Tuesday, August 21, 2012

Drug Channels News Roundup: August 2012

Ah, the end of summer approaches. Almost time to pack up the barbeque and send the kids back to school. In the meantime, please enjoy this selection of news stories from the Drug Channels universe.

In this month’s edition:
  • The Heat is On: AmerisourceBergen discloses new subpoenas over gray market activity
  • The Heat is Off: Big defeat for a bona fide fee AMP whistleblower lawsuit
  • Just Hot Air? A semi-reasonable review of the presidential election’s competing Mediscare claims
Plus, The Onion visits a Walgreens pharmacy and is shocked (shocked, I tell you!) by the employees' attitudes.

Wholesaler Subpoenaed Over Controlled Drugs
In its August 9, 2012, 10-Q filing (for the quarter ending June 30), AmerisourceBergen (NYSE: ABC) disclosed subpoenas from the Drug Enforcement Administration and the United States Attorney’s Office in New Jersey. (See page 11 of the 10-Q filing). According to ABC’s filing: “In addition to requesting information on ABDC’s diversion control program generally, the subpoenas also request documents concerning specific customers’ purchases of controlled substances.” Hmmm. You may recall that ABC was identified by a Senate report as a supplier to pharmacies that were diverting product into the gray market. (See New Senate Report IDs Gray Market Players, Including Some Surprising Names.) On the bright side, this means that the government is flirting with due process instead of the DEA’s usual suspend-first/litigate-later tactics (per Cardinal Fights a Misdirected DEA).

Lack of Regulatory Guidance Fatal to Some, But Not All Claims in AMP False Claims Act Case
Don’t be deterred by the scary legal title. This article summarizes a big decision in a case with ramifications for all brand-name manufacturers with wholesaler fee-for-service agreements, a.k.a., distribution service agreements, distribution performance agreements. For a summary of the case, see Drugmakers Charged With Defrauding Medicaid. The whistleblower in the lawsuit was none other than Ron Streck, former executive director of the Healthcare Distribution Management Association. (Hope they give John Gray a better retirement package!) Ironically, a good chunk of the case was tossed because the Centers for Medicare and Medicaid Services (CMS) failed to provide clear guidance regarding “bona fide service fees” until January 2012, as I posit in New AMP Rule Targets Bona Fide Service Fees.

Beneath 'Mediscare' talk, who's right?
The Presidential campaign is in full swing, with a renewed focus on semi-wonky health care policy issues. But how should you sort out the many competing claims and counterclaims about “throwing grandma off the cliff”? This interesting Politico article argues that both sides are right—and wrong. Regardless of your political persuasion or preferences, this is a decently balanced article.

Argument Between Employees Shatters Illusion Of Professionalism Traditionally Associated With Walgreens
The Onion, America’s Finest News Source, is quickly becoming my go-to source for pharmacy news. Something tells me that the article's writer has met the surly staff in my local Walgreens pharmacy, at 1617 John F Kennedy Boulevard.


  1. Dave MarleyAugust 21, 2012

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  2. When Florida and the DEA shut down (basically) the pill mills (i.e. doctors dispensing with degrees from The American College in Cuba) what the hell did they think was going to happen ... that pill junkies would lose their appetite for destruction and the ease of obtaining narcotics from an old McDonald's drive-thru? Did they think these Drugstore Cowboys would sit back and reminisce on the "glory days" of "pills were everywhere man!!!" ... hell no, junkies then went to pharmacies for their fix with legitimate prescriptions from the foreign degreed doctor's that still never had their ability to prescribe stripped away from them by the DEA, allowing them to continue their near-criminal ability to prescribe Class 2's. The big 3, more like cardinal in this discussion, new damn well that 3 million (who knows, 7million?) junkies weren't going to lose their habit overnight. The Bigs got doctors and the secondary distributors out of the supply chain so THEY could bake that cake and eat it too. And look what happened, they put the cake in at 500 instead of 350 and completely screwed themselves due to an inexplicable need to appease shareholders. All publicly held wholesalers are in a terrible situation - but that's their problem. The amount of pharmacy robberies which have occurred in Florida due to the DEA's meddling in this should be shoved back on the DEA in a class-action suit. You can't cut off junkies cold turkey from their "dealer" and then think that you've won the war. They'll find another dealer. That's DEA 101 stuff. Those junkies will be back the very next day. And the next. And you get the point.

  3. BeenThere,SeenThatAugust 22, 2012

    "bona fide service fees"...never has a term been more oxymoronic. Everyone knows these get passed right along to the chains! I mean, geez, how stupid is the gov't...don't answer that. It would require a whole new level of math and well, that's just not worth the effort. The only "service" that is provided is that the wholesalers do something they'd do anyway. Ron Streck was right. Lobbyists are just too strong to beat.