies don’t take the price reporting law very seriously. According to NYPIRG's A Bitter Pill, the average pharmacy reported data for only 39 out of 65 brand name drugs in the study. Among a sample of 246 pharmacies, 82% (210 out of 246) failed to display the drug price website address, as required by law.

    Let's see if GoodRx can do better than the government. 


  6. Dave MarleyMarch 22, 2012

    You know my thoughts on comparing prices, I have spent thousands of dollars promoting my prices against the chains mail order. When you have great prices, you have nothing to hide.

    As for GoodRX, it is obvious they are more about what's good them. If transparency is the name of the game, they should disclose how much of a fee GoodRx makes from the PBM MedImpact each time one of their "coupons" is redeemed at the pharmacy.......and their website is pathetically boring.

  7. Hi Dave,

    My name is Lalit Dhadphale, CEO of  We show up prominently in's search results.  The reason we do, is that our prices are transparent on our website for everyone to see.  In addition, we update our pricing with Goodrx so consumers can see our latest price.  We have nothing to hide because we are giving consumers a fair price for their medications.

    As Adam says below, "pharmacy owners do not want consumers to compare prices".  If you are willing to feed your pricing data to, I am sure that they would be happy to post your prices.  They are very open to working with all pharmacies.

    None of the retail chains post their prices on their website, because the price varies from location to location.  In addition, they would like you to walk into their retail pharmacy to purchase bottled water and candy bars while you wait to have your prescriptions filled.

    I think the US consumer is fed up with this so I am happy that sites such as Goodrx are exposing consumers to licensed, legitimate US sources who can save them money.